Tex. Bus. & Com. Code § 3.420 · Subchapter D. LIABILITY OF PARTIES
CONVERSION OF INSTRUMENT.
Text — Current through the 89th 2nd Called Legislative Session, 2025
(a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment. An action for conversion of an instrument may not be brought by:
(1) the issuer or acceptor of the instrument; or
(2) a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or a co-payee.
(b) In an action under Subsection (a), the measure of liability is presumed to be the amount payable on the instrument, but recovery may not exceed the amount of the plaintiff's interest in the instrument.
(c) A representative, other than a depositary bank, who has in good faith dealt with an instrument or its proceeds on behalf of one who was not the person entitled to enforce the instrument is not liable in conversion to that person beyond the amount of any proceeds that it has not paid out.
Notes and commentary — not statutory text
History
Added by Acts 1995, 74th Leg., ch. 921, Sec. 1, eff. Jan. 1, 1996.
Source of truth
- Edition
- Current through the 89th 2nd Called Legislative Session, 2025
- Official file
- https://statutes.capitol.texas.gov/Docs/BC/htm/BC.3.htm
- Text hash
- sha256 4f6854d7df97fa212b412df6bedc18c9baf05a0d33d687e0edd259828206acf8
- Composed by
- compose_tx.py 2026-10-05: the Legislative Council's chapter files read in document order; verify_tx.py's independent reading (lxml DOM walk) agrees character for character
Cited by 1 provision
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Business & Commerce Code
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