404.205 Depositary bank holder of unendorsed item. If a customer delivers an item to a depositary bank for collection, all of the following apply:
(1) The depositary bank becomes a holder of the item at the time that it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer endorses the item, and, if the bank satisfies the other requirements of s. 403.302, it is a holder in due course.
(2) The depositary bank warrants to collecting banks, the payer bank or other payer and the drawer that the amount of the item was paid to the customer or deposited to the customer’s account.
History: 1995 a. 449.
The general rule is that accepting a check when the payee’s endorsement is missing is not in accordance with the reasonable commercial standards of banking and the acceptance by a depositary bank of such a check for deposit is commercially unreasonable as a matter of law. This section excepts from the general rule depositary banks that receive unendorsed checks from customers when the missing endorsement is that of the customer. Schmitz v. Firstar Bank Milwaukee, 2003 WI 83, 262 Wis. 2d 672, 664 N.W.2d 594, 01-2139.