864                                   LAWS OF MARYLAND

(3) Subject to sub-section (1) (a), a bank is not liable for the
insolvency, neglect, misconduct, mistake or default of another bank
or person or for loss or destruction of an item in transit or in the
possession of others.

4—203. Effect of Instructions.

Subject to the provisions of Sub-title 3 concerning conversion of
instruments (Section 3—419) and the provisions of both Sub-title
3 and this Sub-title concerning restrictive indorsements only a col-
lecting bank's transferor can give instructions which affect the bank
or constitute notice to it and a collecting bank is not liable to prior
parties for any action taken pursuant to such instructions or in
accordance with any agreement with its transferor.

4—204. Methods of Sending and Presenting; Sending Direct to
Payor Bank.

(1)  A collecting bank must send items by reasonably prompt
method taking into consideration any relevant instructions, the na-
ture of the item, the number of such items on hand, and the cost of
collection involved and the method generally used by it or others to
present such items.

(2)  A collecting bank may send

(a)  any item direct to the payor bank;

(b)  any item to any non-bank payor if authorized by its trans-
feror; and

(c)  any item other than documentary drafts to any non-bank
payor, if authorized by Federal Reserve regulation or operating let-
ter, clearing house rule or the like.

(3)  Presentment may be made by a presenting bank at a place
where the payor bank has requested that presentment be made.

4—205. Supplying Missing Indorsement; No Notice From Prior
Indorsement.

(1)  A depositary bank which has taken an item for collection may
supply any indorsement of the customer which is necessary to title
unless the item contains the words "payee's indorsement required"
or the like. In the absence of such a requirement a statement placed
on the item by the depositary bank to the effect that the item was
deposited by a customer or credited to his account is effective as the
the customer's indorsement.

(2)  An intermediary bank, or payor bank which is not a deposi-
tary bank, is neither given notice nor otherwise affected by a restric-
tive indorsement of any person except the bank's immediate trans-
feror.

4—206. Transfer Between Banks.

Any agreed method which identifies the transferor bank is suffi-
cient for the item's further transfer to another bank.

4—207. Warranties of Customer and Collecting Bank on Transfer
or Presentment of Items; Time for Claims.