866                               LAWS OF MARYLAND                        [CH. 538

dorsement or words of guaranty or warranty in the transfer or pre-
sentment and a collecting bank remains liable for their breach despite
remittance to its transferor. Damages for breach of such warranties
or engagement to honor shall not exceed the consideration received
by the customer or collecting bank responsible plus finance charges
and expenses related to the item, if any.

(4) Unless a claim for breach of warranty under this section is
made within a reasonable time after the person claiming learns of
the breach, the person liable is discharged to the extent of any loss
caused by the delay in making claim.

4—208. Security Interest of Collecting Bank in Items, Accompany-
ing Documents and Proceeds.

(1)  A bank has a security interest in an item and any accompany-
ing documents or the proceeds of either

(a)  in case of an item deposited in an account to the extent to
which credit given for the item has been withdrawn or applied;

(b)  in case of an item for which it has given credit available for
withdrawal as of right, to the extent of the credit given whether or
not the credit is drawn upon and whether or not there is a right
of charge-back; or

(c)  if it makes an advance on or against the item.

(2)   When credit which has been given for several items received
at one time or pursuant to a single agreement is withdraw or applied
in part the security interest remains upon all the items, any accom-
panying documents or the proceeds of either. For the purpose of
this section, credits first given are first withdrawn.

(3)  Receipt by a collecting bank of a final settlement for an item
is a realization on its security interest in the item, accompanying
documents and proceeds. To the extent and so long as the bank does
not receive final settlement for the item or give up possession of the
item or accompanying documents for purposes other than collection,
the security interest continues and is subject to the provisions of
Sub-title 9 except that

(a)  no security agreement is necessary to make the security in-
terest enforceable (sub-section (1) (b) of Section 9—203); and

(b)  no filing is required to perfect the security interest; and

(c)  the security interest has priority over conflicting perfected
security interests in the item, accompanying documents or proceeds.

4—209. When Bank Gives Value for Purposes of Holder in Due
Course.

For purposes of determining its status as a holder in due course,
the bank has given value to the extent that it has a security interest
in an item provided that the bank otherwise complies with the re-
quirements of Section 3—302 on what constitutes a holder in due
course.

4—210. Presentment by Notice of Item Not Payable by, Through
or at a Bank; Liability of Secondary Parties.