1. If an item is presented to and received by a payor bank, the bank is accountable for the amount of: a. A demand item, other than a documentary draft, whether properly payable or not if the bank, in any case in which it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, regardless of whether it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline. b. Any other properly payable item, unless within the time allowed for acceptance or payment of that item the bank either accepts or pays the item or returns it and accompanying documents. 2. The liability of a payor bank to pay an item under subsection 1 is subject to defenses based on breach of a presentment warranty (section 41-04-20) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
41-04-31. (4-303) When items subject to notice, stop order, legal process, or setoff - Order in which items may be charged or certified. 1. Any knowledge, notice, or stop order received by, legal process served upon, or setoff exercised by a payor bank comes too late to terminate, suspend, or modify the bank's right or duty to pay an item or to charge its customer's account for the item if the knowledge, notice, stop order, or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the earliest of the following:
a. The bank accepts or certifies the item. b. The bank pays the item in cash. c. The bank settles for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement. d. The bank becomes accountable for the amount of the item under section 41-04-30 dealing with the payor bank's responsibility for late return of items. e. With respect to checks, a cutoff hour no earlier than one hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check. 2. Subject to subsection 1, items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.