11-3-602. Payment.

Subject to subsection (b) of this Code section, an instrument is paid to the extent payment is made (i) by or on behalf of a party obliged to pay the instrument; and (ii) to a person entitled to enforce the instrument. To the extent of the payment, the obligation of the party obliged to pay the instrument is discharged even though payment is made with knowledge of a claim to the instrument under Code Section 11-3-306 by another person.#

The obligation of a party to pay the instrument is not discharged under subsection (a) of this Code section if:#

1. (1)

   A claim to the instrument under Code Section 11-3-306 is enforceable against the party receiving payment, and either:#

   1. (i)

      Payment is made with knowledge by the payor that payment is prohibited by injunction or similar process of a court of competent jurisdiction; or#

   2. (ii)

      In the case of an instrument other than a cashier’s check, teller’s check, or certified check, the party making payment accepted, from the person having a claim to the instrument, indemnity against loss resulting from refusal to pay the person entitled to enforce the instrument; or#

2. (2)

   The person making payment knows that the instrument is a stolen instrument and pays a person the payor knows is in wrongful possession of the instrument.#

Notwithstanding any other provision of this article, with respect to a note which is a negotiable instrument within the meaning of this article and which is to be paid off in installment payments or in more than one payment, the maker or drawer is authorized to pay the assignor until the assignee or its authorized agent sends a registered or certified letter to the maker or drawer at the maker’s or drawer’s last known address notifying the maker or drawer that the amount due or to become due has been assigned and that payment is to be made to the assignee. A notification that does not reasonably identify the rights assigned is ineffective. If requested by the drawer or maker, the assignee must furnish reasonable proof that the assignment has been made and, unless the assignee does so, the maker or drawer may pay the assignor.#