At issue in this sequel to State of Qatar v. First American Bank of Virginia (‘‘Qatar I’’) is the meaning and legal significance of the phrase ‘‘for deposit only’’ following an indorsement on the back of a check. More specifically, the question presented is whether a depository bank complies with the restrictive indorsement ‘‘for deposit only’’ when it deposits a check bearing that restriction into any person’s account, or whether that restriction requires a depository bank to deposit the check’s proceeds only into the account of the named payee. For the reasons that follow, the court holds that the unqualified language ‘‘for deposit only’’ following an indorsement on the back of a check requires a depository bank to place the check’s proceeds into the payee’s account, and the bank violates that restrictive indorsement when it credits the check to any other account.

  I
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   Plaintiffs are the State of Qatar and certain of its agencies (collectively, ‘‘Qatar’’). From approximately 1986 to 1992, one of Qatar’s employees, Bassam Salous, defrauded his employer by having checks drawn on Qatar’s account in purported payment of false or duplicated invoices that he had created. Although all of the unauthorized checks were made payable to individuals and entities other than Salous, he nonetheless successfully deposited the checks into his own personal accounts with Defendant First American Bank of Virginia (‘‘First American’’) and Central Fidelity Banks, Inc.(collectively, ‘‘the depository banks’’).

   After Qatar discovered this fraudulent scheme in 1992, it brought suit against the depository banks for conversion. * * *

   Only one category of checks remains in dispute. These checks all bear the forged indorsement of the payee named on the face of the check, followed by a stamped ‘‘for deposit only’’ restriction.

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 II 

   It is now established that First American may be liable to Qatar for handling a check’s proceeds in violation of restrictive indorsement. [Citation.] Under §3–205(c) of the pre-1993 Uniform Commercial Code (‘‘UCC’’ or ‘‘Code’’) [Virginia adopted Revised Article 3 in 1993] restrictive indorsements are defined to ‘‘include the words ‘for collection,’ ‘for deposit,’ ‘pay any bank,’ or like terms signifying a purpose of deposit or collection.’’ Thus, the UCC makes clear that the phrase ‘‘for deposit only’’ is, in fact, a restrictive indorsement. But the Code does not define ‘‘for deposit only’’ or specify what bank conduct would be inconsistent with that restriction. Nor does Virginia decisional law provide any guidance on this issue. As a result, reference to decisional law from other jurisdictions is appropriate.

   Not surprisingly, most courts confronted with this issue have held that the restriction ‘‘for deposit only,’’ without additional specification or directive, instructs depository banks to deposit the funds only into the payee’s account. In addition, commentators on commercial law uniformly agree that the function of such a restriction is to ensure that the checks’ proceeds be deposited into the payee’s account.

   This construction of ‘‘for deposit only’’ is commercially sensible and is adopted here. The clear purpose of the restriction is to avoid the hazards of indorsing a check in blank. Pursuant to former §3–204(2), a check indorsed in blank ‘‘becomes payable to bearer.’’ It is, essentially, cash. Thus, a payee who indorses her check in blank runs the risk of having the check stolen and freely negotiated before the check reaches its intended destination. To protect against this vulnerability, the payee can add the restriction ‘‘for deposit only’’ to the indorsement, and the depository bank is required to handle the check in a manner consistent with that restriction. §3–206(3). And in so adding the restriction, the payee’s intent plainly is to direct that the funds be deposited into her own account, not simply that the funds be deposited into some account. [Citation.] Any other construction of the phrase ‘‘for deposit only’’ is illogical and without commercial justification or utility. Indeed, it is virtually impossible to imagine a scenario in which a payee cared that her check be deposited, but was indifferent with respect to the particular account to which the funds would be credited.

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   Finally, it is worth noting that the new revisions to the negotiable instruments provisions of the UCC, [Revised Article 3], support the result reached here. Although these revisions are inapplicable to this case, the commentary following §3–206 states that the new subdivision dealing with ‘‘for deposit only’’ and like restrictions ‘‘continues previous law.’’ §3–206 comment 3. Shortly thereafter, the commentary provides an example in which a check bears the words ‘‘for deposit only’’ above the indorsement. In those circumstances, the commentary states, the depository bank acts inconsistently with the restrictive indorsement where it deposits the check into an account other than that of the payee. Although the restriction in that example precedes the signature, whereas the restrictions on the checks at issue here follow the signature, this distinction is immaterial. The clear meaning of the restriction in both circumstances is that the funds should be placed into the payee’s account.

   Therefore, First American violated the restrictive indorsements in depositing into Bassam Salous’ account checks made payable to others and restrictively indorsed ‘‘for deposit only.’’ Pursuant to the holding in Qatar I, then, First American is liable to Qatar for conversion in the amount of the total face values of these checks.