TITLE 11 COMMERCIAL CODE

Section 3. Negotiable Instruments, 11-3-101 through 11-3-605.

ARTICLE 3 NEGOTIABLE INSTRUMENTS

11-3-103. Definitions.

(Code 1981, §11-3-103, enacted by Ga. L. 1996, p. 1306, § 3; Ga. L. 2015, p. 996, § 3B-11/SB 65.)

The 2015 amendment, effective January 1, 2016, substituted "Reserved" for " 'Good faith' means honesty in fact and the observance of reasonable commercial standards of fair dealing" in paragraph (a)(4); and substituted "within the meaning of Code Section 11-1-201(b)(8)" for "as 'burden of establishing' is defined in subsection (8) of Code Section 11-1-201" in paragraph (a)(10).

Editor's notes.

- Ga. L. 2015, p. 996, § 1-1/SB 65, not codified by the General Assembly, provides: "(a) This Act shall be known and may be cited as the 'Debtor-Creditor Uniform Law Modernization Act of 2015.'

"(b) To promote consistency among the states, it is the intent of the General Assembly to modernize certain existing uniform laws promulgated by the Uniform Law Commission affecting debtor and creditor rights, responsibilities, and relationships and other federally recognized laws affecting such rights, responsibilities, and relationships."

Law reviews.

- For annual survey of law of business associations, see 56 Mercer L. Rev. 77 (2004).

JUDICIAL DECISIONS

The collecting bank is merely an agent of the drawer of a draft. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983) (decided under former Code Section11-3-120).

The 1996 amendments of the UCC definitions of "good faith" and "holder in due course" (O.C.G.A. §§ 11-3-102 and11-3-103) did not apply retroactively to transactions before their effective date; rather, the definitions in O.C.G.A. §§ 11-2-201 and11-3-302 (former version) applied. Choo Choo Tire Serv., Inc v. Union Planters Nat'l Bank, 231 Ga. App. 346, 498 S.E.2d 799 (1998).

Bank as holder in due course.

- Where a fact question remained as to whether a bank accused of negligently accepting stolen checks for deposit and conversion acted in good faith in receiving forged checks, it could not achieve status as a holder in due course. Gerber & Gerber, P.C. v. Regions Bank, 266 Ga. App. 8, 596 S.E.2d 174 (2004).

Good faith.

- On plaintiff commercial checking account customer's suit against defendant, its employee embezzler's depository bank, alleging the embezzler deposited checks made payable to the embezzler into the embezzler's personal account, because those checks contained no indications of forgery, and because the evidence indicated, at most, that the depository bank may have been negligent due to the fact that the bank's screening system failed to detect the forgery scheme, but it did not indicate that the bank acted in an unfair or dishonest manner, and nothing showed that the bank's failure to investigate the embezzler's account activity was dishonest or unfair, and thus was not honest in fact or did not conform to reasonable commercial standards of fair dealing in accepting the checks, the checking account customer could not prevail in showing a lack of good faith under O.C.G.A. §§ 11-3-103(a)(4) and11-3-302(a)(2)(ii). Ownbey Enters. v. Wachovia Bank, N.A., 457 F. Supp. 2d 1341 (N.D. Ga. 2006).

Cited in Stebbins v. Ga. Power Co., 252 Ga. App. 261, 555 S.E.2d 906 (2001); Consumer Solutions Fin. Servs. v. Heritage Bank, 300 Ga. App. 272, 684 S.E.2d 682 (2009); Burrowes v. Bank of Am., N.A., 340 Ga. App. 248, 797 S.E.2d 493 (2017).

RESEARCH REFERENCES

Am. Jur. 2d.

- 11 Am. Jur. 2d, Bills and Notes, §§ 13, 71, 90, 185. 12 Am. Jur 2d, Bills and Notes, §§ 451, 460.

C.J.S.

- 82 C.J.S., Statutes, § 309.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 3-103.

ALR.

- Writing on the margin or on the back of a bill or a note at the time of its execution as a part thereof, 13 A.L.R. 251; 155 A.L.R. 218.

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