Editor's notes.

- In light of the similarity of the issues dealt with under the provisions, decisions under former Code 1933, § 14-502 are included in the annotations for this section.

Where bank credits deposit and allows withdrawals, it is holder in due course.

- Where check is deposited and credited to depositor's account and depositor is allowed to draw against it, the bank is presumed to be holder in due course in spite of express conditions in deposit contract making bank a mere agent for collection, where there are other facts, namely, that draft was endorsed in blank and bank thereafter paid checks drawn by endorser against such deposit, making bank at least a pledgee, if not absolute owner of the draft, and placing it on same footing as a purchaser. Southern Fruit Distribs., Inc. v. Citizens' Bank, 44 Ga. App. 832, 163 S.E. 261 (1932) (decided under former Code 1933, § 14-502); Pike v. First Nat'l Bank, 99 Ga. App. 598, 109 S.E.2d 620 (1959) (decided under former Code 1933, § 14-502).

No matter what the deposit agreement was initially, when bank did in fact credit deposit to its customer, and thereafter permitted customer to withdraw fund before collection, the bank became a holder for value of the check as to amount withdrawn, so as to be able to enforce payment against drawer thereof. Pike v. First Nat'l Bank, 99 Ga. App. 598, 109 S.E.2d 620 (1959) (decided under former Code 1933, § 14-502).

Instrument lacking joint payee's endorsement.

- A bank never became a holder in due course where a check made payable jointly to the bank's customer and a third party was never endorsed by the third party before deposit in the bank. Citizens & S. Nat'l Bank v. Sun Belt Elec. Constructors, Inc., 64 Bankr. 377 (Bankr. N.D. Ga. 1986).

Effect of collection agreement.

- Collection agreement is simply a device for bank and depositor to determine respective rights between themselves, not such a contract as will conclusively and in all events determine status of paper so far as third parties are concerned. Pike v. First Nat'l Bank, 99 Ga. App. 598, 109 S.E.2d 620 (1959) (decided under former Code 1933, § 14-502).

While deposit to credit of depositor under collection agreement gives rise to presumption of agency relationship rather than debtor-creditor relationship, and while, between parties themselves, the bank may always charge back uncollected check against its depositor whether it has advanced funds thereon or not, nevertheless, the presumption of agency relationship, so far as third parties are concerned, holds only so long as no contrary agreement between bank and depositor is shown. Proof that bank did in fact not only credit fund to depositor but allowed depositor to draw against that credit is, according to better rule, conclusive evidence of a contrary agreement. Pike v. First Nat'l Bank, 99 Ga. App. 598, 109 S.E.2d 620 (1959) (decided under former Code 1933, § 14-502).

Cited in Pazol v. Citizens Nat'l Bank, 110 Ga. App. 319, 138 S.E.2d 442 (1964).

Am. Jur. 2d.

- 11 Am. Jur. 2d, Bills and Notes, § 208. 15A Am. Jur. 2d, Commercial Code, § 8.

C.J.S.

- 9 C.J.S., Banks and Banking, § 383 et seq. 10 C.J.S., Bills and Notes, §§ 185, 186.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 4-211.

ALR.

- Character as holder in due course of bank which takes over assets and assumes liabilities of another bank, 76 A.L.R. 1329.