Failure to meet midnight deadline.

- Under O.C.G.A. § 11-4-302, when payor bank retains item past midnight deadline without completely settling for it, it becomes accountable for amount of the retained check. Georgia R.R. Bank & Trust Co. v. First Nat'l Bank & Trust Co., 139 Ga. App. 683, 229 S.E.2d 482 (1976), aff'd, 238 Ga. 693, 235 S.E.2d 1 (1977).

Pursuant to O.C.G.A. § 11-4-302(a), a payor bank may be liable if it fails to pay, return or give notice of the dishonor of a demand item, other than a documentary draft, by "its midnight deadline." Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

Where there is no valid defense alleged, defendant payor bank is liable to plaintiff holder for amount of checks received by defendant by reason of its retention of said items beyond deadline in O.C.G.A. § 11-4-302 without having either settled for or paid them, or, in the alternative, returned them or sent notice of dishonor, prior to deadline. National City Bank v. Motor Contract Co., 119 Ga. App. 208, 166 S.E.2d 742 (1969).

Compliance with midnight deadline.

- There was no issue of fact as to whether a check received by a bank was returned to the Federal Reserve Bank by the midnight deadline of June 19, although the Federal Reserve stamped the check received as of June 22, because there was no evidence to contradict a bank officer's deposition that the check was timely returned. The bank had no control over when the Federal Reserve processed the check. Whooping Creek Constr., LLC v. Bartow County Bank, 310 Ga. App. 690, 713 S.E.2d 871 (2011).

Effect of affidavit stating return of items "in customary period."

- Affidavit to effect that return of items by defendant payor bank to depositary bank was "in the customary period of time for the return of said items," cannot be used to nullify O.C.G.A. § 11-4-302. National City Bank v. Motor Contract Co., 119 Ga. App. 208, 166 S.E.2d 742 (1969).

Documentary draft as "sight" draft.

- The mere denomination of a documentary draft as a "sight draft" would not otherwise serve to establish any definite "time allowed" for the payor bank to act pursuant to O.C.G.A. § 11-4-302(b). Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

"Property payable" documentary drafts.

- If the documentary drafts were "property payable," the bank was not required to act by "its midnight deadline" under subsection (a) (now O.C.G.A. § 11-4-302(a)(1)), but was required to act "within the time allowed" under subsection (b) (now O.C.G.A. § 11-4-302(a)(2)). Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

Where the demand item is also a documentary draft, the payor bank need not comply with the midnight deadline that is established for other demand items by O.C.G.A. § 11-4-302(a). Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

Liability under subsection (b) (now O.C.G.A. § 11-4-302(a)(2)) is not liability on the document itself but is liability for the delay in giving notice or return of the item. Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

Noncompliance does not create an action for conversion.

- It is subsection (b) (now O.C.G.A. § 11-4-302(a)(2)) which governs as to the "time allowed" the bank for responding to the original presentment of the documentary drafts to it for payment. Accordingly, an otherwise untimely failure on the part of the bank to accept, pay or return the documentary drafts pursuant to their original specification merely as "sight drafts" may be actionable as a failure to comply with subsection (b) (now O.C.G.A. § 11-4-302(a)(2)), but could not constitute an intentional "refusal" to comply with a demand for payment or return so as to be actionable as a conversion. Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

Compliance with standard of ordinary care.

- If the bank violated subsection (b) (now O.C.G.A. § 11-4-302(a)(2)), it violated the applicable standard of ordinary care for a payor bank and would be liable. Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

Cited in Samples v. Trust Co., 118 Ga. App. 307, 163 S.E.2d 325 (1968); Alimenta (U.S.A.), Inc. v. Stauffer, 568 F. Supp. 674 (N.D. Ga. 1983); National Bank of Ga., Inc. v. Air Atlanta, Inc., 74 Bankr. 426 (Bankr. N.D. Ga. 1987).

Am. Jur. 2d.

- 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 770, 779 et seq. 11 Am. Jur. 2d, Banks and Financial Institutions, §§ 941, 990. 11 Am. Jur. 2d, Bills and Notes, §§ 341 et seq., 368, 373, 380.

C.J.S.

- 9 C.J.S., Banks and Banking, §§ 328 et seq., 397 et seq.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 4-302.

ALR.

- Duty of bank taking bill or note for collection to see that it is returned if not paid, 6 A.L.R. 618.

Construction and effect of UCC §§ 4-301 and 4-302 making payor bank accountable for failure to act promptly on item presented for payment, 22 A.L.R.4th 10.