Editor's notes.

- In light of the similarity of the issues dealt with under the provisions, decisions under former Code 1933, § 13-2044 are included in the annotations for this section.

Check is "properly payable" when it was made payable to a named payee and delivered to that payee. Delivery to either of the partners of a partnership constitutes delivery to the partnership. Mustin v. Citizens & S. Nat'l Bank, 168 Ga. App. 549, 309 S.E.2d 822 (1983).

A check bearing a forged endorsement is not "properly payable." Trans-American Steel Corp. v. Federal Ins. Co., 535 F. Supp. 1185 (N.D. Ga. 1982).

Liability of bank for wrongful honor of forged endorsement.

- The liability of a depositary bank for wrongly honoring a forged endorsement will be reduced by any amount the forger has already paid in restitution to the drawer. Trans-American Steel Corp. v. Federal Ins. Co., 535 F. Supp. 1185 (N.D. Ga. 1982).

Drawee bank is generally liable to drawer customer for payment of check not "properly payable." Perini Corp. v. First Nat'l Bank, 553 F.2d 398 (5th Cir. 1977).

On plaintiff commercial checking account customer's suit against defendant, its payor bank, under O.C.G.A. § 11-4-401, alleging checks forged by it employee, although the customer reasonably should have detected the unauthorized payment by examining each check's payee information and the statements, and the customer thus failed to comply with its duties under O.C.G.A. § 11-4-406(c), (d)(2), the payor bank made no showing that it complied with local industry standards or acted consistently with general banking usage; the comparative negligence test of O.C.G.A. § 11-4-406(e) applied. Ownbey Enters. v. Wachovia Bank, N.A., 457 F. Supp. 2d 1341 (N.D. Ga. 2006).

Bank's duty to obtain endorsements of all joint payees.

- A joint payee endorsing check alone does not have requisite authority, and a bank paying over sole endorsement of one joint payee is liable for its wrongful payment. Trust Co. Bank v. Atlanta IBM Employees Fed. Credit Union, 245 Ga. 262, 264 S.E.2d 202 (1980).

Effect of failure of collecting bank to supply missing payee's endorsement.

- Absence of payee's endorsement and failure of collecting bank to supply missing endorsement as it was authorized to do did not affect payor bank's right to pay check and to debit plaintiffs' account. First Nat'l Bank v. Barrett, 141 Ga. App. 161, 233 S.E.2d 24 (1977).

Customer's failure to discover payment of improperly endorsed check.

- Failure of customer to promptly discover bank's mistake in accepting improperly endorsed check bars customer from otherwise valid claim against bank for charging customer's account for that check. Trust Co. Bank v. Atlanta IBM Employees Fed. Credit Union, 245 Ga. 262, 264 S.E.2d 202 (1980).

Effect of general deposit.

- Deposit of money in bank on general deposit creates relation of creditor and debtor between bank and depositor and debtor bank can discharge its liability to general depositor only by paying money to depositor, or as directed by depositor and cannot discharge its liability by accepting and paying forged checks drawn in name of the depositor against the bank. White v. Georgia R.R. Bank & Trust Co., 71 Ga. App. 78, 30 S.E.2d 118 (1944) (decided under former Code 1933, § 13-2044).

Charging depositor's account for payments on forged checks.

- A bank is bound to know signatures of its customers, and it cannot legally charge amount paid on forged check to account of depositor whose name was forged, but must be considered as having made payment out of its own funds. White v. Georgia R.R. Bank & Trust Co., 71 Ga. App. 78, 30 S.E.2d 118 (1944) (decided under former Code 1933, § 13-2044).

Signature of alleged incompetent, made by another guiding his hand.

- Allegations that, while depositor was on death bed and not physically or mentally in condition to transact business, depositor's name was written on a check by one of the defendants who held depositor's hand and guided it and that signature was not written by depositor and was not depositor's act and deed, were sufficient to charge that check in question was a forgery (see also § 11-4-405). White v. Georgia R.R. Bank & Trust Co., 71 Ga. App. 78, 30 S.E.2d 118 (1944) (decided under former Code 1933, § 13-2044).

Cited in Andrews v. Citizens Bank, 139 Ga. App. 763, 229 S.E.2d 501 (1976); Thornton & Co. v. Gwinnett Bank & Trust Co., 151 Ga. App. 641, 260 S.E.2d 765 (1979); Georgia Cas. & Sur. Co. v. Tennille Banking Co. (In re Smith), 51 Bankr. 904 (Bankr. M.D. Ga. 1985); National Bank v. Weiner, 180 Ga. App. 61, 348 S.E.2d 492 (1986); Eason Publications, Inc. v. Nationsbank, 217 Ga. App. 726, 458 S.E.2d 899 (1995); Summit Transp. Servs., Inc. v. NationsBank, 232 Ga. App. 8, 500 S.E.2d 911 (1998).

Payment of overdraft by drawee gives it remedy against drawer.

- Where drawee bank turns money over to collecting bank who is a holder in due course on an instrument which would overdraw drawee bank's customer's account, it has turned over its own money on the instrument, and has both a remedy against its customer under O.C.G.A. § 11-4-401, and also a remedy on the instrument against drawer provided drawee does not give up possession of the instrument. FDIC v. West, 244 Ga. 396, 260 S.E.2d 89 (1979).

Am. Jur. 2d.

- 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 770, 779 et seq.

C.J.S.

- 9 C.J.S., Banks and Banking, § 341 et seq.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 4-401.

ALR.

- Banks: effect of overcertification of check, 2 A.L.R. 86.

Effect of verbal order with respect to payment of check or transfer of bank deposit, 2 A.L.R. 175.

Acceptance of checks by telegraph or telephone, 2 A.L.R. 1146; 13 A.L.R. 989.

Right of drawee bank to charge back a credit given on a forged check, 5 A.L.R. 1566.

Right of bank to recover amount of overdraft from depositor, 12 A.L.R. 360.

Right of bank to charge back check drawn upon itself, which it has credited to a depositor under mistaken belief that the drawer's account is good, 15 A.L.R. 709.

Burden of proof as to alteration not apparent on face of instrument, 31 A.L.R. 1455.

Duty of bank to prior parties to the paper to apply deposit to credit of endorser on paper owned by bank, 37 A.L.R. 578.

Bank's right to recover back money paid on stopped check, 39 A.L.R. 1239.

Rights and duties where check is presented to bank which exceeds balance on deposit, 62 A.L.R. 187.

Bank depositor's act in seeking restitution from third person to whom, or for benefit of whom, the bank has paid out the deposit, as election of remedy precluding action against bank, 144 A.L.R. 1440.