FILED

June 6, 1997

Cecil Crowson, Jr.

Appellate Court Clerk

I N THE COURT OF APPEALS

FI RST TENNESSEE BANK, NATI ONAL ) HAMI LTON CHANCERY

ASSOCI ATI ON, ) C. A. NO. 03A01- 9701- CH- 00014

 )

 )

 Pl a i ntif f - Appe lle e )

 )

 )

 )

 )

 )

vs . ) HON. R. VANN OWENS

 ) CHANCELLOR

 )

 )

 )

 )

 )

J ESSE O. QUI LLI AN, ) AFFI RMED AND REMANDED

 )

 De f e nda nt - Appe l l a nt )

RI CHARD A. FI SHER, Loga n, Thomps on, Mi l l e r , Bi l bo, Thomps on &

Fi s he r , P. C. , Cl e ve l a nd, for Appe lla nt .

THOMAS L. N. KNI GHT, Gr i s ha m, Kni ght & Hoope r , Cha t t a nooga , f or

Appe l l ee.

O P I N I O N

Mc Mur r a y, J .
2

Thi s c a s e or i gi na t e d a s a n a c t i on t o c ol l e c t moni e s due unde r

t he t e r ms of a pr omi s s or y not e e xe c ut e d by t he de f e nda nt t o t he

pl a i ntif f Fi r s t Te nne s s ee Ba nk, Na t i ona l As s oc i a t i on. An a ns we r

wa s f ile d by t he de f e nda nt a dmi t t i ng t he e xe c ut i on of t he not e a nd

t ha t t he r e wa s a n out s t a ndi ng ba l a nc e t he r e on. He a l s o f ile d a

c ount e r c l a i m i n whi c h he s ought a s e t of f a nd da ma ge s f or f or ge d

c hecks dr a wn on hi s a c c ount a nd pa i d by t he ba nk. The t r i a l c our t

on mot i on of t he pl a i nt i f f , e nt e r e d a s umma r y j udgme nt a ga i ns t t he

de f e nda nt on t he or i gi na l c ompl a i nt a nd di s mi s s e d t he c ount e r c l a i m.

A j udgme nt i n t he a mount of $34, 399. 24 wa s e nt e r e d a ga i ns t t he

de f e nda nt . Thi s appeal r e s ul t e d. We af f i r m t he j udgme nt of t he

t r i a l c our t .

The de f e nda nt c ha l l e nge s t he pr opr i e t y of t he t r i a l c our t ' s

act i on i n gr a nt i ng t he pl a i nt i f f ' s mot i on f or s umma r y j udgme nt .

The pr i ma r y t hr us t of t he a r gume nt put f or t h by t he de f e nda nt i s

t ha t t he ba nk wa s ne gl i ge nt by f a i l i ng t o e xe r c i s e or di na r y c a r e

a nd to a c t with comme r c i a l r eas ona bl e ne s s i n deal i ng wi t h t he

de f e nda nt ' s a c c ount .

Unde r t he undi s put e d f a c t s i n t he c a s e , t he de f e nda nt ' s

bookke e pe r ha d, f or a pe r i od of year s ( 1992- 1995) , f or ge d t he

de f e nda nt ' s na me on a l a r ge numbe r of checks , cas he d t he checks and

us e d t he m f or he r be ne f i t . She i s now unde r i ndi c t me nt f or

e mbezzl e me nt . The de f e nda nt a dmits tha t it wa s the pr act i c e of hi s
3

offi c e f or hi m t o s i gn c he c ks pa ya bl e t o c a s h a nd ha ve t he

bookke e pe r t a ke t he m t o t he ba nk, c a s h t he m f or hi m a nd gi ve hi m

t he cas h. The bookke e pe r a ppa r e nt l y f or ge d s e ve r a l c he c ks ma de

pa ya bl e t o c a s h, c a s he d t he c he c ks a nd c onve r t e d t he f unds t o he r

own us e . She f ur t he r wr ot e c he c ks t o ot he r s i n pa yme nt of he r

pe r s ona l obl i ga t i ons .

The re c or d fur t he r r e f l e c t s tha t the ba nk ha d s e nt s t a t e me nt s

of t he de f e nda nt ' s a c c ount , i nc l udi ng cancel e d checks , t o hi m at

t he pr ope r a ddr e s s e ve r y mont h. The de f e nda nt a dmi t s r e c e i vi ng t he

s t a t e me nt s a nd t ha t he di d not r e vi e w t he c a nc e l e d c he c ks nor

r econc i l e hi s a c c ount dur i ng t he pe r i od wi t hi n whi c h t he embezzl e -

me nt t ook pl ace. Ra t he r , he de l e ga t e d t ha t dut y t o hi s bookke e pe r

who i s c ha r ge d wi t h e mbe z z l e me nt . The de f e nda nt di s c ove r e d t he

f or ge r i e s s ome t i me i n 1995 a nd r e por t e d t he m t o t he ba nk on Apr i l

6, 1995.

STANDARD OF REVI EW

Our s t a nda r d of r e vi e w i n c ons i de r i ng t he pr opr i e t y of s umma r y

j udgme nt i s a s f ol l ows :

The s t a nda r ds gove r ni ng a n a ppe l l a t e c our t ' s r e vi e w

of a t r i a l c our t ' s a c t i on on a mot i on f or s umma r y

j udgme nt a r e we ll s e ttle d. Si nc e our i nqui r y i nvol ve s

pur e l y a que s t i on of l a w, no pr e s umpt i on of c or r e c t ne s s

a t t a c he s t o t he t r i a l c our t ' s j udgme nt , a nd our t a s k i s

c onf i ne d t o r e vi e wi ng t he r e c or d t o de t e r mi ne whe t he r t he
4

r e qui r e me nt s of Te nn. R. Ci v. P. 56 ha ve be e n me t . Cowde n

v. Sovr a n Ba nk/ Ce nt r a l Sout h, 816 S. W. 2d 741, 744 ( Te nn.

1991) . Te nn. R. Ci v. P. 56. 03 pr ovi de s t ha t s umma r y

j udgme nt i s onl y a ppr opr i a t e whe r e : ( 1) t he r e i s no

ge nui ne i s s ue wi t h r e ga r d t o t he ma t e r i a l f act s r e l e va nt

t o t he c l a i m or de f e ns e c ont a i ne d i n t he mot i on, Byr d v.

Ha l l , 847 S. W. 2d 208, 210 ( Te nn. 1993) ; a nd ( 2) t he

movi ng pa r t y i s e nt i t l e d t o a j udgme nt a s ma t t e r of l a w

on t he undi s put e d f a c t s . Ande r s on v. St a nda r d Re gi s t e r

Co. , 559 ( Te nn. 1993) . The movi ng pa r t y ha s t he bur de n of

pr ovi ng tha t its motion s a tis f i e s the s e r e qui r e me nt s .

Downe n v. Al l s t a t e I ns . Co. , 524 ( Te nn. 1991) .

The s t a nda r ds gove r ni ng t he a s s e s s me nt of e vi de nc e

i n t he s umma r y j udgme nt c ont e xt ar e al s o we l l es t a bl i s he d. Cour t s mus t vi e w t he e vi de nc e i n t he l i ght mos t

f a vor a bl e t o t he nonmovi ng pa r t y a nd mus t a l s o dr a w a l l

r eas ona bl e i nf e r e nc e s i n t he nonmovi ng pa r t y' s f a vor .

Byr d, 847 S. W. 2d a t 210- 11. Cour t s s houl d gr a nt a s umma r y

j udgme nt onl y whe n bot h t he f a c t s a nd t he c onc l us i ons to

be dr a wn from t he f act s pe r mi t a r eas ona bl e pe r s on t o

r e a c h onl y one c onc l us i on. I d.

Ca r ve ll v. Bottoms , 900 S. W. 2d 23 ( Te nn. 1995) .

The cha ncel l or i s s ue d a s c hol a r l y me mor a ndum opi ni on i n whi c h

he f ound t ha t t he r e we r e s ome di s put e d i s s ue s of f a c t but t ha t

t he r e wa s no ge nui ne i s s ue of a ma t e r i a l f act whi c h r e qui r e d t ha t

t he cas e be t r i e d. The cha ncel l or not e d t ha t " [ o] ne of t he

f unda me nt a l pr i nc i pl e s of c omme r c i a l l a w i s t ha t ' no pe r s on i s

lia bl e on a n i ns t r ume nt unl e s s hi s s i gna t ur e a ppe a r s t he r e on' "

c iting Ka l e y v. Uni on Pl a nt e r ' s Na t ' l Ba nk, 775 S. W. 2d 607, 609. He

f ur t he r c or r e c t l y not e d t ha t t he r e a r e e xc e pt i ons t o t hi s ge ne r a l

r ul e . The e xc e pt i on upon whi c h t he c our t ba s e s i t s de c i s i on i s t he

pr ovi s i ons of T. C. A. § 47- 4- 406, whi c h a t a ll time s ma t e r i a l

pr ovi de d a s f ol l ows :
5

47- 4- 406, Cus t omer' s dut y t o di s c over and repor t

unaut hor i z e d s i gnat ur e or aut hor i z at i on. —( 1) Whe n a ba nk

s e nds t o i t s cus t ome r s a s t a t e me nt of account accompa ni e d

by i t e ms pa i d i n good f a i t h i n s uppor t of t he de bi t

e nt r i e s or hol ds t he s t a t e me nt a nd i t e ms pur s ua nt t o a

r e que s t or i ns t r uc t i ons of i t s c us t ome r or ot he r wi s e i n

a r eas ona bl e ma nne r ma ke s t he s t a t e me nt and i t e ms

a va i l a bl e t o t he c us t ome r , the c us t omer mus t exerci s e

reas onabl e care and pr ompt ne s s t o exami ne t he s t at e me nt

and i t e ms t o di s c ove r hi s unaut hor i z e d s i gnat ur e or any

al t e r at i on on an i t e m and mus t not i f y t he bank pr ompt l y

af t er di s c overy t hereof . ( Empha s i s a dde d) .

( 2) I f t he ba nk es t a bl i s he s t ha t t he cus t ome r f a i l e d

with r e s pe c t t o a n i t e m t o c ompl y wi t h hi s dut i e s i mpos e d

on t he c us t ome r by s ubs e c t i on ( 1) t he c us t ome r i s

pr e c l ude d f r om a s s e r t i ng a ga i ns t t he ba nk:

( a ) Hi s una ut hor i z e d s i gna t ur e or a ny a l t e r a t i on

on t he i t e m i f t he ba nk a l s o e s t a bl i s he s t ha t

i t s uf f e r e d a l os s by r e a s on of s uc h f a i l ur e ;

a nd

( b) An una ut hor i z e d s i gna t ur e or a l t e r a t i on by t he

s a me wr ongdoe r on a ny ot he r i t e m pa i d i n good

f a ith by t he ba nk a f t e r the f i r s t item a nd

s t a t e me nt wa s ava i l a bl e t o t he cus t ome r f or a

r e a s ona bl e pe r i od not e xc e e di ng f our t e e n ( 14)

cal e nda r da ys a nd be f or e t he ba nk r e c e i ve s

notif i c a tion f r om t he c us t ome r of a ny s uc h

una ut hor i z e d s i gna t ur e or a l t e r a t i on.

( 3) A c us t ome r who doe s not wi t hi n one ( 1) ye a r f r om

t he time the s t a t eme nt a nd items a r e ma de ava i l a bl e t o

t he c us t ome r ( s ubs e c t i on ( 1) ) di s c ove r a nd r e por t hi s

una ut hor i z e d s i gna t ur e or a ny a l t e r a t i on on t he f a c e or

back of t he i t e m or doe s not wi t hi n t hr e e ( 3) ye a r s from

t ha t t i me di s c ove r a nd r e por t a ny una ut hor i z e d e ndor s e -

me nt i s pr e c l ude d f r om a s s e r t i ng a ga i ns t t he ba nk s uc h

una ut hor i z e d s i gna t ur e or e ndor s e me nt or s uc h a l t e r a t i on.

( 4) I f unde r t hi s s e c t i on a pa yor ba nk ha s a va l i d

de f e ns e a ga i ns t a c l a i m of a c us t ome r upon or r e s ul t i ng

from pa yme nt of a n i t e m a nd wa i ve s or f a i l s upon r e que s t

t o as s e r t t he de f e ns e t he ba nk ma y not as s e r t aga i ns t any

c ol l ect i ng ba nk or ot he r pr i or pa r t y pr e s e nt i ng or

t r a ns f e rri ng t he i t e m a c l a i m ba s e d upon t he una ut hor i z e d

s i gna t ur e or a lte r a tion gi vi ng r i s e to the c us t ome r ' s

c l a i m. [ Ac t s 1963, c h. 81, § 1 ( 4- 406) l 1991, c h. 52, §

3. ]
6

The de f e nda nt i ns i s t s t ha t i t i s ne c e s s a r y t o l ook t o t he

l e gi s l a t i ve hi s t or y of T. C. A. § 47- 4- 406 f or a pr ope r i nt e r pr e t a -

t i on of t he e na c t me nt . We a r e of t he opi ni on t ha t t he s t a t ut e i s

una mbi guous a nd t ha t t he l e gi s l a t i ve hi s t or y i s i r r e l e va nt .

 The mos t ba s i c r ul e of s t a t ut or y c ons t r uc t i on i s

t o as cer t a i n and gi ve e f f e c t t o t he i nt e nt i on a nd pur pos e

of the le gi s l a t ur e . Wor r a l l v. Kr oge r Co., 545 S. W. 2d 736

( Te nn. 1977) . Le gi s l a t i ve i nt e nt or pur pos e i s t o be

a s cer t a i ne d pr i ma r i l y f r om t he na t ur a l a nd or di na r y

me a ni ng of t he l a ngua ge us e d, wi t hout f or c e d or s ubt l e

c ons t r uc tion t ha t woul d l i mi t or e xt e nd t he me a ni ng of

t he l a ngua ge . Na tiona l Ga s Di s t r i but or s , Inc . v . St a t e ,

804 S. W. 2d 66 ( Te nn. 1991) . Whe r e t he l a ngua ge c ont a i ne d

withi n t he f our cor ne r s of a s t a t ut e i s pl a i n, cl ear , and

una mbi guous a nd the e na c t me nt is withi n le gi s l a tive

c ompe t e nc y, " t he dut y of t he c our t s i s s i mpl e a nd

obvi ous , na me l y, t o s a y s i c le x s c r i pt a , a nd obe y i t . "

Mille r v. Childr e s s , 21 Te nn. ( 2 Hum. ) 319, 321- 22

( 1841) .

The de f e nda nt a l s o i ns i s t s t ha t t he ba nk i s s ubj e c t t o

c ompa r a t i ve ne gl i ge nc e a s a dopt e d i n Mc I nt yr e v. Ba l l e ntine , 833

S. W. 2d 52 ( Te nn. 1992) We f i nd no a ut hor i t y f or t hi s pr opos i t i on

a s the s t a t ut e e xi s t e d a t t i me s ma t e r i a l t o thi s di s put e . The

s t a t ut e wa s a me nde d i n 1995. The 1995 a me ndme nt a dde d s e ve r a l

pr ovi s i ons to T. C. A. § 47- 4- 406 i nc l udi ng a pr ovi s i on t ha t " [ i ] f

t he c us t ome r pr ove s t ha t t he ba nk di d not pa y t he i t e m i n good

f a ith, t he pr e c l us i on unde r s ubs e c t i on ( d) doe s not a ppl y. " The

c omme nt s t o t he of f i c i a l t e xt a f t e r t he 1995 a me ndme nt s e e m t o

i ndi c a t e t ha t c ompa r a t i ve ne gl i ge nc e ma y now be a c ons i de r a t i on
7

unde r thi s s e c t i on of t he c ode . The c omme nt s , i n pe r t i ne nt pa r t

a r e as f ol l ows :

4. Subs ect i on ( e ) r e pl aces for me r s ubs e c t i on ( 3) a nd

pos e s a modi f i e d c ompa r a t i ve ne gl i ge nc e t e s t f or de t e r -

mi ni ng lia bility. Se e the di s c us s i on on t hi s poi nt i n

t he Comme nt s t o Se c t i ons 3- 404, 3- 405, a nd 3- 406. The

t e r m " good f a i t h" i s de f i ne d i n Se c t i on 3- 103( a ) ( 4) a s

i nc l udi ng "obs e r va nce of r eas ona bl e comme r c i a l s t a nda r ds

of f a i r de a l i ng. " The c onnot a t i on of t hi s s t a nda r d i s

f a i r ne s s a nd not a bs e nc e of ne gl i ge nc e .

Si nce, howe ve r , t hi s a me ndme nt wa s not enact e d unt i l af t e r the

da t e s ma t e r i a l to thi s cas e , t he a me ndme nt ha s no c ons e que nc e a s t o

t he out c ome he r e . We be l i e ve t ha t t he s a me r eas oni ng as appl i e d i n

Ve ndi ng Cha t t a nooga , I nc . , v. Ame r i c a n Na t ' l Ba nk & Tr us t Co., 730

S. W. 2d 624 ( Te nn. 1987) i s a ppl i c a bl e he r e . In Ve ndi ng, t he c our t

not e d:

I n a f or ge r y cas e , we s t a r t wi t h t he ba s i c pr e mi s e

a nd r ul e of l a w t ha t be t we e n t he c us t ome r a nd t he ba nk,

t he ba nk mus t be a r t he l os s whe r e moni e s ha ve be e n pa i d

out due t o a t hi r d pa r t y f or gi ng t he c us t ome r ' s s i gna t ur e

on a c he c k. Te nn. Code Ann § 47- 3- 401( 1) , pr ovi de s " No

pe r s on i s l i a bl e on a n i ns t r ume nt unl e s s hi s s i gna t ur e

a ppe a r s t he r e on. " The s i gna t ur e of t he dr a we r i s one of

t he es s e nt i a l el e me nt s t o t he va l i di t y of a check and t he

ge ne r a l r ul e i s t he ba nk mus t know t he ge nui ne ne s s of t he

de pos i t or ' s s i gna t ur e . Ame r i c a n Na tiona l Ba nk v. Mile s ,

18 Te nn. App. 440, 79 S. W. 2d 47 ( 1935) .

An e xc e pt i on t o t hi s ge ne r a l r ul e i s cont a i ne d i n

T. C. A. § 47- 4- 406, whi c h, a s pe r t i ne nt he r e pr ovi de s :

Cus t ome r ' s dut y t o di s c ove r a nd r e por t una ut hor i z e d

s i gna t ur e or a l t e r a t i on. - - ( 1) Whe n a ba nk s e nds t o i t s

c us t ome r a s t a t e me nt of account accompa ni e d by i t e ms pa i d

i n good f a i t h i n s uppor t of t he de bi t e nt r i e s or hol ds
1

This provision was removed by the 1991 amendment.

8

t he s t a t e me nt and i t e ms pur s ua nt t o a r e que s t or ins t r uc -

tions of its c us t ome r or ot he r wi s e i n a r e a s ona bl e ma nne r

ma ke s t he s t a t e me nt and i t e ms ava i l a bl e t o t he c us t ome r ,

t he c us t ome r mus t exe r c i s e r eas ona bl e car e and pr ompt ne s s

t o exa mi ne the s t a t e me nt a nd i t e ms t o di s c ove r hi s

una ut hor i z e d s i gna t ur e or a ny a l t e r a t i on on a n i t e m a nd

mus t not i f y t he ba nk pr ompt l y a f t e r di s c ove r y t he r e of .

( 2) I f t he ba nk e s t a bl i s he s t ha t t he cus t ome r f a i l e d with

r e s pe c t t o a n i t e m t o c ompl y wi t h t he dut i e s i mpos e d on

t he c us t ome r by s ubs e c t i on ( 1) t he c us t ome r i s pr e c l ude d

f r om a s s e r t i ng a ga i ns t t he ba nk:

( a ) hi s una ut hor i z e d s i gna t ur e or a ny a l t e r -

a tion on t he item if the ba nk a l s o e s t a blis he s tha t

i t s uf f e r e d a l os s by r e a s on of s uc h f a i l ur e ; a nd 

( b) a n una ut hor i z e d s i gna t ur e or a l t e r a t i on by

t he s a me wr ongdoe r on a ny ot he r i t e m pa i d i n good

f a ith by t he ba nk af t e r the f i r s t item a nd s t a t e -

me nt wa s ava i l a bl e t o t he cus t ome r f or a r eas ona bl e

pe r i od not e xc e e di ng f our t e e n ( 14) c a l e nda r da ys

a nd be f or e t he ba nk r e c e i ve s not i f i c a t i on f r om t he

c us t ome r of a ny s uc h una ut hor i z e d s i gna t ur e or

a lte r a tion.

( 3) The pr e c l us i on unde r s ubs e c t i on ( 2) doe s

not a ppl y i f t he c us t ome r es t a bl i s he s l ack of

or di na r y c a r e on t he pa r t of t he ba nk i n pa yi ng t he

item( s ) .

1

The a ppe l l a nt ba nk c ont e nds t ha t t he t r i a l c our t a nd

t he Cour t of Appe a l s we r e i n e r r or i n t he a ppl i c a t i on of

t he f act s of t hi s cas e t o t he law a s c ont a i ne d in T. C. A.

§ 47- 4- 406, i n tha t: ( 1) pl a i ntif f , Ve ndi ng Cha t t a nooga ,

I nc . , di d not exe r c i s e r eas ona bl e car e t o exa mi ne i t s

ba nk st a t e me nt a nd t he e nc l os e d c he c ks i n or de r t o

di s c ove r t he una ut hor i z e d s i gna t ur e s of i t s pr e s i de nt on

t he f or ge d c he c ks , a nd f a i l e d t o r e por t t he f or ge r i e s to

t he ba nk a s r e qui r e d by l a w; a nd ( 2) t he ba nk e xe r c i s e d

or di na r y c a r e i n honor i ng t he c he c ks be a r i ng t he f or ge d

s i gna t ur e s .

Al l f or t y c he c ks i nvol ve d " a n una ut hor i z e d s i gna t ur e

or a l t e r a t i on of t he s a me wr ongdoe r , " a nd t hus t he

s peci a l pr ovi s i on of s ubs e c t i on ( 2) ( b) of T. C. A. §

47- 4- 406 c ome s i nt o pl a y. Thus , i f t he c us t ome r i s f ound

not t o ha ve exe r c i s e d r eas ona bl e car e i n exa mi ni ng t he
9

ba nk s t a t e me nt s , t he ba nk woul d not be l i a bl e f or

f or ge r i e s pa i d af t e r t he f i r s t f or ge d check and s t a t e me nt

wa s ava i l a bl e t o t he cus t ome r f or a r eas ona bl e pe r i od not

e xceedi ng f our t e e n cal e nda r da ys be f or e t he ba nk r e c e i ve s

not i f i c a t i on f r om t he c us t ome r of t he f or ge r y.

The de f e nda nt r e a di l y a dmi t s t ha t he di d not e xa mi ne t he

s t a t e me nt s of a c c ount a nd c he c ks t ha t we r e s e nt t o hi m by t he ba nk.

Hi s de pos i t i on t e s t i mony di s c l os e s t he f ol l owi ng:

* * * * *

Q. Al l r i ght. But with r e s pe c t to, s a y, thi s pe r i od

of about a year and a ha l f , t wo year s t ha t s he [t he

bookke e pe r ] wor ke d f or you, how ma ny time s do you

t hi nk you woul d ha ve l ooke d a t a ba nk s t a t e me nt

f r om Fi r s t Te nne s s e e Ba nk on t hi s a c c ount ?

A. Ma ybe f our or f i ve t i me s .

Q. Al l r i ght . Wa s t he r e a nyt hi ng t ha t you not i c e d on

a ny of t hos e f our or f i ve oc c a s i ons t ha t wa s unus ua l ?

A. Not hi ng unus ua l a t t he t i me .

Q. Al l r i ght, s i r . But di d you not a ttempt to ma t c h

t he checks t ha t we r e i n t hos e s t a t e me nt s with the

s t a t e me nt s t he ms e l ve s , di d you?

A. No, s i r . I j us t accept e d i t as a t r ue copy and

wha t e ve r .

Q. But you woul d be a wa r e of t he f a c t t ha t t he be s t

wa y or e a s i e s t wa y t o de t e c t a f or ge r y woul d be t o

c ompa r e t he c he c k i t s e l f wi t h t he e nt r y on t he

s t a t eme nt, c or r e c t, s i r ?

A. Tha t ' s cor r ect .

Q. Al l r i ght . I n ot he r wor ds , you l ooke d a t nume r ous

c hecks he r e a f e w mi nut e s a go a nd c oul d t e l l us

e a s i l y whi c h we r e not f or ge r i e s , r i ght ?
10

A. We ll, I l ooke d a t t he s e a t l e ngt h a n hour or t wo

a go. I di dn' t s t udy t he one s t ha t c a me t hr ough a s

c l os e l y a s I di d t he s e t oda y.

Q. My poi nt i s , Dr Qui l l i a n, ha d you l ooke d a t t he

c hecks whe n t he y came i n each mont h, each and eve r y

mont h, mont h i n a nd mont h out , you c oul d ha ve

de t e c t e d whi c h we r e your s i gna t ur e s a nd whi c h we r e

f or ge r i e s ?

A. I f I ' d be e n a l e r t , a l e r t e nough t o, I woul d ha ve ,

but I ha d no i de a t ha t a nyt hi ng wa s wr ong.

Q. Oka y. But I ' m not a s ki ng you, a nd I woul d a s k or

r e que s t t ha t you a ns we r my que s t i on. Ha d you

l ooke d a t t hos e c he c ks , you c oul d ha ve de t ect e d

whi c h one s we r e f or ge r i e s , c oul d you not ?

A. I c oul d. I ha ve done s o t oda y.

* * * * *

Si mpl y s t a t e d, t he de f e nda nt f a i l e d t o exe r c i s e r eas ona bl e

car e a nd di l i ge nc e i n di s c ove r i ng t he f or ge r i e s a nd di d not t i me l y

not i f y t he ba nk. " . . . a de pos i t or mus t be he l d c ha r geabl e with

knowl e dge of a l l t he f a c t s t ha t a r e a s ona bl e a nd pr ude nt e xa mi na -

tion of t he r e t ur ne d ba nk s t a t e me nt s woul d ha ve di s c l os e d ha d i t

been ma de by a pe r s on on t he de pos itor ' s be ha l f who ha d not

pa r t i c i pa t e d in the f or ge r i e s . " Ve ndi ng Cha t t a nooga , s upr a .

I n c onc l us i on, we c onc ur wi t h t he f i ndi ngs of t he t r i a l c our t

t ha t t he r e ar e no ma t e r i a l i s s ue s i n t hi s cas e whi c h r e qui r e a

t r i a l . We a f f i r m the judgme nt of the tr i a l c our t in a ll r e s pe c t s .
11

Cos t s of t hi s cas e ar e as s e s s e d t o t he de f e nda nt . Thi s cas e

i s r e ma nde d t o t he t r i a l c our t .

______________________________

 Don T. Mc Mur r a y, J udge

CONCUR:

___________________________________

He r s c he l P. Fr a nks , J udge

___________________________________

Cha r l e s D. Sus a no, J r . , J udge
I N THE COURT OF APPEALS

FI RST TENNESSEE BANK, NATI ONAL ) HAMI LTON CHANCERY

ASSOCI ATI ON, ) C. A. NO. 03A01- 9701- CH- 00014

 )

 )

 Pl a i ntif f - Appe lle e )

 )

 )

 )

 )

 )

vs . ) HON. R. VANN OWENS

 ) CHANCELLOR

 )

 )

 )

 )

 )

J ESSE O. QUI LLI AN, ) AFFI RMED AND REMANDED

 )

 De f e nda nt - Appe l l a nt )

JUDGMENT

Thi s a ppe a l came on t o be he a r d upon t he r e c or d f r om t he

Cha ncer y Cour t of Ha mi l t on Count y, br i e f s a nd a r gume nt of c ouns e l .

Upon c ons i de r a t i on t he r e of , t hi s Cour t i s of opi ni on t ha t t he r e wa s

no r e ve r s i bl e e r r or i n t he t r i a l c our t .

We a f f i r m the judgme nt of the tr i a l c our t in a ll r e s pe c t s .

Cos t s of ar e as s e s s e d t o t he de f e nda nt . Thi s cas e i s r e ma nde d t o

t he tr i a l c our t .
13

 PER CURI AM