Case Name: FIRST NATIONAL BANK & TRUST COMPANY OF AUGUSTA v. GEORGIA RAILROAD BANK & TRUST COMPANY et al.
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1977-04-05
Citations: 238 Ga. 693
Docket Number: 31784
Parties: FIRST NATIONAL BANK & TRUST COMPANY OF AUGUSTA v. GEORGIA RAILROAD BANK & TRUST COMPANY et al.
Judges: Nichols, C. J., Undercofler, P. J., Ingram, Hall and Hill, JJ., concur. Jordan, J., dissents.
Reporter: Georgia Reports
Volume: 238
Pages: 693–694

Head Matter:
31784.
FIRST NATIONAL BANK & TRUST COMPANY OF AUGUSTA v. GEORGIA RAILROAD BANK & TRUST COMPANY et al.

Opinion:
Per curiam.
The parties in this case include two banks which use electronic equipment to "read" and process checks presented to them for collection and payment. The first bank to receive a check encodes the amount thereon with magnetic ink. The encoded figure is thereafter relied upon for all subsequent electronic processing. Georgia Railroad Bank and Trust Company accepted for collection a check drawn on First National Bank and Trust Company of Augusta for $25,000 and misencoded it as a $2,500 item. The check was then presented for payment to First National, which, relying on the encoded figure, processed it electronically and paid it as a $2,500 item. When informed of the error, First National took the position that it could not debit the drawer's account for the remaining $22,500 without the latter's consent, since the check had by that time been returned to him. His consent was not forthcoming. Certiorari was granted to determine which of the two banks was responsible for the deficiency as between each other.
Argued March 14, 1977 —
Decided April 5, 1977
Rehearing denied April 27, 1977.
Hull, Towill, Norman, Barrett & Johnson, Patrick J. Rice, for appellant.
Hansell, Post, Brandon & Dorsey, McChesney H. Jeffries, Paul Burke O'Hearn, amicus curiae.
Nixon, Yow, Waller & Capers, Samuel C. Waller, for appellees.
The Court of Appeals was correct in holding First National, the payor bank, responsible únder the circumstances of this case. Once the check had been acted upon by that bank, its drawer no longer had authority to stop payment. ,See Code § 109A-4 — 303 and 109A-4 — 403. The decision of the Court of Appeals reported at 139 Ga. App. 683 (229 SE2d 482) (1976) is accordingly affirmed.
Judgment affirmed.
Nichols, C. J., Undercofler, P. J., Ingram, Hall and Hill, JJ., concur. Jordan, J., dissents.