Court Opinion

ID: 5160043
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:38:58.299384+00
Date Added: 2024-06-11T08:25:34.982849
License: Public Domain

METZGER, Judge,
dissenting.
I respectfully dissent.
The majority opinion in this case relies on Article 3 of the Uniform Commercial Code in reaching its conclusion that the bank is liable. In my view, an analysis under Article 4 of the Uniform Commercial Code is the more appropriate means of resolving this controversy, since Article 4 controls Article 3. Section 4-4-102, C.R.S.; § 4-3-103(2), C.R.S.
Under § 4-4-105(a), C.R.S., the La Junta State Bank was a depositary bank for purposes of the transaction here, it being the first bank to which the check was transferred for collection. Under § 4-4-205(1), C.R.S., a depositary bank has the authority to supply any necessary missing information to complete an indorsement. That section provides:
“A depositary bank which has taken an item for collection may supply any in-dorsement of the customer which is necessary to title unless the item contains the words ‘payee’s indorsement required’ or the like. In the absence of such a *352requirement a statement placed on the item by the depositary bank to the effect that the item was deposited by a customer or credited to his account is effective as the customer’s indorsement.”
Here, at the time that the check was presented to the depositary La Junta State Bank for collection, there was sufficient information given to that bank to trigger the action allowed by § 4-4-205(1), C.R.S. The uncontradicted facts show that the writing “for deposit only” was made by Jerry Quick, and not by Katherine War-nock. As well, the deposit slip attached to the check listed this check and its amount specifically, and it was a deposit slip for an account controlled by Mr. Quick. Furthermore, Katherine Warnock did not have an account in the La Junta State Bank. Hence, the bank’s action in placing the funds in an account beyond the reach of Warnock was proper under the statute, and it should incur no liability therefor.
The purpose of the Uniform Commercial Code is to simplify, clarify, and modernize the law governing commercial transactions and to permit the continued expansion of commercial practices. Section 4-1-102, C.R.S. The comment to § 4-4-205, C.R.S., specifically provides that subsection (1) is designed to speed up collection by eliminating any necessity to return to a non-bank depositor any items he may have failed to indorse.
In my view, the trial court’s judgment was correct, both in terms of a strict statutory analysis under Article 4 of the Uniform Commercial Code, and under a policy rationale to effectuate the purposes for which the Uniform Commercial Code was enacted.
Accordingly, I would affirm the trial court’s judgment.