Court Opinion

ID: 9597654
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:01:34.258081+00
Date Added: 2024-06-11T12:18:53.451257
License: Public Domain

Smith, Judge,
dissenting.
Refrigeration Supplies, Inc., appellant, brought suit against J. J. Bartley, Trust Company of Columbus, and the First National Bank of Columbus, appellees, to recover amounts allegedly due him under six checks naming the appellant as a joint payee which were negotiated and paid without any endorsement from the appellant. The trial court denied the appellant’s motion for summary judgment and granted a motion for summary judgment in favor of each appellee. I believe that under the uncontradicted facts the appellant has no cause of action against the appellees either in conversion or in contract; thus, the judgment should be affirmed.
Bartley had contracted with Charles Tomberlin, Inc. for the installation of heating and air conditioning systems in Bartley’s apartment complex. Tomberlin in turn contracted with the appellant to obtain the equipment needed. After the time for filing a materialman’s lien had expired, Bartley inquired of the appellant whether it had been fully paid by Tomberlin; the appellant replied that it had. Nevertheless, without any prior agreement or understanding that he would do so, Bartley made payment checks to the order of "Charles Tomberlin, Inc., and Refrigeration Supplies, Inc.” The checks were delivered to Tomberlin, only, and Tomberlin deposited them in its private account at Trust Company of Columbus. The checks were forwarded to the First National Bank of Columbus, the drawee bank, which paid the funds from Bartley’s account. Some four years later the appellant discovered the existence of these checks and he brought this suit, claiming the appellees converted his property, and claiming that he was a third party beneficiary of the deposit contract between Bartley and First National.
*1441. The conversion cause of action fails because the appellant is not a proper party to bring the action. The Uniform Commercial Code § 3-419 (Code Ann. § 109A-3 — 419) provides, "An instrument is converted when . .. (c) it is paid on a forged indorsement.” The cause of action is thus set forth, but the UCC gives no aid in deciding who may bring the action. It is well settled, however, that an action for conversion or trover can be brought only by one who has title, possession, or a right to possession in the property. McElroy v. Williams Bros. Motors, 104 Ga. App. 435 (121 SE2d 917); Southern Exp. Co. v. Sinclair, 130 Ga. 372 (60 SE 849). Clearly, the appellant had none of these. Merely being named as the payee on a check did not transfer title or a right of possession to him. At the time Bartley drafted the check, all incidents of title and ownership remained in him. When he delivered the check to Tomberlin, with the intent that the funds would go only to Tomberlin, he transferred title and possession to Tomberlin and to no one else. Tomberlin did not take the check as agent for the appellant, thereby giving the appellant an ownership or possessory interest.
The cases cited by the appellant, and the case relied upon by the majority, are distinguishable becáuse in them there was an agreement that the check would be made payable to joint payees. There thus was an intent to transfer title in the checks to both parties. Insurance Co. of N. A. v. Atlas Supply Co., 121 Ga. App. 1 (172 SE2d 632). Here, there was no such agreement or intent.
2. The appellant has no cause of action in contract. The check did not operate as an assignment of any funds to the appellant as payee. UCC § 3-409 (Code Ann. § 109A-3 — 409); Lambeth v. Lewis, 114 Ga. App. 191 (150 SE2d 462).
Had First National complied with its depositor’s contract with Bartley by paying the funds over only to the appellant and Tomberlin jointly or on their joint endorsement, then the appellant surely would have benefited from the contract. But such a mere incidental benefit does not give the appellant a cause of action as a third party beneficiary. McWhirter Material Handling Co. v. Ga. Paper Stock Co., Inc., 118 Ga. App. 582 (164 *145SE2d 852). The nonassignment provision of § 3-409 clearly means that a payee will have a cause of action, if any, in conversion. The appellant did not have that cause of action in this case, so the summary judgment in favor of the appellees was proper.
Accordingly, I would affirm the judgments of the trial court.