Court Opinion

ID: 9576085
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:20:41.712164+00
Date Added: 2024-06-11T12:50:22.842500
License: Public Domain

On Motion for Rehearing.
On motion for rehearing, the bank argues for the first time the provision at Code Ann. § 109A-4 — 301 (3), that “unless previous notice of dishonor has been sent an item is dishonored ... when... it is returned or notice sent in accordance with this section” (emphasis supplied). Bank cites Code Ann. § 109A-1 — 201 (38) as defining “send” to mean deposit in the mail; therefore, oral notice of dishonor from the Tennessee bank to the appellee bank would not trigger the point of dishonor.
The Georgia Commercial Code, at Code Ann. § 109A-3 — 508 (3) specifically provides that notice of dishonor may be given in any reasonable manner, and “may be oral or written.” It is neither logical nor credible that the legislature meant to defuse this provision, and to render meaningless the other Article 3 and 4 provisions dealing with discharge of indorser’s liability within specific time limits of presentment and non-acceptance (see Code Ann. § 109A-3 — 506, and this case), by providing that dishonor does not occur until written notice of it is “sent.” The terms of Code Ann. § 109A-1 — 201 (38) do not preclude the transmission of oral notice, “if it is received within the time at which it would have arrived if properly sent.” Nevertheless, the bank would not prevail, even if we adopted its position that since there was no written notice of dishonor “sent,” under Code Ann. § 109A-4 — 301 (3) dishonor should have occurred when the item was returned on November 3. If the item was not returned until November 3, it was because of the appellee bank’s entreaty to the Tennessee bank to keep holding it for acceptance. It is undisputed that the Tennessee bank would have returned it within three days of presentment if the appellee bank had not requested otherwise. See Phelan v. University Nat. Bank, 85 111. App. 2d 56 (229 *34NE2d 374, 378).
In this case, we emphasized that the indisputable fact remains that on September 29,1978, the appellee bank first received notice of dishonor but the indorser was not notified of this dishonor as required by Code Ann. § 109A-3 — 508. There was no term in the indorsement on this item allowing a stated time for re-presentment as provided for in Code Ann. § 109A-3 — 507 (4), and the appellee bank had no authority to re-present it without discharging the indorser. The appellee bank in instructing the Tennessee bank to hold the check, and in re-presenting it at a later date, did so at its own peril.
The bank by delaying the giving of notice of dishonor until November 3, 1978, did not give notice before its midnight deadline after receiving notice itself as required by law, and thereby prohibited the appellant from taking whatever action he might deem best to protect himself. The failure to give requisite notice results in the discharge of the indorser, Code Ann. § 109A-3 — 502 (1) (a). There still remains the question of fact as to whether Clements knew or had reason to know that the check ultimately would be dishonored and if so, notice of dishonor would be excused.

Motion for rehearing denied.