Court Opinion

ID: 9584469
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:48:37.852636+00
Date Added: 2024-06-11T15:07:55.640759
License: Public Domain

On Motion for Rehearing.
On motion for rehearing by the FDIC we are cited cases which have been previously considered and found to be inapposite and not controlling. These cases hold that a bank may become a holder of a check issued by or drawn on another bank. As stated in Pazol v. Citizens Nat. Bank of Sandy Springs, 110 Ga. App. 319, 320 (138 SE2d 442), where a bank credits to the deposit of its customer a check drawn on another bank and where the depositor withdraws substantially the entire proceeds of such check before the bank has notice of any infirmity, then the bank has given value and becomes a holder in due course of the check. See Tidwell v. Bank of Tifton, 115 Ga. App. 555 (155 SE2d 451); Bob’s Radio Service, Inc. v. F. P. Plaza, Inc., 125 Ga. App. 133, 134 (186 SE2d 552). In the case sub judice, unlike the other cases, the bank on which the checks are issued is claiming the status of a holder in due course.
It is contended that the authority we have cited is outdated since it was prior to the adoption of the Uniform Commercial Code. The assertion that the U. C. C. definition of holder is a departure from that of the Uniform Negotiable Instruments Law is refuted by the Official Code Comment § 1-201:1 (20) which describes the definitions as "similar.”
Under the facts, it strains credulity to argue that a finding is demanded that the bank was a holder in due course of negotiable instruments, and is entitled to foreclose all defenses including thé fact as to the actual identity of its depositor. Here the drawee bank was acting under a signature card which showed its depositor to be "Davidson-Sarasota” signed by "A. Davidson West, Pres.” *350By paying checks signed by an individual (without the designation "Pres.”) it was acting contrary to the express agreement. Moreover, although it could under Code Ann. § 109A-4 — 401 (1) (Ga. L. 1962, pp. 156, 303), pay checks even though the charge created an overdraft, it was not required to do so. The bank chose to pay the overdrafts, thus in effect loaning money to its depositor. The single question remaining is to whom did it make such loan?
Since the FDIC, acting for the bank, has chosen to assert by parol evidence that the deposit agreement was not between it and a corporate customer but instead an individual, we adhere to our ruling that the customer is not barred by provisions of the UCC from offering parol evidence with regard to the account on which the checks were drawn and the capacity in which they were executed.

Motion for rehearing denied.