First National Bank & Trust Co. v. Georgia Railroad Bank & Trust Co. , 238 Ga. 693 ( 1977 )

238 Ga. 693 (1977) 235 S.E.2d 1

FIRST NATIONAL BANK & TRUST COMPANY OF AUGUSTA
v.
GEORGIA RAILROAD BANK & TRUST COMPANY et al.

31784.

Supreme Court of Georgia.

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.

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.

The Court of Appeals was correct in holding First National, the payor bank, responsible under 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.