2020 Georgia Code
Title 11 - Commercial Code
Article 3 - Negotiable Instruments
Part 1 - General Provisions and Definitions
§ 11-3-103. Definitions

1. In this article:
   1. "Acceptor" means a drawee who has accepted a draft.
   2. "Drawee" means a person ordered in a draft to make payment.
   3. "Drawer" means a person who signs or is identified in a draft as a person ordering payment.
   4. Reserved.
   5. "Maker" means a person who signs or is identified in a note as a person undertaking to pay.
   6. "Order" means a written instruction to pay money signed by the person giving the instruction. The instruction may be addressed to any person, including the person giving the instruction, or to one or more persons jointly or in the alternative but not in succession. An authorization to pay is not an order unless the person authorized to pay is also instructed to pay.
   7. "Ordinary care" in the case of a person engaged in business means observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged. In the case of a bank that takes an instrument for processing for collection or payment by automated means, reasonable commercial standards do not require the bank to examine the instrument if the failure to examine does not violate the bank's prescribed procedures and the bank's procedures do not vary unreasonably from general banking usage not disapproved by this article or Article 4 of this title.
   8. "Party" means a party to an instrument.
   9. "Promise" means a written undertaking to pay money signed by the person undertaking to pay. An acknowledgment of an obligation by the obligor is not a promise unless the obligor also undertakes to pay the obligation.
   10. "Prove" with respect to a fact means to meet the burden of establishing the fact within the meaning of Code Section 11-1-201(b)(8).
   11. "Remitter" means a person who purchases an instrument from its issuer if the instrument is payable to an identified person other than the purchaser.
2. Other definitions applying to this article and the Code sections in which they appear are:

   "Acceptance." Code Section 11-3-409.

   "Accommodated party." Code Section 11-3-419.

   "Accommodation party." Code Section 11-3-419.

   "Alteration." Code Section 11-3-407.

   "Anomalous indorsement." Code Section 11-3-205.

   "Blank indorsement." Code Section 11-3-205.

   "Cashier's check." Code Section 11-3-104.

   "Certificate of deposit." Code Section 11-3-104.

   "Certified check." Code Section 11-3-409.

   "Check." Code Section 11-3-104.

   "Consideration." Code Section 11-3-303.

   "Draft." Code Section 11-3-104.

   "Holder in due course." Code Section 11-3-302.

   "Incomplete instrument." Code Section 11-3-115.

   "Indorsement." Code Section 11-3-204.

   "Indorser." Code Section 11-3-204.

   "Instrument." Code Section 11-3-104.

   "Issue." Code Section 11-3-105.

   "Issuer." Code Section 11-3-105.

   "Negotiable instrument." Code Section 11-3-104.

   "Negotiation." Code Section 11-3-201.

   "Note." Code Section 11-3-104.

   "Payable at a definite time." Code Section 11-3-108.

   "Payable on demand." Code Section 11-3-108.

   "Payable to bearer." Code Section 11-3-109.

   "Payable to order." Code Section 11-3-109.

   "Payment." Code Section 11-3-602.

   "Person entitled to enforce." Code Section 11-3-301.

   "Presentment." Code Section 11-3-501.

   "Reacquisition." Code Section 11-3-207.

   "Special indorsement." Code Section 11-3-205.

   "Teller's check." Code Section 11-3-104.

   "Transfer of instrument." Code Section 11-3-203.

   "Traveler's check." Code Section 11-3-104.

   "Value." Code Section 11-3-303.

3. The following definitions in other articles apply to this article:

   "Bank." Code Section 11-4-105.

   "Banking day." Code Section 11-4-104.

   "Clearing house." Code Section 11-4-104.

   "Collecting bank." Code Section 11-4-105.

   "Depositary bank." Code Section 11-4-105.

   "Documentary draft." Code Section 11-4-104.

   "Intermediary bank." Code Section 11-4-105.

   "Item." Code Section 11-4-104.

   "Payor bank." Code Section 11-4-105.

   "Suspends payments." Code Section 11-4-104.

4. In addition, Article 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this article.

(Code 1981, §11-3-103, enacted by Ga. L. 1996, p. 1306, § 3; Ga. L. 2015, p. 996, § 3B-11/SB 65.)

The 2015 amendment, effective January 1, 2016, substituted "Reserved" for " 'Good faith' means honesty in fact and the observance of reasonable commercial standards of fair dealing" in paragraph (a)(4); and substituted "within the meaning of Code Section 11-1-201(b)(8)" for "as 'burden of establishing' is defined in subsection (8) of Code Section 11-1-201" in paragraph (a)(10).

- Ga. L. 2015, p. 996, § 1-1/SB 65, not codified by the General Assembly, provides: "(a) This Act shall be known and may be cited as the 'Debtor-Creditor Uniform Law Modernization Act of 2015.'

"(b) To promote consistency among the states, it is the intent of the General Assembly to modernize certain existing uniform laws promulgated by the Uniform Law Commission affecting debtor and creditor rights, responsibilities, and relationships and other federally recognized laws affecting such rights, responsibilities, and relationships."

- For annual survey of law of business associations, see 56 Mercer L. Rev. 77 (2004).

The collecting bank is merely an agent of the drawer of a draft. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983) (decided under former Code Section11-3-120).

The 1996 amendments of the UCC definitions of "good faith" and "holder in due course" (O.C.G.A. §§ 11-3-102 and11-3-103) did not apply retroactively to transactions before their effective date; rather, the definitions in O.C.G.A. §§ 11-2-201 and11-3-302 (former version) applied. Choo Choo Tire Serv., Inc v. Union Planters Nat'l Bank, 231 Ga. App. 346, 498 S.E.2d 799 (1998).

- Where a fact question remained as to whether a bank accused of negligently accepting stolen checks for deposit and conversion acted in good faith in receiving forged checks, it could not achieve status as a holder in due course. Gerber & Gerber, P.C. v. Regions Bank, 266 Ga. App. 8, 596 S.E.2d 174 (2004).

- On plaintiff commercial checking account customer's suit against defendant, its employee embezzler's depository bank, alleging the embezzler deposited checks made payable to the embezzler into the embezzler's personal account, because those checks contained no indications of forgery, and because the evidence indicated, at most, that the depository bank may have been negligent due to the fact that the bank's screening system failed to detect the forgery scheme, but it did not indicate that the bank acted in an unfair or dishonest manner, and nothing showed that the bank's failure to investigate the embezzler's account activity was dishonest or unfair, and thus was not honest in fact or did not conform to reasonable commercial standards of fair dealing in accepting the checks, the checking account customer could not prevail in showing a lack of good faith under O.C.G.A. §§ 11-3-103(a)(4) and11-3-302(a)(2)(ii). Ownbey Enters. v. Wachovia Bank, N.A., 457 F. Supp. 2d 1341 (N.D. Ga. 2006).

Cited in Stebbins v. Ga. Power Co., 252 Ga. App. 261, 555 S.E.2d 906 (2001); Consumer Solutions Fin. Servs. v. Heritage Bank, 300 Ga. App. 272, 684 S.E.2d 682 (2009); Burrowes v. Bank of Am., N.A., 340 Ga. App. 248, 797 S.E.2d 493 (2017).

RESEARCH REFERENCES

Am. Jur. 2d.

- 11 Am. Jur. 2d, Bills and Notes, §§ 13, 71, 90, 185. 12 Am. Jur 2d, Bills and Notes, §§ 451, 460.

- 82 C.J.S., Statutes, § 309.

- Uniform Commercial Code (U.L.A.) § 3-103.

- Writing on the margin or on the back of a bill or a note at the time of its execution as a part thereof, 13 A.L.R. 251; 155 A.L.R. 218.