Titus v. Commercial Bank, Douglasville, Ga.

• Decision Date: 16 September 1994
• Docket Number: No. A94A0931,A94A0931
• Citation: 448 S.E.2d 753,214 Ga.App. 657
• Parties: , 25 UCC Rep.Serv.2d 151 TITUS v. COMMERCIAL BANK, DOUGLASVILLE, GEORGIA.
• Court: Georgia Court of Appeals

Page 753

448 S.E.2d 753

214 Ga.App. 657, 25 UCC Rep.Serv.2d 151

TITUS v. COMMERCIAL BANK, DOUGLASVILLE, GEORGIA.

No. A94A0931.

Court of Appeals of Georgia.

Sept. 16, 1994.

Gibson, Deal & Fletcher, John W. Gibson, Norcross, for appellant.

Howe & Dettmering, W. O'Neal Dettmering, Jr., Douglasville, for appellee.

BIRDSONG, Presiding Judge.

Tammy Titus appeals from the grant of summary judgment to Commercial Bank, Douglasville, Georgia, on her claim against the bank for money deposited in her attorney's account. Titus sued the bank after her attorney Thomas A. Jenkins deposited a check made payable to Titus and the attorney in his trust account with the bank even though Titus did not endorse the check. Subsequently, the attorney absconded with the funds.

The record shows Titus, pursuant to a contingency fee agreement, retained Jenkins to represent her in a tort claim. The record, however, does not show that the bank had any knowledge of this. The agreement specified the fee that Jenkins would charge and also covered the usual matters such as Titus' obligation to pay for costs and expenses. Further, although the contingency fee agreement with Jenkins initially contained a provision giving him authority to endorse and deposit checks made out to Titus in his trust account, Titus struck this provision from the agreement. Later, Jenkins settled the claim without Titus' approval and received a check from the other parties' liability carrier made payable to Titus and Jenkins. Jenkins deposited this check in his trust account with the bank after apparently having endorsed the check in handwriting as follows: "Tammy Titus [some illegible notation], P.O. Box 44446 Atl. GA 30 [illegible numbers], Thomas A. Jenkins."

At some point Jenkins withdrew the funds from the bank and did not pay Titus. After learning of this, Titus sued the alleged tortfeasors, but the court held that the settlement agreement negotiated by Jenkins on behalf of Titus was enforceable against her. Thereafter, Titus made a demand upon the bank, and the bank denied liability. Titus then sued the bank under OCGA § 11-3-419 seeking payment of the full amount of the check, interest from the date of her demand, expenses of litigation, and attorney fees. Ultimately, the trial court granted the bank's motion for summary judgment based upon an attorney's inherent authority to endorse checks made payable to a client and deposit those checks in the attorney's trust account. The only issue on appeal is whether the trial court correctly ruled that Titus could not recover from the bank. Held:

Although this case concerns a check that was not endorsed by one of the payees, this is not a case involving a forged endorsement. " ' "As a general rule an attorney can endorse his client's name to negotiable instruments payable to the order of his client only when he has been expressly authorized to do so.... However, the power to make an endorsement has been implied where it is a mere matter of form to enable the attorney to effect the purpose for which he was employed by the client...." Moreover, an attorney having an interest in the collection in the nature of a commission for services in effectuating the collection,...