The Citizens and Southern National Bank v. American Surety Company of New York

WISDOM, Circuit Judge:

This diversity case raises a small, slippery question of Georgia law concerning the relative rights of two banks, both hoodwinked by a forger who used an innocent depositor’s checking account as a conduit for fraud. The district court awarded summary judgment to the plaintiff, American Surety Company, insurer of the bank that paid over the first forgery, shifting the loss to the defendant, Citizens and Southern National Bank, which paid over the second forgery. We affirm.

I

An unknown miscreant forged the signature of D. D. Dominey, president of Mortgage Investments, Inc.…