First National Bank & Trust Co. v. Georgia Railroad Bank & Trust Co.

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,…