Jerry O. Peavy, Jr., who did not have a bank account of his own, received a

draft from CNL Insurance America in the amount of $5,323.60. The draft was

drawn on CNL’s account at Bank South, N.A., and was “payable to the order

of Jerry Peavy and Trust Company Bank.” Jerry O. Peavy, Sr., allowed his son

Peavy, Jr., to deposit the draft in his account at Bank South, N.A. Bank South

accepted the draft and deposited it on December 29, 1992, with only the

signature of Jerry Peavy, Jr. Both Mr. and Mrs. Peavy, Sr., then wrote checks on

the amount of the draft using the full amount to benefit their son.

Chapter 29 Transfers of Negotiable Instruments and Warranties of Parties 659

On March 30, 1993, Bank South realized that it had improperly deposited

the draft because it was lacking an indorsement from Trust Company Bank and

reversed the transaction by debiting Mr. and Mrs. Peavy’s account for the full

amount of the draft. A bank officer then called Mr. and Mrs. Peavy, told them

what had happened with the draft, and “threatened to send them to jail if they

did not immediately deposit the sum of $5,323.60.” The Peavys deposited that

amount from the sale of some stock they owned and then filed suit against

Bank South for its conversion of their son’s draft and funds. Do the Peavys have

a case? [Peavy v Bank South, 474 SE2d 690 (Ga App)]

AppendixLO1