             IN THE COURT OF APPEALS OF TENNESSEE
                  AT JACKSON MAY 1999 SESSION

                                                         FILED
                                                           June 15, 1999

                                                         Cecil Crowson, Jr.
                                                        Appellate Court Clerk
CITY OF MEMPHIS                 )   SHELBY CIRCUIT
CREDIT UNION,                   )   (No.87890-3 T.D.)
                                )
      Plaintiff/Appellant           )
                                )
v.                              )   APPEAL NO. 02A01-9810-CV-00286
                                )
MARY HELEN                      )
MONTGOMERY,                     )
                                )
      Defendant/Appellee        )




      APPEAL FROM THE CIRCUIT COURT OF SHELBY COUNTY
                  AT MEMPHIS, TENNESSEE
          THE HONORABLE KAREN R. WILLIAMS, JUDGE



For the Appellant:
Roger A. Stone
Stone, Higgs & Drexler
200 Jefferson Ave., Ste. 1000
Memphis, TN 38103

For the Appellee:
Randall J. Fishman
James W. Curry
Ballin, Ballin & Fishman, P.C.
200 Jefferson Avenue, Suite 1250
Memphis, TN 38103




AFFIRMED                            WILLIAM H. INMAN, Senior Judge


CONCUR:

DAVID R. FARMER, JUDGE
ALAN E. HIGHERS, JUDGE

                                OPINION

      The plaintiff’s action to recover funds mistakenly paid to a depositor whose

name was similar to the purported owner of the funds was dismissed on motion for

summary judgment alleging the bar of the three-year statute of limitations. The

plaintiff appeals, insisting that the issue of when it reasonably should have

discovered its mistake involved a genuine dispute and that summary judgment was

inappropriate. Our review is de novo on the record, with no presumption of

correctness. Warren v. Estate of Kirk, 954 S.W.2d 723 (Tenn. 1997).

      In 1974, the defendant was married to Ralph Montgomery. She sold her

beauty salon for $3,600.00, and delivered the check to him with instructions to

deposit it with the Credit Union. He apparently failed to provide the Credit Union

with his wife’s social security number. Whether the funds were in fact deposited

is unclear. No documentation was executed.

      In 1984 or 1985 she opened an IRA account through her employer, an

insurance agency known as Milico, and executed the necessary documentation.

      In 1991, another customer of the plaintiff, whose name was Helen A.

Montgomery, entered the picture. She was residing on Chutt Road in Memphis,

and the plaintiff admittedly and mistakenly changed her address on its records to

141 CRIII, Walnut, Mississippi, where the defendant and her husband were

residing. Whereupon, the plaintiff began mailing quarterly statements of an IRA

opened by Helen A. Montgomery to 141 CRIII, Walnut, Mississippi. The

defendant testified that she believed these statements concerned the account her

husband opened for her in 1974 with the proceeds of the sale of her business, and




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that she failed to notice that the middle initial and social security number on the

statements were different from her own.

      On November 25, 1992, the defendant, in writing, requested the funds in the

IRA. The plaintiff supplied her with an appropriate form, which she executed.

Before mailing the form, the plaintiff wrote, “Helen A. Montgomery” in the space

provided to identify the owner of the account, together with a social security

number which the plaintiff believed had been assigned to Helen A. Montgomery.

      A check in the amount of $4,743.81 was issued by the plaintiff payable to

Helen A. Montgomery. The defendant, Mary Helen Montgomery, struck through

the middle initial, and endorsed the check “Helen Montgomery.”

      The plaintiff never questioned these events.

      On December 27, 1996, Helen A. Montgomery enquired of the plaintiff

about her IRA. Research ensued, which revealed that the funds had been paid to

Mary Helen Montgomery in 1991.

      The plaintiff thereupon searched its records extensively, and found nothing

to indicate that Ralph Montgomery had opened an account in 1974 in the name of

his wife, Mary Helen Montgomery.

      This action was commenced in February, 1997, to recover the funds paid to

Mary Helen Montgomery. The defendant’s motion for summary judgment alleging

the bar of the statute of limitations of three years was granted.

      Suits alleging conversion of funds must be commenced within three years

from the accrual of the cause of action. T.C.A. § 28--3-105(2). The date of accrual

is interpreted as the time when the plaintiff knew, or reasonably should have

known, that a cause of action existed. Stone v. Hinds, 541 S.W.2d 598 (Tenn. App.




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1976). The ignorance of the plaintiff or its failure to discover the facts will not toll

the statute. Vance v. Schulder, 547 S.W.2d 927 (Tenn. 1977).

      We think the plaintiff was put on enquiry notice, at the least, when its check

payable to Helen A. Montgomery was altered by striking the initial “A”, and

endorsed by a signature different from that of the payee. This occurred more than

three years before suit was filed, and the plaintiff took no action, investigative or

otherwise. Plaintiff argues that accepted banking practices did not require it to

compare the endorsement with the signature card, but this argument begs the

question. The alteration on the face of the check was a clear, unmistakable

indicator that something was amiss; superimposed is the fact that the endorsing

signature differed from the name of the payee.

       Summary judgment is appropriate in cases when no genuine issue of

dispositive fact exists. Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993). We agree that

summary judgment was properly granted. The judgment is affirmed at the costs

of the appellant.



                                         _______________________________
                                         William H. Inman, Senior Judge
CONCUR:



_______________________________
David R. Farmer, Judge



_______________________________
Alan E. Highers, Judge




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