You have asked for my advice on whether a magistrate judge may issue an arrest warrant for a person charged with the offense of deposit account fraud, O.C.G.A. § 16-9-20, to a company in the business of collecting worthless checks for merchants, based on the affidavit of a person working for that company.

A magistrate judge has the jurisdiction and authority to issue an arrest warrant, based on the information of others given to him under oath, for a person alleged to have violated O.C.G.A. § 16-9-20 (deposit account fraud). See O.C.G.A. §§ 15-10-2(1) and 17-4-40. Further, it is settled that any private citizen may procure an arrest warrant. Cleland v. United States Fidelity & Guar. Ins. Co., 99 Ga. App. 130, 132 (1959); 1983 Op. Att'y Gen. U83-70, p. 317.

Subsection (k) of O.C.G.A. § 16-9-20, dealing with the offense of deposit account fraud, states: "An action under this Code section may be prosecuted by the party initially receiving a

worthless instrument or by any subsequent holder in due course of any such worthless instrument." You have questioned whether a company in the business of collecting worthless checks for merchants may procure an arrest warrant in its "own name" since such a company could not be considered a "holder in due course," as defined in Georgia's Commercial Code, because it takes the checks knowing they have been dishonored. See O.C.G.A. § 11-3-302.

The Court of Appeals recently interpreted O.C.G.A. § 16-9-20(k) and held that the term "holder," as defined in the Commercial Code, does not apply to that criminal statute. Calhoon v. Mr. Locksmith Co., 200 Ga. App. 618, 620 (1991). Specifically, the Court stated:

In construing the term "holder" in OCGA § 16-9-20, we are governed by established principles of statutory interpretation, including the cardinal imperative to look diligently for the intention of the legislature, keeping in view at all times both the "evil" and the "remedy." OCGA § 1-3-1(a). It is obvious that, among other purposes, OCGA § 16-9-20 was enacted to punish the criminal behavior of knowingly passing bad checks, and to protect those legally authorized to negotiate checks given for value. Black's Law Dictionary (5th ed., p. 658) defines a "holder" as "the person who has legally acquired possession of [a negotiable instrument] by indorsement or delivery, and who is entitled to receive payment of the instrument." Given the obvious purpose of OCGA § 16-9-20, and applying the principle of statutory construction embodied in OCGA § 1-3-1(b) that "[i]n all interpretations of statutes, the ordinary signification shall be applied to all words," we find that under the circumstances presented here, appellee was the "holder" of the check for purposes of OCGA § 16-9-20 and thus was entitled to prosecute appellant.

Calhoon, 200 Ga. App. at 620.

Although O.C.G.A. § 16-9-20(k) uses the term "holder in due course," and that statute has not changed since it was enacted in 1988 (1988 Ga. Laws 762), the Court in Calhoon focused on the term "holder" and did not address the term "holder in due course." Yet, based on the reasoning and express finding of legislative intent in Calhoon, it appears that the term "holder in due course," as used in the Commercial Code (O.C.G.A. §§ 11-3-102, -302), would not apply to O.C.G.A. § 16-9-20.

However, whether a company that collects worthless checks for merchants could procure an arrest warrant in its "own name," based on the affidavit of a person working for that company, depends on the nature of the legal relationship between the merchant and the company, and the magistrate judge deciding whether to issue the warrant must first determine the nature of the legal relationship between the merchant and the company (e.g., seller/purchaser, assignor/assignee, principal/agent) before deciding whether the company can obtain an arrest warrant in its own name.

Where the collection company legally acquires possession of the instruments from the merchant and is entitled to receive payment of the instruments, Calhoon appears to authorize the company to procure an arrest warrant in its own name and to prosecute a person who commits the offense of deposit account fraud. 200 Ga. App. at 620. On the other hand, where the collection company merely acts as an agent for the merchant, the agent/company would need express authorization from the principal/merchant in order to obtain an arrest warrant and prosecute a person who commits the offense of deposit account fraud. See O.C.G.A. §§ 10-6-1, -5, -80; J.C. Penney Co. v. Green, 108 Ga. App. 155 (1963); Progressive Life Ins. Co. v. Doster, 98 Ga. App. 641 (1958); Auld v. Colonial Stores, Inc., 76 Ga. App. 329 (1947).

Accordingly, it is my unofficial opinion that a magistrate judge may issue an arrest warrant for someone charged with the offense of deposit account fraud, O.C.G.A. § 16-9-20, based on the affidavit of a person working for a company in the business of collecting worthless checks for merchants, provided that the collection company has legally acquired possession, and is entitled to receive payment, of the instruments, or that the company is an agent with express authorization from its principal.

Prepared by:

MATTHEW P. STONE
Assistant Attorney General