Paul L. Donmoyer, d/b/a Paul’s Place in Columbus, Georgia, carried on his banking business with Columbus Bank & Trust Co. On September 8, 1977, an employee of the bank was presented with a notice of delinquency issued by the Georgia Department of Revenue by one of its field service representatives. Erroneously believing that she had been handed a fi. fa. in lieu of the notice of delinquency, this employee debited two checking accounts of Mr. Donmoyer’s and paid off the notice of *39delinquency in the amount of $1,090.52, shown as the amount of the deficiency of the Georgia sales and use tax covering the taxable period from April 1, 1977 through June 30, 1977. She debited Donmoyer’s two accounts accordingly, that is, account number 17-55-702 for $490.23 and account number 37-74-074 in the amount of $629.79. She then notified Donmoyer the same day by letter dated September 8, 1977, that she had debited the accounts as shown above. During the period from September 8 through at least February, 1978, approximately 100 of Donmoyer’s checks were returned due to insufficient funds and various service charges were charged against his account by the bank.
Donmoyer brought the suit against the bank seeking compensatory and punitive damages, alleging first that the bank was not authorized to transfer any money to the State Revenue Department on his behalf; that (despite Donmoyer’s having had notice of the unauthorized payout from his account) the bank was obliged to honor any checks that he made pay to the order of any person or persons up to the full amount of the money deposited with the bank; and that the bank wrongfully dishonored certain checks and charged certain penalties against his account, resulting in specifically alleged damages. By alternative pleadings, Donmoyer alleged that the bank had converted money belonging to him to its own use, which was improper, without justification and with malice. By several amendments his complaint alleges the loss of his business by reason of his cash flow problems, eviction by the landlord and averments of malice on the part of the bank with conscious indifference to the consequences, thereby increasing the amount of compensatory and punitive damages sought.
Defendant bank answered, admitting jurisdiction and the existence of the two checking accounts. It also alleged that as a result of its prompt payment in response to the notice of delinquency it reduced Donmoyer’s liability to the Department of Revenue and obtained release of Donmoyer’s accounts which would not have been possible if the bank had frozen Donmoyer’s account upon receipt of the notice of delinquency as required by statutory law, all to the benefit of Donmoyer. It also *40pleaded defenses of assumption of risk by reason of the fact that Donmoyer continued to write checks after undisputed notice that funds were not available due to the debiting of his account, that he wrote checks for amounts which exceeded the amount by which his accounts had been debited; and, thus any damages to him were solely and proximately caused by his own actions and business practices.
After discovery plaintiff moved for summary judgment on the issue of liability, and the defendant moved for summary judgment in its favor. Donmoyer’s motion for summary judgment was denied, and the bank’s motion was granted. This appeal followed. Held:
The central issue in this case is whether the appellant Donmoyer has been harmed by the release of funds to the state in response to notice of delinquency filed by the State Revenue Department. Donmoyer has never denied that the sales tax was due the state. He simply argues that the sales tax money which was in his account should not have been released to the state without his consent. The evidence offered by the agent for the State Revenue Department unequivocally shows that whether the money was paid immediately or frozen for thirty days, the money never belonged to Donmoyer at all but always was the property of the state. His testimony indicated that Donmoyer was nothing more than the collection agent for the state, and thus, by implication that Donmoyer mingled state money with his own. His testimony leads to the conclusion that absent some satisfactory arrangement between the state and Donmoyer, the bank was obligated to surrender the amount of sales tax either immediately or at the end of thirty days. Thus, though the bank wrongfully surrendered the funds immediately upon the basis of the notice of delinquency, its good faith is manifest in view of the fact that Donmoyer owed the tax to the state and never made other arrangements to satisy his tax liability.
The legislative intent with regard to a bank’s liability for wrongful treatment of funds is clearly shown in Code § 109A-4 — 403. Though that section deals with wrongful dishonor of items presented for payment, it manifests the intent to make a bank liable for damages *41proximately caused by its wrongful handling of an item. When a bank makes wrongful payment upon an unauthorized signature, the depositor has an obligation to exercise reasonable care to rectify the situation and minimize the damage done. If the depositor fails in his own obligations once he has notice of a payment on an unauthorized signature, he is precluded from recovery against the bank (Code Ann. § 109A-4 — 406).
While Code Ann. §§ 109A-4 — 402 and 109A-4 — 406 admittedly deal with wrongful dishonor of items and payment on unauthorized signatures, these are wrongful treatments of depositors’ funds which are indistinguishable in principle and effect from the wrongful treatment of Donmoyer’s account by the defendant bank. The underlying legislative intent should remain consistent that the bank is liable for damages proximately caused by its wrongful treatment, and that the depositor has the obligation to exercise reasonable care to diminish the loss.
Donmoyer’s claim was based upon damages caused by the refusal by the bank to honor Donmoyer’s checks because of insufficient funds and upon an alleged unlawful conversion of funds from his checking account. At the same breath, Donmoyer admits that the bank notified him that it had released $1,092.52 to the State Revenue Department on the same date that the money was released, to wit: September 8, 1977. In spite of his ¿wareness that the bank had reduced the amount of money in his account by over $1,000, Donmoyer continued to do business as usual at least until February, 1978. During the period from September 8, 1977 until February, 1978, Donmoyer continued to place money in the checking account and wrote in excess of 500 checks, of which approximately 100 were returned for insufficient funds. There is no evidence showing that Donmoyer sought to reverse the action of the bank so as to make the tax funds available for purposes of meeting his personal checks or to make arrangements with his creditors to delay or spread out the payment schedules to accommodate the reduction of the checking account. Moreover, the trial court had evidence before it that had the bank acted properly upon the notice of delinquency *42by freezing Donmoyer’s account for thirty days, as it was legally required to do (Code Ann. § 92-3423a), Donmoyer would have suffered many more returned checks in the first thirty days. In fact, had the account been frozen, any checks Donmoyer had then outstanding, or any checks he wrote during the thirty days, would have been dishonored — rightfully. Once he received notice of the wrongful payment from his account he was obliged to use reasonable care to minimize and avoid future loss.
Argued January 8, 1979 Decided July 16, 1979 Rehearing denied July 30, 1979. Kenneth S. Stepp, for appellant. Page, Scrantom, Harris, McGlamry & Chapman, John T. Laney, III, for appellee.We conclude that the evidence shows without dispute that Donmoyer suffered no damages through the actions of the bank. Any embarrassment either personal or economic suffered by Donmoyer was caused by his own poor business activities.
The court was warranted in finding in effect that the bank minimized Donmoyer’s difficulties by paying the tax deficiency and thus releasing Donmoyer’s account for continued activities. The trial court thus was warranted in finding no issue of fact concerning damages. The consequential damages shown by Donmoyer were all directly and solely related to Donmoyer’s demonstrated lack of business responsibility. Donmoyer does not argue the conversion count with any sincerity and rightfully so in view of the fact that the $1,092.52 was property of the state. The trial court did not err in the grant of summary judgment to the bank.
Judgment affirmed.
Deen, C. J., Quillian, P. J., Shulman, Banke and Underwood, JJ., concur. McMurray, P. J., Smith and Carley, JJ., dissent.