Hamby v. Crisp

172 S.E. 842, 48 Ga. App. 418, 1934 Ga. App. LEXIS 91
CourtCourt of Appeals of Georgia
DecidedFebruary 5, 1934
Docket23272
StatusPublished
Cited by16 cases

This text of 172 S.E. 842 (Hamby v. Crisp) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hamby v. Crisp, 172 S.E. 842, 48 Ga. App. 418, 1934 Ga. App. LEXIS 91 (Ga. Ct. App. 1934).

Opinion

Jenkins, P. J.

1. The notes sued on having been executed, and the alleged alteration having been done, prior to the enactment of the uniform negotiable-instruments law of August 18, 1924, the questions presented are to be determined by the law as it was prior to that date.

2. Where one signs his name on the back of a promissory note merely as an accommodation indorser, and has not undertaken as a "technical indorser” to assign the instrument to another, his status being that of a surety (Civil Code of 1910, § 3541), not only must the language on the face of the instrument expressly [419]*419indicate that it is a sealed instrument, but the signature of such indorser must be accompanied by a seal, scrawl, or other mark intended as a seal (Civil Code, § 5), such as the letters “L. S.,” in order to render the obligations of such an indorser an instrument under seal. Civil Code, § 4359; Ridley v. Hightower, 112 Ga. 476, 478 (37 S. E. 733); Cooper v. Dixie Cotton Co., 144 Ga. 33 (86 S. E. 242); Latham v. Kolb, 76 Ga. 291, 293; Brooks v. Kiser, 69 Ga. 762; Wilhelms v. Partoine, 72 Ga. 898; Lanier v. Berry, 41 Ga. App. 34, 36, (151 S. E. 821); Thompson v. Bank of Buckhead, 45 Ga. App. 94 (163 S. E. 255); Marbut v. Hamilton, 32 Ga. App. 187 (122 S. E. 738); Mitchell v. Graham, 27 Ga. App. 60 (107 S. E. 373). With regard to the rule as to “technical indorsers,” see Baldwin Fertilizer Co. v. Carmichael, 116 Ga. 762, 764 (42 S. E. 1002); Milledge v. Gardner, 29 Ga. 700. Where language in the face of a promissory note recites that it is a sealed instrument, and the signature of an accommodation indorser on the back of the note is accompanied by a seal or its equivalent, it is unnecessary for an additional recital to appear on the back of the note above the signature of such indorser that his obligation is one under seal, in order to render it such. This is for the reason that his indorsement under seal accepts and binds him, as a surety, upon the contract of the maker on the face of the paper, which includes the recitals above the signature of the maker.

3. “Actions upon bonds or other instruments under seal- shall be brought within twenty years after the right of action accrues.” Civil Code, § 4359. Actions upon promissory notes not under seal must be brought within six years after the same become due and payable. Civil Code, § 4361.

4. Under the preceding rulings, where the face of a promissory note contained the recital that it was given “ under the hand and seal of each party,” and the note was signed by the maker on its face with the letters “L. S.” following his signature, and by three accommodation indorsers on the back with the letters “L. S.” following their signatures, the note was a sealed obligation both as to the indorsers and the maker, without the necessity, as to the indorsers, of repeating on the back of the note, above their signatures, that it was executed under their seals. Accordingly, on the general grounds of the motion for new trial by the accommodation indorsers, after a judgment against them in favor of the plaintiff [420]*420payee, in an action brought on the note eight years after its maturity, the court did not err in denying a new trial to such indorsers upon the contention, under their plea of the statute of limitations, that the instrument was not, as to them, a specialty because it was not recited on the back of the note above their signatures that their obligation was under seal. For the same reason, the 4th special ground of the motion for a new trial is without merit, the instruction complained of having correctly stated the law as to what constitutes sealed instruments and as to their period of limitation.

5. The change of a promissory note from an instrument not under seal to one under seal, thus extending the period of limitations from six to twenty years, is a material alteration. Where the face of the instrument recites that it is a sealed obligation, but a seal or its equivelent is omitted from the signature of an accommodation indorser on the back,'the addition of a seal or- its equivalent following such signature after the execution and without the consent of the indorser constitutes a material alteration of his contract.

6. “If a party makes a contract in such a manner as is authorized by law, he has a right to object to being bound by any other.” Simons v. McDowell, 125 Ga. 203 (53 S. E. 1031). This elementary general rule has particular application to material changes in contractual obligations of sureties when made without their consent, and -their liability is thereby extinguished. Civil Code, § 3543. By statute, existing before and since the enactment of the negotiable-instruments law in 1924, “an accommodation indorser is considered merely as a surety.” Civil Code, § 3541. A material change in the contract of an accommodation indorser, without his express or implied consent, will defeat an action against him by the payee or holder of a promissory nóte, seeking to recover upon the paper in its altered condition, even though it does not appear by whom the alteration is made. Simons v. McDowell, supra; Hill v. O’Neill, 101 Ga. 832, 834-837 (28 S. E. 996); Washington Loan & Bkg. Co. v. Holliday, 26 Ga. App. 792, 794-796 (107 S. E. 370). Thus, under the law in force at the time of the execution of the note here involved, the provisions of section 4296 of the Civil Code, that the alteration must have been “intentional” and “by a person claiming a benefit under” the contract, that “if the alteration be unintentional . . or not with intent to defraud, if the contract as originally executed can be [421]*421discovered and is still capable of execution, it will be enforced by the court,” and that “if the alteration be made by a stranger, and not at the instance or by collusion of a party or privy, if the original words can still be restored, the, contract will be enforced,” did not apply to alterations in the contracts of accommodation indorsers or sureties upon promissory notes or other contracts of suretyship. The rule as to alterations in these contracts, under the old law, was apparently the same as exists under the present negotiable-instruments law. See Michie’s Code, § 4294(124, 125); Broughton v. West, 8 Ga. 248; Cook v. Barks, 46 Ga. App. 749 (169 S. E. 208); Beutel’s Brannan’s Neg. Inst. Law, 938, 954. But irrespective of whether or not a material alteration in the contract of an indorser would render his obligation wholly void and extinguish all of his liability, or would result merely in permitting the holder of the instrument to sue upon the original obligation if it can be restored, the latter rule would not aid the plaintiff payee of the note in the instant case — if the alleged alteration by adding “L. S.” after the signatures of the indorsers was in fact made; since the restoration of the original contract would leave it only an unsealed instrument, upon which an action would be barred after six years, so that, the suit not having been brought until eight years after maturity of the note, the defendants’ plea of the statute of limitations would be sustained.

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Bluebook (online)
172 S.E. 842, 48 Ga. App. 418, 1934 Ga. App. LEXIS 91, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hamby-v-crisp-gactapp-1934.