Loewenherz v. Weil

127 S.E. 883, 33 Ga. App. 760, 1925 Ga. App. LEXIS 715

• Court: Court of Appeals of Georgia
• Decided: April 17, 1925
• Docket: 16046
• Status: Published

Opinion

Bell, J.

(After stating the foregoing facts.)

There is no contention by the plaintiffs in error that the contract should not be considered and the rights of the parties determined under the laws of this State. Their counsel having dealt with the case as one involving a Georgia, and not a New York, contract, we will dispose of it in this opinion, upon the assumption that the writings should be considered as composing a Georgia contract. The result, however, would probably be the same in either view. Harris v. Powers, 129 Ga. 74 (2) (58 S. E. 1038, 12 Ann. Cas. 475); Bailey v. Devine, 123 Ga. 653 (51 S. E. 603, 107 Am. St. Rep. 153).

Although the notes bore a date different from that of the instrument attached to the petition as “Exhibit B,” they were not effective as a contract until delivery; and the petition having alleged that the notes and the other instrument were delivered simultaneously, as part and parcel of one and the same transaction, they will all be considered as. together constituting but one contract. Montgomery v. Hunt, 93 Ga. 438 (2) (21 S. E. 59); Adams v. Hatfield, 17 Ga. App. 680 (2) (87 S. E. 1099); Horne v. Evans, 31 Ga. App. 370 (2) (120 S. E. 787).

It affirmatively appears that the plaintiff is seeking to hold the defendants (meaning, of course, the only two who are excepting) liable as sureties, and also that the debt of their alleged principal was existing at the time of the execution of the writings'. We do not question the proposition that a promise to pay a preexisting debt of another, without any detriment or inconvenience to the creditor or any benefit to either the promisor or the debtor in consequence of the undertaking, is a mere nudum pactum and void. Saul v. Southern Seating Co., 6 Ga. App. 843 (65 S. E. 1065); Foote v. Reece, 17 Ga. App. 799 (88 S. E. 689).

The notes are not under seal, but recite a valuable consideration. We will first deal with the case, however, as if we had before us an agreement disclosing nothing as to the consideration except what may be contained in the simultaneous writing. There is no difficulty, upon a casual reading of that instrument, in discerning that the defendants were desirous of obtaining air indulgence by the plaintiff to the' defendant in the New York judgment as to the payment of the amount therein recovered.' This is true although the instrument referred to, in so far as it affects the terms of the contract, merely provides for the acceleration of the maturity of the notes in the event of default in the payment of any of the series, and purports, by the language immediately following the words “Now, therefore,” to show its own consideration separately from that of the notes. •

Mere forbearance by the plaintiff to prosecute the judgment, without even so much as a request therefor, would not have afforded a consideration for the promise of the defendants to be liable as sureties. But undoubtedly, if they nought and also obtained an agreement for the grant of it, the execution of the notes signed by them as sureties in consideration thereof would be binding upon them. Civil Code (1910), § 3538; Watkins Medical Co. v. Marbach, 20 Ga. App. 691 (1) (93 S. E. 270); Broughton v. Joseph Lazarus Co., 13 Ga. App 153 (1) (78 S. E. 1024).

That the defendants requested the indulgence, we think, is perfectly clear from the writings.

But it is contended for the plaintiffs in error that there was no mutuality of obligation between the parties, in that the plaintiff did not sign any of the writings and did not at any time obligate himself to grant the extension or indulgence, and that if this bo true, he can not claim a liability against the defendants merely because he may for a period of time have refrained from proceeding to enforce his judgment in the State in which it was rendered or from.suing upon it elsewhere. It was said in Brown v. Bowman, 119 Ga. 153 (46 S. E. 410), that the tést of mutuality is to be applied not as.of the time when the promises are made, but as of the time when one or the other is sought to be enforced; and that a promise may be unenforceable for want of mutuality -when'made, and -yet the. promisee may render it valid and binding-by- supplying a consideration on his part before the promise is- withdrawn. It was accordingly held in Peeples v. Citizens National Life Ins. Co., 11 Ga. App. 177 (74 S. E. 1034), that a promise, though a mere nudum pactum when made, and consequently unenforceable against the promisor at that time, may become binding, if the other party furnishes the consideration contemplated, by doing what lie was expected to do.

“Thus where one promises to see another paid if he wilL sell goods to a third person, or promises to give a certain sum if another will deliver up certain documents or securities, or if lie xuill forbear a demand or suspend legal proceedings or the lilce, while the party making the promise is bound to nothing and- may withdraw his promise, or more accurately speaking, proposition, at any time, yet if the promisee, acting on the faith of the promise, within a reasonable time, does the thing which it was contemplated he should do, then the promisor is bound on the ground that the thing done is a sufficient and completed consideration ; and the original promise to do something if the other party would do something is a continuing promise until that other party does the thing required of him. Or if the promisee begins to do the thing in a way which binds him to complete it, here also is a mutuality of obligation.” (Italics ours.) Morrow v. Southern Express Co., 101 Ga. 810, 812 (28 S. E. 998).

We do not think, however, that it is necessary to determine whether, under the authorities cited, the plaintiff could have supplied the consideration by a mere indulgence to the defendants’ debtor, in compliance with the defendants’ request therefor, unless he had become obligated to do so by contract. In other words, for the purposes of the'instant case, we will assume, without deciding, that the mere extending of the time for payment, as requested, without a binding obligation on the plaintiff’s part to do so, would not have supplied the essential element of mutuality of agreement.It is possible to proceed upon this assumption in' the case before us, because of the additional facts present, even though they appear only by implication.

As we have already said, upon a fair construction of the petition and the exhibit thereto, it appears that the two defendants who are seeking to avoid liability joined in a request for indulgence to th^ principal debtor. (The request of the latter might possibly have been enough.) The petition alleges a delivery of the notes, and of the instrument in which this request was contained. An effective delivery includes acceptance (Hancock v. Empire Cotton Oil Co., 17 Ga. App. 170 (1) (86 S. E. 434); 4 Am. & Eng. Enc. Law (2d ed.) 200), and acceptance means assent. Civil Code (1910), § 4230. Thus, upon the plaintiffs acceptance and retention of the papers, he assented to the terms thereof; and even though he did not promise indulgence in express words, such a promise or undertaking on his part was implied by the law. Queal v. Peterson, 138 Iowa 514 (116 N. W. 593, 19 L. R. A. (N. S.) 842), and cases cited in note. One promise may be a good consideration for another even though it be implied from the circumstances. Reynolds v. Nevin, 1 Ga. App. 269, 274 (57 S. E. 918).

It is probably true, as contended by the plaintiffs in error, that the contract shows on its face that it was intended that the plaintiff as well as the other parties thereto should sign .it. In such a case the contract does not ordinarily become complete or effective until it has been signed by all the parties. Clarke v. McNatl, 132 Ga. 610 (1) (64 S. E. 795, 26 L. R. A. (N. S.) 585). But the petition here alleges that the defendants executed and delivered the writings in their present form. They are presumed to have known at the time that the plaintiff had not signed, and a delivery without exacting a signature was a waiver of it.

We therefore conclude that the alleged contract upon which the action was predicated appears not to have been invalid because of a lack of mutuality between the parties, or want of consideration. This ruling is not in conflict with anything decided in Hargroves v. Cooke, 15 Ga. 321, in which it was held that the consideration for an agreement to answer for the debt of another need not be expressed or formally stated, although it should at least clearly appear, but in which it was further held that “If forbearance to sue on an existing debt can be certainty inferred from the instrument, it is a sufficient consideration.”

While we will rest our decision as to the sufficiency of the petition, with respect to consideration and mutuality, on what is said above, we will pause here to notice two other theories upon which the petition might possibly be held good in relation to the matters just referred to. The decision in the Hargroves case, supra, had reference to instruments executed prior to the act of the General Assembly approved January 19, 1853 (Ga. L. 1851-2, p. 343,). It was held in Black v. McBain, 33 Ga. 138, that since the passage of that act a promise in writing to pay the debt of a third person is a good and valid promise although no consideration therefor appears; the effect of which decision we construe to be, not that a consideration is unnecessary, but merely that it need not affirmatively appear, the want of it being a matter of defense. See Davis v. Tift, 70 Ga. 53 (3), 56. The presumption is that the agreement is supported by a sufficient consideration, until the contrary is revealed. In Pearce v. Stone Tobacco Co., 135 Ga. 444, 447 (54 S. E. 103), it was observed: “In Black v. McBain, supra, the consideration was neither alleged nor proved, and it was held that the writing ivas sufficient to satisfy the statute, and that the granting of a nonsuit was error.” See also Turner v. Lorillard Co., 100 Ga. 645 (28 S. E. 383, 62 Am. St. Rep. 345).

Again, a promissory note being negotiable by the law merchant, it is not necessary in a suit thereon to aver or prove that it is founded upon a consideration. A consideration will be presumed, unless the contrary is made to appear. Hobbs v. Citizens Bank, 32 Ga. App. 522 (3) (123 S. E. 72). “Certain instruments import a consideration, and the production of such an instrument alone furnishes prima facie evidence of a consideration, and casts upon the defendant the burden of proving want or failure of it.” Cooley v. Moss, 123 Ga. 707 (2), 710 (51 S. E. 625). Even if it could be said that the supplemental writing, shown in the instant case as “Exhibit B,” fails to disclose that the notes were founded upon a consideration, it does not negative a consideration; and the petition would not be subject to demurrer merely because the consideration was not affirmatively made to appear. Smith v. Ice Delivery Co., 8 Ga. App. 767 (4) (70 S. E. 195).

The ruling which we made at the outset, to the effect that the several writings would be considered as together constituting but one contract, although the notes bore a different date from that of the supplemental agreement, sufficiently disposes of the only • insistence made by the special demurrer,—namely, that the allegations of paragraph 3 of the petition were contradictory.

The two theories of consideration last discussed above will not enter into anything to be said hereafter. They could have no helpful bearing upon -the point now to be dealt with, and would even be irrelevant to the discussion in the next succeeding division of this opinion, in which we pass upon the exceptions to the judgment striking the answer.

Proceeding further, therefore, only upon the hypothesis that the consideration for the defendants’ promise was the promise of the plaintiff to extend the requested indulgence, we have seen that such a promise by the plaintiff was implied from the circumstances. Should the petition have alleged that the promise liad been complied with? The defendants (or plaintiffs in error) contend that such allegation should have been made, and that in the absence of it the petition fails to set forth a cause of action.

A determination of this question will depend upon whether a compliance by the plaintiff with his promise was a condition precedent to the liability of the defendants, or whether his failure to comply would have been in the nature of a condition subsequent, the happening of which would have destroyed any rights which he might otherwise have had under the contract. Where the plaintiff’s right to recover on a contract depends upon a condition precedent, to be performed by him and not by the other party, he must allege and prove the performance of such condition, or allege a sufficient excuse for non-performance; otherwise he fails to establish a cause of action. Griswold v. ScoTT, 13 Ga. 210 (2); Herrington v. Jones, 132 Ga. 209 (63 S. E. 832); Lamar v. First Nat. Bank, 127 Ga. 448 (2, 3) (56 S. E. 486); Williams Valve Co. v. Amorous, 19 Ga. App. 155 (6) (91 S. E. 240); Life Insurance Co. v. Proctor, 18 Ga. App. 517 (1) (89 S. E. 1088); Smith v. Roddenbery Hardware Co., 24 Ga. App. 306 (100 S. E. 718); Golucke v. Lowndes County, 123 Ga. 421 (2) (51 S. E. 406); Bennett v. Burkhalter, 128 Ga. 154 (2) (57 S. E. 231); Schmidt v. Mitchell, 117 Ga. 6 (43 S. E. 371); Barrow v. Pennington, 17 Ga. App. 481 (1) (87 S. E. 719); Dolan v. Lifsey, 19 Ga. App. 518 (5) (91 S. E. 913); Ford v. Lawson, 133 Ga. 237 (5) (65 S. E. 444); Hines v. Cureton-Cole Co., 9 Ga. App. 778 (72 S. E. 191); Jones v. Schachter, 29 Ga. App. 132 (1) (114 S. E. 59). But where his right under the contract vests immediately, and the contract may be defeated by a condition subsequent or by something done afterwards by the opposite party, such matters of avoidance need not be negatived by tlie party claiming the right thereunder, the burden of establishing tlieir existence being upon the opposite party. Buick Motor Co. v. Thompson, 138 Ga. 282 (3), 287 (75 S. E. 354); Griswold v. Scott, supra.

The notes involved in this case are unconditional, although the only consideration therefor may be assumed to be the promise of the plaintiff to do something in the future. In such a ease it is not necessary, in a suit upon the notes, to allege that the plaintiff has complied with his promise, the same not being a condition precedent. His failure to comply would be defensive, and if the defendants sought relief on account thereof, the burden would bo upon them to allege and prove the fact. See Webb v. Simmons, 3 Ga. App. 639 (2) (60 S. E. 334); Baker v. Tillman, 84 Ga. 401 (11 S. E. 355); Baker v. Smith, 135 Ga. 628 (1) (70 S. E. 239).

The petition set forth a cause of action, and all grounds of demurrer thereto were properly overruled.

In our opinion the answer failed to set forth any valid defense. It admits the execution and delivery (which included acceptance) of the notes and the supplemental agreement as alleged in the petition, and does not deny that the several writings were combined to constitute a single transaction, thus composing a single contract, although it is denied in the answer that the supplemental agreement was executed and delivered as part and parcel of the consideration of the notes. It therefore appears, even by the admissions of the answer, that the notes referred to in the other writing are the ones sued on, as alleged in the petition, although the supplemental agreement may not in itself completely identify them. The allegation in paragraph 4 of tlie answer, that the notes are “without any consideration in so far as they apply to these defendants,” would not constitute a sufficient plea of want of consideration, even if we considered the notes as standing independently of tlie other writing. Civil Code (1910), §§ 4242, 3538. In a contract of suretyship, the consideration may move only to the principal debtor.

The allegation that the notes are “totally void as hereinafter set forth, and defendants are not indebted thereon to plaintiff in any amount whatever,” is a mere conclusion, depending upon the sufficiency of the subsequent portions of the answer. There was no lack of consideration merely in the fact that the principal debtor may have been insolvent and that the judgment against him may have been, therefore, commercially worthless, as contended in paragraph 5 of the answer. All of the other averments of this paragraph, in so far as they seek an avoidance of liability because of any material facts therein stated, amount to no more than a misconstruction or a contradiction of the written contract upon which the action was brought, which appears upon its face to be complete, and therefore, in the absence of fraud, accident or mistake, not subject to be-varied by parol. Bond v. Perrin, 145 Ga. 200 (88 S. E. 954); s. c. 18 Ga. App. 179.

While it is alleged in paragraph 5 (a) that no extension of time on the pre-existing indebtedness was granted, and while this allegation, if considered independently of the context, might, as against a general demurrer, be a sufficient averment that the plaintiff had breached his promise to grant the indulgence, yet, as already indicated, it is construed only as setting up what the defendants contended was the effect of the writings as tendered and accepted, namely, that there was never an agreement by the plaintiff to extend the time in which the principal debtor should pay the amount of the judgment. We have already held adversely to this contention, in our ruling upon the demurrer to the petition.

The answer did not seek to set up a failure of consideration as for a breach of the implied covenant of the plaintiff, as might have been done if the facts had so warranted, but attempted only to plead a want of consideration, which attempt was futile since, as we have seen, the effect of the plea was to admit the plaintiff’s acceptance of the notes, from which act he impliedly promised forbearance and thus furnished a consideration.

Since the answer was subject to the general demurrer, and properly stricken as being insufficient to set forth any valid defense, it is unnecessary to examine the special demurrers interposed thereto.

It is not insisted that the court, upon striking the answer, failed to mark the case in default, before directing the verdict. The presumption, therefore, is that, if such entry ought to have been made, it was made.

Under the facts of this case, the verdict and judgment will not be set aside merely because the defendants might have been entitled to a judgment setting up 'the fact of their suretyship. Civil Code (1910), § 3556. Indeed, tlie fact of suretyship sufficiently appears upon the face of the contract as pleaded, and it would .probably be unnecessary for the defendants’ protection for the fact to be made to appear in the judgment. However, the answer did not in the instant case, as was true in Whitley v. Hudson, 114 Ga. 668 (3) (40 S. E. 838), contain any prayer that the judgment should be rendered against them only as sureties, in accordance with the section of the code just referred to. Further more, the bill of exceptions contains no assignment of error attacking the judgment upon this ground.

We find no error in any of the rulings complained of.

Judgment affirmed.

Jenlcins, P. J., and Stephens, J., concur.