Taff v. Larey

116 S.E. 866, 29 Ga. App. 631, 1923 Ga. App. LEXIS 147

• Court: Court of Appeals of Georgia
• Decided: February 15, 1923
• Docket: 13498
• Status: Published

Opinion

Bell, J.

For brevity and convenience we have -arbitrarily referred in the headnotes to the parties at issue by alphabetical designations. None of the headnotes require elaboration except the last one. Before proceeding to that, however, we will discuss the case with reference to its general phases under the head of the general grounds of the motion for a new trial.

John C. Haney filed a suit upon two promissory notes, against J. S. Taff and R. W. Taff as alleged principals, and against Mrs. ICittie P._ Larey as an alleged indorser. J. C. ’Taff, whose name appears first upon the notes, was not made a party defendant, it being alleged that his whereabouts were unknown. The two notes were identical in form, one of which is given as follows:

“ $2,000.00 Cartersville, Ga., May 17, 1920.

“ On January 1, 1921, after date we promise to pay John C. Haney or order two thousand dollars for value received. Payable at Cartersville with interest from date at the rate of eight per cent, per annum, with all costs of collection, including ten per cent, attorney’s fees. Each of us, whether principal, security, guarantor, endorser, or any other party hereto, hereby waives and renounces, each for himself and family, any and all homestead and exemption rights and any and all exemption of daily, weekly, monthly or yearly wages, or salary-of each of us, from the process of garnishment, either of us or the family of either of us, may have under or by virtue of the constitution or laws, State or Federal, as against this debt or any renewal thereof. ' Notice of non-payment and protest waived. Given under the hand and seal of each party.

J. C. Taff (L.S.)

J. S. Taff (L.S.)

B. W. Taff (L.S.)

On back of note: “ Mrs. Kittie P. Larey.”

“Paid $1413.34 Feb. 16, 1921.”

J. S. Taff and B. W. Taff, prior to judgment, under the terms of section 3556 of the Civil Code (1910), gave notice in writing to the plaintiff and to Mrs. Larey that they intended in the trial of the case to set up that they were sureties for J. C. Taff and cosureties with Mrs. Larey. And they subsequently filed an answer in accordance with this notice. The suit was not for the entire principal, but was for only one third of the aggregate amount of the notes, it being shown by the petition that two thirds thereof had been previously paid. In the trial it appeared indisputably that this payment had been made by J. S. and E. W. Taff. They sought to maintain, not as against the plaintiff, of course, but as between themselves and Mrs. Larey, that the latter was liable as a cosurety with them for J. C. Taff, and that, they having paid two thirds of the original debt, Mrs. Larey was liable as among themselves to pay the remaining third. Mrs. Larey answered that she was not a cosurety, but that J. C. Taff, J. S. Taff, and E. W. Taff, as far as she knew at the time of her indorsement, were joint principals, and that she signed the same intending thereby to become an accommodation indorser for all of them together, and not a cosurety with J. S. Taff and E. W. Taff for J. C. Taff. It does not appear that she gave notice to any person (as did. the other defendants), except as may appear from her answer that she would seek to assert this position. In passing we may say that this was unnecessary as to her, because the code-section already referred to requires such notice only when the fact of suretyship does not appear upon the face of the contract; and, as ruled in the first headnote, such a suretyship as claimed by her prima facie appeared, from the physical manner of her indorsement. It is otherwise, however, as to the other defendants, who, upon the authorities cited in the same connection, were prima facie presumed to be principals.

The contest in the trial was not one with which the plaintiff was concerned, but was solely between J. S. and B. W. Taff on one side and Mrs. Larey on the other, for the purpose of determining the relation which they bore to each other in respect to the debt. It unquestional’y was established that J. S. and B. W. Taff were only sureties for J. C. Taff, notwithstanding that upon the papers they were prima facie principals with him. Unquestionably, also, in so far as the plaintiff was concerned, Mrs. Larey was jointly and severally liable to the plaintiff as an accommodation indorser with the other two defendants. The only issue referable to a jury was whether Mrs. Larey was a cosurety with them. The jury found in her favor, and a verdict and judgment were framed under such terms as to make the Tails primary sureties and Mrs. Larey a secondary surety for the debt. The Tails are excepting to the refusal of the court to grant them a new trial.

Suretyship is defined by the code as follows: “ The contract of suretyship is that whereby one obligates himself to pay the debt of another in consideration of credit or indulgence, or other benefit given to his principal, the principal remaining bound therefor. It differs from a guaranty in this, that the consideration of the latter is a benefit flowing to the guarantor.” Civil Code (1910), § 3538.- This definition, however, does not greatly aid us in determining the question of cosuretyship between the parties here at issue. “ Cosureties are those who are called upon as among themselves on a contract of suretyship for the same debtor and for the same debt, although not necessarily in equal amounts, or on the same instrument. This is true although they become sureties at different times without negotiating with each other, and each without knowledge that the other has intended to enter that relation.” 32 Corpus Juris, 15. It appears, by the evidence, that the notes in question were signed by J. C. Tali, J. S. TafE, and E. W. Tail in Colquitt count}1, Georgia, and were thereafter taken by the first named to Bartow county, Georgia, where he negotiated them, after procuring the signature of Mrs. Larey thereto, apparently as an accommodation indorser. It also appears that neither did J. S. Taff nor E. W. Taff know that Mrs. Larey would sign the notes in such capacity or in any capacity, nor does it appear that they found out she had signed them before they were negotiated. In fact it is not shown when they first learned of it. But this, under the principles stated, would not prevent her from becoming a cosurety, if she knew at the time she indorsed the notes that they were not principals with J. C. Taff, but merely sureties for him, and 'if she intended to become surety for him also. Under these circumstances she and they would be cosureties, notwithstanding they signed the papers in apparently different relations thereto, at different times, and without any knowledge or expectation of the first signers that she would join them in this relation. It may be reasonably presumed that one who signs a note as surety is willing for others, even without his knowledge, to become cosureties with him. Whitehouse v. Hanson, 42 N. H. 1 (1) 21. Presumptively, at least, a party accepts whatever is for his benefit. Ross v. Campbell, 73 Ga. 309 (2); Beardsley v. Hilson, 94 Ga. 50 (1), 53 (20 S. E. 272); Whitehouse v. Hanson, supra.

This is in no wise repugnant to the idea of contribution. Contribution does not necessarily rest upon the original contract. It “ arises out of the relation created thereby, of the common obligation and the contract implied therefrom of discharging the common' obligation equally.” . It is founded upon the principle that equality is equity. McLin v. Harvey, 8 Ga. App. 360 (3) 366 (69 S. E. 123); 32 Cyc. 276. The plaintiffs'in error are therefore in position to urge the liability of Mrs. Larey as a cosurety with them even though there may have been no concert of action between them. But on the other hand, before one can become a surety for another, the consent or acceptance of the latter is necessary. Whitehouse v. Hanson, supra. This applies, of course, only as between the parties themselves and does not prevent the creditor from holding one as surety for another without the principal’s knowledge or consent, if the creditor has a contract with such one accordingly. So in this case Mrs. Larey could, as between herself and the payee, become a surety for J. S. and E. W. Taff, without the knowledge or consent of the Taffs; but in order for her to maintain as to them that she bears such relation, it will be necessary for them to have had notice of and to have accepted her offer to assume that relation. One surety cannot be made principal as to another surety except at the latter’s request. 32 Cyc. 30. The insistence, therefore, of the plaintiffs in error that Mrs. Larey could not maintain her contention that she was merely a surety for them and J. C. Taff without their consent is perfectly sound in so far as they are concerned. If- they do not want her as their suret}1, they do not, under the law, have to take her as such. It does not follow, however, that as between herself and the creditor she could not become a surety for them, notwithstanding she may have signed the paper under such circumstances that as to them she did not assume that relation, on account of their not having accepted her offer so to do. Her mere indorsement may be considered as such offer.

She can, therefore, if it be the truth, maintain the position asserted by her, to wit, that she became surety for the other signers of the note in so far as the creditor was concerned, regardless of the knowledge or consent of the others, and if this is found to be the fact, she should prevail; though not quite to the extent allowed by the verdict and judgment complained of. If she were not their surety, she would not be entitled to control any judgment or fi. fa. as against them merely because she agreed with the creditor to become such. Under these circumstances she would as to them be no surety at all, and would, therefore, not have the rights of a surety as against them. So she is not entitled, even if she prevail, to have it set up in the verdict and judgment that she is to control the fi. fa. merely by reason of her agreement with the creditor, they having had no notice thereof and not having accepted the same. The benefits of section 3558 of the code are for an actual surety, who becomes such on the authority of the principal. If she would control the fi. fa., she can do so only by purchasing it just as any other stranger. These observations are in view of Mrs. Larey’s pleadings to the effect that the other defendants did not know of her indorsement at the time thereof, and therefore disclosing that as to them no relation was created thereby-

In the state of the pleadings and the undisputed evidence there is only one issue in the case, and that is this: Did Mrs. Larey at the time she indorsed her name upon the notes have knowledge that J. S. Taff and K. W. Taff were sureties for J. C. Taff, and did she by such indorsement intend and contract to become thereby a surety also for J. C. Taff. If she did, they all were cosureties and the Taffs ought to prevail in this proceeding; otherwise not; nor would it follow absolutely that even if she knew of the surety-ship of J. S. and E. W. Taff she became cosurety with them. Knowledge of their suretyship alone would not make her a cosurety. She might with such knowledge have consented to become a surety as to" the creditor only for J. C. Taff, J. S. Taff, and E. W. Taff all together. Three facts are necessary to make her a cosurety: (1) Suretyship of J. S. Taff and E. W. Taff. This is unquestionably established by the record as it is now before us. (3) Knowledge on the part of Mrs. Larey of such suretyship at the time of her indorsement. (3) A contract by her indorsement to become a surety also, not for all of the others, but for J. C. Taff alone. She had the right to stipulate the character of the liability which she assumed in signing the papers, and parol eyidenee is admissible to prove the liability which she did assume in such act. Civil Code (1910), § 5796.

A part of what we have said in the foregoing, especially as to the right of Mrs. Larey to control the fi. fa., seems more or less technical and not to reach the substantial rights of the parties. However, we believe that we have correctly stated the law. We entered into that feature of the case because we were attracted thereto by the interesting briefs which were filed by the attorneys for both sides. A number of authorities were cited by them which we have not referred to in this opinion, but which we have examined not only with interest but with profit. We think that the principles which we have above announced are not in conflict with the cases which have been cited by either side; and, what is more, we think that the authorities relied upon in the opposing briefs are in general accord with each other upon the propositions which we have announced.

Applying the foregoing principles to the evidence which Avas adduced upon the trial, a verdict was not demanded for either party, but the jury would have been authorized to find either for the plaintiffs in error or for the defendant in error.

We come now to the point referred to in the last headnote. Upon the issues in dispute the evidence was slight, mostly- circumstantial, and a ruling prejudicial to either party might have turned the scales against the interest of the real truth and justice of the case. The court permitted Mrs.. Larey, over objection of the other defendants, to testify as follows: “ At the time of these two conversations with the two Taffs and Mr. Lockridge I was on various other papers with Clarence. I knew the- amounts of these various papers I had signed with him, but I didn’t know whether I had signed them on the back, face or how.” It seems that she was trying to explain that if she made any admissions to the other defendants they were made when she was not informed as to the legal effect of her signature. Parenthetically, let it be said here that her signature’s physical relation to the paper, though raising a prima facie presumption for the contention which she sought to establish, is of no legal effect whatever as against the real fact and truth as to the nature of the contract into which she intended to enter. It does not matter where her name was placed, if she intended to become a cosurety with the other two defendants. However, she did know that she had signed these particular notes upon the “back;” and whether she remembered how she had signed other notes would be immaterial in so far as the record discloses. And in testifying in this connection that she was “ on various other papers with Clarence ” (J, C. Taff), she gave evidence which we think was not only irrelevant, but which was prejudicial to-the other defendants. The record shows that she is a lady of advanced age, that J. C.'or Clarence Taff is her son-in-law; that he is a son of one of the plaintiffs in error and a nephew of. the other. In view of these relationships, the jury might have been swayed unconsciously to place the whole liability for these notes upon the blood relations of the principal debtor, especially after learning that Mrs. Larey was already on various other papers with him, and thus to find in her favor independently of any contract which she may have made to become a cosurety with the plaintiffs in error for him. AVhile the admission of evidence which is merely irrelevant and immaterial is not. ground for reversal, “unless a reasonable likelihood of prejudicial effect appears?’ (Watkins v. Woodbery, 24 Ga. App. 80 (2) 100 S. E. 34), such likelihood does appear in the instant case. In so close a case upon the facts, we are quite certain that the plaintiffs in error are entitled to a new trial, and we order accordingly. Central of Ga. Ry. Co. v. Prior, 142 Ga. 536 (2) (83 S. E. 117); McGriff v. McGriff, 154 Ga. 560 (115 S. E. 21).

As the case must go back, we will say further that it should be submitted merely for a finding either in favor of or against the cosuretyship as contended for by the Tails. The answer of Mrs. Larey was good only as a denial thereof. It was insufficient to set up affirmatively a suretyship of any other character.

Let it be distinctly understood, also, that the reversal of the judgment will not disturb the verdict and judgment which the plaintiff Iianey has already obtained, jointly and severally, against the parties to this controversy. It will only apply to the relationship between the parties hereto as the same has been stated therein.

Judgment reversed.

Jenkins, P. J., and Stephens, J., concur.