Cartwright v. Farmers Bank of Tifton

Sutton, P. J. (After stating the foregoing facts.) The plaintiff’s petition set out a cause of action, and the trial judge did not err in overruling the demurrer to the petition. The plaintiff’s case is based on the theory that the writing signed by the defendant, a copy of which is attached to the petition and was also introduced in evidence, is a contract of suretyship and obligated the defendant as a surety on the note sued on. A copy of this writing is as follows: “The Farmers Bank of Tifton, Tifton, Georgia. February 28, 1938. The Farmers Bank of Tifton, Tifton, Georgia. Gentlemen: Regarding the two notes given you today by J. L. Cartwright, one of which I have endorsed, I wish to state that I will see that whenever a payment is made on the note which I have endorsed, that a like payment will be made on the one I have not endorsed. It is understood that either or both of said notes may be paid before maturity and thereby stop interest. Yours very truly, H. L. Cartwright.” The defendant, PL L. Cartwright, signed one of the notes and was jointly and severally liable thereon to the bank with his son, and the above instrument signed by him states that he will see that, whenever a payment is made on the note which he had endorsed, a like payment would be made on the note that he had not endorsed. The jury was authorized to find from the evidence that the execution of this paper and the two notes to the bank constituted one and the same transaction, and that these instruments were accepted by the bank in settlement of the overdraft or indebtedness due it by J. L. Cartwright. There was no consideration flowing to H. L. Cartwright, in this transaction, but he endorsed one of the notes and signed the separate instrument to the effect that he would see that, when a payment was made on the note which he had endorsed, a like payment would be made on the other note, purely as an accommodation for his son, J. L. Cartwright. This made him a surety for said indebtedness of his son, instead of a guarantor. Where the consideration is for the benefit of the principal, the contract is one of suretyship; and where the consideration is one of benefit flowing to the guarantor, the contract is one of guaranty. The Code, § 103-101, provides: “The contract of suretyship is one whereby a person obligates himself to pay the debt of another in *852 consideration of credit or indulgences, 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.” In Manry v. Waxelbaum, Company, 108 Ga. 14, 17 (33 S. E. 701), Judge Cobb, in dealing with the question of suretyship and guaranty, said: “The two terms are frequently used interchangeably, and for this reason a great confusion has arisen in the books as to the proper distinction to be drawn between them. A guarantor is a surety in the sense that he obligates himself to pay the debt of another, but at the same time there is a very clear distinction between them. One difference is pointed out by our Code. It says that a contract of suretyship ‘differs from a guaranty in this, that the consideration of the latter is a benefit flowing to the guarantor.’” Also, see Wright v. Shorter, 56 Ga. 72, 77, as to the difference between mere sureties and guarantors. We think that the trial judge properly construed the instrument in question as a contract of suretyship, and he did not err in so ruling, as complained of in special ground 1 of the motion for a new trial. Nor did he err in charging the jury as complained of in special grounds 2 and 3, as the jury was authorized to find from' the evidence that this instrument and the two notes were part of the same transaction between the two Cartwrights and the bank by which the indebtedness of the son, J. L. Cartwright, to the bank was adjusted. The separate writing signed by the defendant, H. L. Cartwright, is unambiguous, and the trial judge did not err in sustaining paragraphs 3 and 4 of the plaintiff’s demurrer to paragraphs 10 and 11 of the defendant’s answer, on the ground that these paragraphs of the answer had the effect of changing, altering, and varying the terms of said written instrument. According to the evidence, three payments of the same amounts were made by J. L. Cartwright on each of the two notes, and then the balance due on the note that was endorsed by H. L. Cartwright was paid by him. Under the contract of suretyship herein referred to and the law and the facts of this case, we think that the defendant, H. L. Cartwright, is liable for the balance due on the note sued on, and we so hold. Pursuant to the act of the General Assembly, approved March 8/1945 (Ga. L. 1945, page 232), requiring that the full court con *853 sider any case in which one of the judges of a division may dissent, this ease was considered and decided by the court as a whole. Judgment affirmed. Broyles, C. J., Button, P. J., MacIntyre, and Par Jeer, JJ., concur. Felton and Gardner, JJ., dissent.