Leffler Co. v. Lane

Gilbert, J. (After stating the foregoing facts.) P. C. Waters was doing business with A. Leffler Company, and was indebted to the latter; and wishing to continue his dealings, he executed and delivered a deed, not only to secure the existing indebtedness, $1536.01, but also to secure “any and all indebtedness” which Waters “may hereafter owe” to Leffler Company, “be it more or less than” $1536.01. The same clause of the deed further provided that advances in excess of this sum “shall be made, if at all,” at the option of Leffler Company. The advances to Waters individually never thereafter exceeded the sum named. 1. The terms of the deed are comprehensive and unambiguous. There are no allegations of fraud, nor of anything else entering into the making of the deed which would in any way excuse the grantor or relieve him from the terms of the contract which he engaged to perform. Courts should guard with jealous care the rights of private contract, and give to them full effect when possible to do so. This is a duty which rests upon principles of the highest importance, for 'the security and integrity of the business world depends upon it. It is insisted, that the intention of the parties in making the deed was to secure such advances as should be made by Leffler Company to Waters in the usual course of business as theretofore conducted by him; that Waters at that time was doing business as an individual, but subsequently thereto entered into a copartnership with-one Lee; and that the firm thus constituted continued the usual business with Leffler Company; and that this firm contracted a debt which was not embraced within the terms of the security deed, although after the dissolution of the firm Waters assumed the copartnership debt individually. We can see nothing in the language of the contract to justify this reasoning. The language in the deed makes no such limitation upon its operation, but, on the contrary, declares that it is intended to secure “any and all indebtedness” which Waters “may hereafter owe” to Leffler Company. No word in a contract shall be treated as a redundancy if any meaning reasonable and consistent with other parts can be given to it. Mutual Life Ins. Co. v. Durden, 9 Ga. App. 802 (72 S. E. 295). To construe this deed as securing “any and all indebtedness,” including a debt of Waters & Lee, a copartnership, assumed by Waters, is not only reasonable and consistent with other parts of the contract, but a contrary view would [745] be unreasonable, because the latter view would be treating as redundant and meaningless the words “any and all” indebtedness which Waters “may hereafter owe” to Leffler Company. We think perhaps the confusion has been occasioned by reason of the introduction of the part played in the transaction by the copartnership, and the contentions in regard to the liability of the individual partner for partnership debts. Suppose, for the sake of the argument, that Waters had assumed the debt of some third person to Leffler Company. Surely the security deed would cover such indebtedness, as its comprehensive language included “any and all indebtedness.” The result is the same if the debt assumed was one due by a copartnership of which Waters'was a member. First National Bank of Paterson v. Bayard, 26 N. J. Eq. 255. But, it is argued, Leffler Company declined to release Lee, the retiring partner. This can not operate to the benefit of Waters and those claiming under him. The authorities are not uniform on the question of whether a creditor is bound to treat a retiring partner as a surety and look to the other partner, who continues the business, as principal, where the creditor has notice of the dissolution and of the agreement by the continuing partner to assume the debts. For a full discussion see Preston v. Garrard, 120 Ga. 689 (48 S. E. 118, 102 Am. St. R. 124, 1 Ann. Cas. 724); Sheppard v. Bridges, 137 Ga. 615 (74 S. E. 245); Grigg v. Empire State Chemical Co., 17 Ga. App. 385 (87 S. E. 149). In the present case Waters assumed the specific indebtedness to Leffler Company, and himself gave actual notice. Whether compelled to do so or not, Leffler Company had the legal right to treat Lee as security. However this may be, Waters owed the debt incurred by the former partnership. The copartnership had ceased, and Leffler Company could sue Waters individually or, with proper service, jointly with Lee; and in either event the judgment would bind the individual property of Waters, and the deed secured “all indebtedness now owing or to be owing.” For the reasons above stated we hold, that, under the plain terms of the security deed, the debt of the copartnership, when assumed by Waters, became his debt, whether Lee was released or not, and was covered by the terms of the security deed. On the subject of securing future debts see Hester v. Gairdner, 128 Ga. 531 (58 S. E. 165); Bank of Cedartown v. Holloway-Smith [746] Co., ante, 700 (92 S. E. 213). The trial court having held to the contrary of what we here decide, the judgment must be reversed. 2, 3. The rulings in the second and third headnotes require no elaboration. Judgment reversed on the main bill of exceptions, and affirmed on the cross-bill. All the Justices concur.