Ryle v. Farmers & Merchants Bank

Jenkins, P. J. (After stating the foregoing facts.) 1. “If the fact of suretyship does not appear on the face of the contract, it may be proved by parol either before or after the judgment (the creditor not being delayed in his remedy by such collateral issue between the principal and his surety), if before judgment the surety shall give notice to the principal of his intention to make such proof.” Civil Code (1910), § 3556. The record shows that notice of such intention was given to the principal in the instant case. If such a surety “is by an erroneous ruling denied the right to establish before judgment the fact thus set up, he is entitled [462] to a new trial.” Whitley v. Hudson, 114 Ga. 668 (3) (40 S. E. 838). In the case here cited the alleged error was the exclusion of evidence seeking to show that the defendant had signed merely as surety. In the instant case no such evidence was excluded; but it is contended that the court erred in charging generally that, “in the event you find for the defendant, the form of your verdict would be, cWe, the jury, find for the defendant/ and in failing in the same connection to charge the jury that if they found that she was surety only, the form of their verdict would be that they found that she was surety on the note, and that the plaintiff have judgment against her as surety in the sum sued for.” Even if the failure so to charge, in the absence of a written request, might be accounted error, it was, under the particular facts, without injury to this defendant; since it appears that after the other defendant, the alleged principal, had sustained his plea of discharge in bankruptcy, the court directed a verdict in his favor. 2. The delivery of an inchoate or incomplete bill or note,—as •where the instrument is delivered with blanks left for the insertion of the amount or terms of payment, or where a signature on a blank paper is delivered with the intention of having a complete instrument written over it,—confers on the person to whom it is delivered presumptive authority to complete the instrument in the manner contemplated by the signer, by filling the blanks, or by writing the instrument as the ease may be. Atlanta Nat. Bank v. Bateman, 21 Ga. App. 624 (3) (94 S. E. 853); 8 Corp. Jur. 182, 185; 3 R. C. L. 874, 875. These general principles, which are invoked where the person to whom a note is delivered has abused his authority, while more frequently applied where the plaintiff is a bona fide holder by transfer or indorsement (Hancock v. Empire Cotton Oil Co., 17 Ga. App. 182; 3 R. C. L. 893, 86 S. E. 434), have been given application where “the plaintiff bank was merely the payee of the note which the plaintiff in error signed in blank as an accommodation indorser or surety for the maker;” and it is held that “the bank is in the position of an innocent transferee or holder as to the implied power given by the surety to the principal to fill in the blanks, . . it not appearing that the bank had knowledge that the private agreement between -the surety and ihe principal was violated, and the filling in of the blanks being ap [463] parently with such implied authority.” Thompson v. Bank of Chatsworth, 30 Ga. App. 443, 445 (5) (118 S. E. 470). (a) “Quite a distinction exists between the initial forgery or the material alteration of a completed instrument, and the filling in of blanks in an incomplete instrument by a person to whom it is intrusted by the signer.” Proof of the insertion of a larger amount in the blanks of a note than that authorized by the maker “would not support a plea of non est factum” (Hancock v. Empire Cotton Oil Co., supra; 3 R. C. L. 1003, 1004); but in the instant case, even if the defendant’s plea of non est factum, and plea of suretyship and release from liability by reason of the plaintiff’s alleged alteration of the note sued on, could be construed to cover the defense actually shown by the defendant’s testimony, viz., that the amount in the note was blank at the time she signed it, and that so far as she, the surety, was concerned she did not know that the principal would authorize it to be filled out and used for more than $400, it does not appear from the record that the plaintiff bank had any knowledge of the conversation and understanding between the principal and the alleged surety, or had any reason to believe that it was not authorized to fill in the amount left b.lank to the figure agreed upon with the principal. 3. “One who signs or indorses a note as surety can not in defense to an action thereon, either by the innocent payee or any other bona fide holder for value, set up that the principal maker, to whom he intrusted the note, delivered it in violation of a condition that a certain other person or persons should first sign or indorse it.” Crawford v. Citizens & Southern Bank, 20 Ga. App. 576 (3) (93 S. E. 173). “Knowledge of the facts in the holder at the time of taking must be shown.” Thompson v. Bank of Chatsworth, supra. In the instant case the proof showed that neither the principal to whom the note was intrusted nor the innocent payee had made or violated any such understanding with the alleged surety that another person, whose name appeared on a previous note, for which the note sued upon was given in renewal, should also sign such renewal paper. 4. There was no proof whatever as to any alterations in the note sued on, by changing amounts or dates, or by releasing another person after he had signed the note, as set forth in the plea. 5. The court did not err in charging the issues as actually made under the defendant’s proof, rather than strictly in accordance with [464] her unsustained plea of non est factum and release as a surety by the alleged alteration of the note and release of another alleged signer, even though the court was not required so to charge. Moreover, the court charged that the defendant “contends that the note was brought to her in blank, and that . . it was her understanding that it was for the purpose of renewing a $400 paper, and that she signed those papers in blank,” and instructed the jury, “if you believe that to be the truth of the case, the defendant would be entitled to have and receive at your hands a verdict.” Such instruction,'without any qualifications, was much more liberal to the defendant than was required by the law and the evidence. Judgment affirmed. Stephens and Bell, JJ., concur.