Holt v. Empire Tire & Rubber Co.

Bell, J. (After stating the foregoing facts.) It appears from the allegations of the petition, whether we have fully shown it in the statement of facts or not, that the debt of Motor Tire Company was not extinguished. If it were sought, therefore, merely to hold the defendant Floy L. Holt, answerable for the debt of the tire company, the alleged "agreement between him and the plaintiff should, under the statute of frauds, have been in writing, in order to be enforceable, unless there was such part performance by the plaintiff as would render it a fraud by [725] the defendant if the court did not compel performance by him. It is not necessary, however, to enter into a decision of whether, under the facts set out in the petition, the defendant could be held solely for the debt of the tire company. Properly construed, the action is founded upon an original undertaking wherein the defendant was substituted as the plaintiffs debtor in the place of L. B. Holt, the guarantor. Considering the allegations as true, as must be done on demurrer, the original guarantor, upon the payment of $5,000 or the equivalent, was entirely released and discharged from further liability, and the defendant Floy L. Holt, in consideration of such releasé and discharge, was substituted in his stead for the balance of the indebtedness, less the deduction of $1,000 on account of defective merchandise. It is immaterial whether the tire company continued liable or not. A party may be substituted as a debtor in place of one who is only a surety or a guarantor, and an agreement to that effect is not one falling within the operation of the statute of frauds, although the obligation of the primary debtor is not extinguished. Indeed, in such a case the surety or guarantor is considered as the primary debtor for the purpose of determining the rights and liabilities of the parties to the new agreement. “An agreement between a creditor, his debtor, and a third person, whereby such third person, in consideration of the creditor’s releasing the debtor, agrees to pay the amount of the debt to the creditor, and as part of the agreement the creditor releases his debtor and agrees that such third person shall be substituted for the debtor, is not within the statute of frauds; the debt is extinguished as to the debtor, and the third person becomes, by substitution, the debtor in his place. Palmetto Mfg. Co. v. Parker, 123 Ga. 798 (51 S. E. 714).” Harris v. Jones, 140 Ga. 768 (1) (79 S. E. 841); Coldwell Co. v. Cowart, 138 Ga. 233 (2) (75 S. E. 425); Williams v. Garrison, 21 Ga. App. 44 (1) (93 S. E. 510), and cases cited. The court did not err in overruling the demurrer. Judgment affirmed. Jenkins, P. J., and Stephens, J., concur.