Cheshire v. Hightower

Jenkins, P. J. 1. “The form of the contract is immaterial, provided the fact of suretyship exists.” Civil Code (1910), §§ 3541, 3556. Thus, one who signs a note with another apparently as a joint principal may in an action by the payee plead and prove that he had no interest in the paper and was only surety for the accommodation of the other and principal signer, and that the plaintiff took the note with knowledge of such facts. Seymour v. Bank of Thomasville, 157 Ga. 99 (1) (121 S. E. 578); Hall v. Capital Bank of Macon, 71 Ga. 715; Buck v. Bank of State of Ga., 104 Ga. 660, 663 (30 S. E. 872); Hall v. Rogers, 114 Ga. 357 (1) (40 S. E. 250); Trammell v. Swift Fertilizer Works, 121 Ga. 778 (1) (49 S. E. 739); Williams v. Peoples Bank, 9 Ga. App. 714 (72 S. E. 177); McKibben v. Fourth Nat. Bank, [794] 32 Ga. App. 222, 223 (122 S. E. 891); McKibben v. Luther Williams Bkg. Co., 32 Ga. App. 419, 425 (123 S. E. 726); Kenimer v. Henderson, 32 Ga, App. 203 (122 S. E. 820). Under such circumstances tire fact that the payee of the note might have been induced to make the loan on the faith of the surety’s credit, rather than upon that of the principal debtor, would not alter the rule. Cordray v. James, 19 Ga. App. 156 (1, 2) (91 S. E. 239). Decided April 18, 1925. Lowrey Slone, for plaintiff in error. Glessner & Collins, contra. 2. “Where a note of the character mentioned in the first division is executed, and a contemporaneous mortgage is given by the principal to secure the indebtedness represented by the note, it is the duty of the payee to record the mortgage. Failure to record the mortgage will increase the risk of the surety and operate to discharge him, unless it is affirmatively shown that the omission to record the mortgage did not injure the surety.” Seymour v. Bank of Thomasville, 157 Ga. 99 (4) (121 S. E. 578); Cloud v. Scarborough, 3 Ga. App. 7 (3) (59 S. E. 202); Cordele Grocery Co. v. Thigpen, 4 Ga. App. 643 (62 S. E. 97). 3. But where it appears that, more than two yeax-s after the maturity of the note, the defendant surety, at his own request, was substituted for the original surety, under an agreemeiit whereby he was to “sign the note in [the original surety’s] place,” and where it appears that the mortgage given at the time the note was originally executed had been withheld from record with the knowledge and consent of the original surety, the substituted surety is not entitled to claim a discharge by reason of the mortgagee’s failure to x-ecord, on. the theox-y that it increased the risk, since the giving of the mortgage was .not “contemporaneous” or “simultaneous” with the assumption of liability by the new surety, and, in the absence of any fraud or deceit on the part of the plaintiff payee and mortgagee, such surety in signing the mortgage note at the instigation and for the benefit of the original surety is conclusively presumed to have been aware of the fact that it had thus remained unrecorded, and therefore could not be taken to have signed it because of the perfected lien created by the mox-tgage; and, under such circumstances, his offer to sign “in the place of” tlxe original surety must be taken as an offer to assume liability on the instrument as it in fact existed. The judge did not err in directixxg a verdict in favor of the plaintiff and against the defendant’s plea of discharge. Judgment affirmed. Stephens and Bell, JJ:, concur.