Hill v. O'Neill, 101 Ga. 832

Hill v. O'Neill

101 Ga. 832 | Ga. | 1897

Atkinson, J.

The question in this case is, whether, after a. promissory note is signed by one as surety, if it is changed in respect of the amount of interest it bears, either by the principal who executed it for the purpose of negotiating it to another, or by the . person to whom it is negotiated, without ■ the consent of the surety, he is released. “The contract, of suretyship is one of strict law.” Civil Code, § 2968. A-change of the nature of the terms of his contract, without the. consent of the surety, discharges him. Civil Code, §2971,. The only question of fact which is at all doubtful in the pres*835ent case is, whether the rate of interest was changed from •eight to twelve per cent, by the principal, or by the person to whom it was delivered in course of negotiation. That the change was made is not questioned, but there is nothing to indicate the assent of the surety to the change. Does the instrument sued upon, in its changed condition, express the obligation of the contract into which the surety entered? To ask the question, it seems to us, is to answer it. The surety’s •obligation, according to his real contract, was to pay a given rate per cent. The contract of the surety, according to the instrument sued upon in its changed condition, was to increase his liability, by imposing upon him the obligation to pay a higher rate per cent. It therefore can in no just sense be said to be the contract of the surety. In so far as the same concerns the surety, it is immaterial by whom the alteration was made. If made by the transferee of the note, it requires no argument to prove the discharge of the surety, upon the well-recognized and universally accepted principle, that one who •commits a forgery can not thereby impose upon the other a legal obligation to perform the contract according to the tenor •of the forged instrument; and it is equally certain that a material alteration in the obligation of the contract by one who is bound as principal, made after it is signed by the surety, will discharge the surety from liability to one who took the changed instrument bona fide and without notice. In the ■case of Wood v. Steele, 6 Wallace, p. 80, the Supreme Court ■of the United States held: “The alteration of the date in any commercial paper, though the alteration delay the time of payment, is a material alteration, and if made without the consent of the party sought to be charged, extinguishes his liability. The fact that it was made by one of the parties •signing the paper before it had passed from his hands, does not alter the case as respects another party (a surety), who had signed previously.” In the opinion delivered by the court through Justice Swayne, it is said: “The grounds of the discharge in such cases are obvious. The agreement is no longer the one into which the defendant entered. Its ■ identity is •changed; another is substituted without his consent; and by *836a party who had no authority to consent for him. There is no longer the necessary concurrence of minds.” If the proposition thus announced be generally true as respects joint makers of a promissory note, how much stronger the reason why this change should operate to discharge one who is confessedly a surety. The argument was pressed upon us with great earnestness by the learned counsel for the plaintiff in error, that if the surety, who was sued in the present case, signed this paper, and delivered it to the principal to be by him negotiated, he thus placed it within the power of the principal, by making the alteration, to perpetrate a fraud upon one who took it bonafide ; and therefore that such a person ought, as against such surety, to be protected. In the case of Wait v. Pomeroy, 20 Mich. 425, the Supreme Court of that State, through Chief Justice Campbell, in a well-considered opinion holds, that “A memorandum written under a promissory note and qualifying its obligation Is a part of the contract; and its destruction vitiates the note, even in the hands of an innocent bona fide holder.” Upon the argument of that case, it would seem, from the opinion, that a similar position to that assumed in this was taken by counsel who appeared in favor of the bona fide holder. In reply to that position, the court says: “There seems at first a plausibility in the argument, that a party by signing a note with a separate memorandum beneath, puts it in the power of the holder to gain easier credit for the note, than it would be likely to gain if altered in the body. But, as it was well suggested on the argument, no one is bound to guard against every possibility of felony. And practically, it is a matter of every-day occurrence to feloniously alter negotiable paper as successfully by changes on the face as in any other way. The public are not very much more likely to be defrauded in one way than in another. There can’ never be-absolute safety except by looking to the character and responsibility of the persons from whom such paper is received, and who' are always bound to respond for the consideration if it is forged. Little v. Derby, 7 Mich, 325. If a party makes a contract in such a manner as is authorized by law, he has a right to object to being bound by any other. A bona fide *837holder before.-maturity is allowed-to receive the . genuine contract, discharged from any equities attaching to the contract itself, as between the original parties, but he can not get a contract where none was made.”

The charge of the court complained of in the present case, under the view we take of the law, was not error.- It submitted the proposition fairly, that if the principal procured the surety to sign the note as his .security for the purpose of getting money from the plaintiff, and he did get the money from the plaintiff on the note, but before delivering the same altered it so as to make it read twelve instead of eight per cent., without first obtaining the surety’s consent thereto, or without a subsequent ratification of his act -by the surety, the latter would be released. This we think a sound statement of the law touching the rights of a surety. The jury upon the trial found the facts in his favor, and by their verdict released him from liability. The trial judge, upon the motion for new trial, refused to disturb the verdict, and his ruling upon that point is approved.

Judgment affirmed.

All the Justices concurring.