22 Ga. App. 417 | Ga. Ct. App. | 1918
Lead Opinion
1. Where a negotiable promissory note purports to have been given -“for value received,” and suit is brought thereon by the payee, the maker may plead, and prove by parol, that the note was executeá without consideration as between the parties, and for the sole purpose of enabling the payee to indorse 'it to a third person as collateral security for a debt which the payee desired to contract and which he promised to pay without assistance from the maker of the note. Such a note is a mere accommodation paper, and, while in the hands of the person to be accommodated, is without consideration and binds nobody.
2. The court did not err in overruling the demurrer to the plea setting up such a defense.
3. Under the conflicting evidence, it was for the jury to say whether or not the defendant had established her plea; and therefore the court * erred in directing a verdict for the plaintiff.
•Judgment reversed on the main hill of exceptions, and affirmed on the cross-hill.
Concurrence Opinion
'concurring specially. Being originally doubtful as to the. correctness of the rule announced in the first of the foregoing headnotes, and having held back a decision of the case in order that I might give a more careful consideration to the question involved I desire to state wherein, as I saw it, the difficulty of the proposition lay, and why I have finally reached the same' conclusion arrived at by the other members of the court. It is a well-recognized principle of law that, as between the original parties, the consideration of a contract is .ordinarily open to inquiry for the purpose of showing either that the consideration was originally illegal and the resultant promise therefore void, or that the consideration has subsequently failed in whole or in part, so as no longer- to support the promise as made. Not only does this rule apply where the consideration of the instrument is ambiguous upon its face, but, even though the consideration should be set forth in the writing, it is still permissible as a matter of defense to plead by way of failure of consideration a breach of a contemporaneous oral warranty, provided the instrument does not purport to integrate within itself the terms of the agreement. Pryor v. Ludden & Bates, 134 Ga. 288 (67 S. E. 654, 28 L. R. A. (N. S.) 267); Bond v. Perrin, 145 Ga. 200 (88 S. E. 954), s. c. 18 Ga. App. 179 (89 S. E. 79). It has also been uniformly held that one is not precluded from showing by parol that the real consideration of a contract is in fact different from the one actually recited in
But while all this is true,, and although great latitude is thus allowed in attacking the legality of a promise by proving it to be unsupported by any valid and legal consideration, it is never allowable, under the guise of inquiring into the consideration, to vary or contradict by parol the written terms of the promise itself. Brewer v. Grogan, 116 Ga. 60 (42 S. E. 525); Byrd v. Marietta Fertilizer Co., 127 Ga. 30 (56 S. E. 86). Thus, while the validity of an unconditional promise in writing may be attacked on the ground that it is not supported by á valid consideration, such an inquiry into the consideration can not be used as a pretext to alter or in any way to vary the express terms of the promise itself. As was said by Judge McCay in the case of Boynton v. Twitty, 53 Ga. 214, and quoted by Mr. Justice Cobb in Byrd v. Marietta Fertilizer Co., supra, “It is sometimes difficult to say when the parol evidence offered is mere explanation of the consideration, and when it is an attempt to attach a condition to the contract; and it is hard to reconcile all the cases, for this reason. The line of distinction is often so dim that one mind sees the case on one side of it, and another mind sees it on the other. Without doubt, you may always, in the case of a promissory note, show by parol what was the true consideration; that is, what the maker got, or
In the instant case whát is the purport of the plea? Is it intended simply to deny the binding effect of an admitted unconditional promise in writing, for the reason that the promise is unsupported by any lawful consideration as between the parties; or does it go further, in that it must also necessarily seek to vary the explicit terms of the written instrument by showing that the absolute promise to pay does nót itself speak the truth of the contract, but that the true purpose of the agreement was one which it was never intended should be embraced within the terms of the note as sued on? In the ease of Boynton v. Twitty, supra, it was held that the defendant should be allowed to prove that the note sued on was not for any consideration which passed or which existed at the time it was given, but was executed for the purpose of indemnifying plaintiff against loss in a certain partnership business, and that he had suffered no loss. In that case Judge McCay concludes his opinion by saying that such a - transaction stands on the footing of a note or acceptance placed as collateral to cover future advances, in which cases the note is good only for the amount of the advances. But this holding in the Boynton case is doubted and criticised in the Byrd case. In the latter case the ruling in the headnote is as follows: “To an action against the maker of negotiable promissory notes, a plea that he executed them with the understanding that he was not to be bound and that the notes were simply security for payments of the proceeds of a sale of an article which the plaintiff claimed had been sold to the .defendant and the notes taken for the purchase-price, and the defendant claimed was simply in his possession as the property of the plaintiff to be sold for his account, constituted no defense-to the action,, when there was no denial that the notes were made
The same principle was discussed by Chief Justice Bleckley in the case of Hirsch v. Oliver, 91 Ga. 554 (18 S. E. 354), wherein this learned jurist used the following language: “The plea which sought to contradict the notes by setting up an understanding that the maker was not to be bound, that the notes were executed for a purpose other than that of binding him to pay money—a purpose wholly at variance with their plain tenor and effect, contained no suggestion that the understanding and purpose alleged were evidenced by any writing, or that anything was omitted from the notes
It would seem to be the position of counsel for the plaintiff in error that the question -involved in the instant ease can not be stated so narrowly as it is thus sought to do. The underlying principle which, he seeks to invoke is that “If the contract sought to be set up in defense is not one of a kind that the parties intended should be embraced or integrated in the written contract, or that could not properly have been embraced in that contract without defeating its purpose,” then the general rule that parol evidence is inadmissible to vary the terms of a written contract
