51 Ga. App. 798 | Ga. Ct. App. | 1935
The Citizens Bank and Trust Company filed suit against the estate of Mrs, Bertha Schroder, deceased, on a certain contract of guaranty as follows: “For a valuable consideration to the undersigned in hand paid by you, the undersigned hereby guarantees to you the payment of any and all debts and/or liabilities of Martin Schroder & Co., incurred prior to the signing of this guaranty and now outstanding, or which are now due or which may be from time to time hereafter created, contracted, or incurred, however and in whatever manner the debts or liabilities of Martin Schroder & Co. to you may have been or may be created, contracted, incurred, or evidenced; also any and all renewals, in whole or in part, of any and all obligations, present or future, of Martin Schroder & Co. This guaranty is and shall be an open, unconditional, and continuing one to the extent, at any and all times, of $10,000.00, and shall not be considered as wholly or partially satisfied by the payment at any time of any sum of money for the time being due on any debt or liability, and shall stand as an absolute, unconditional, and continuing guaranty at all times up to amount named, until ten days after written revocation by undersigned has been received by you; but said revocation shall not affect this guaranty as to any debt or liability existing prior to the expiration of said ten days. The undersigned agrees that you may grant time or other indulgence to or compound with Martin Schroder & Co., or any person or persons, partnership, or corporation, liable on any bill, note, or other paper or obligation or guaranty held by you, without affecting or impairing this guaranty; and any and all amounts received by you may be applied as payments in gross, without any right on the part of the undersigned to stand in your place, until you have received the full amount of
The plaintiff alleged that Mrs. Schroder died on June 23, 1933, and that at the time of her death Martin Schroder & Co. were indebted to plaintiff in the sum of $7,560, guaranteed by said contract and evidenced by four promissory notes set out and described in the petition; that since the death of Mrs. Schroder, Martin Schroder & Co. have paid to plaintiff the sum of $1480; and that there remains a balance of $6080 due plaintiff by reason of said contract of guaranty. Defendants answered, in effect, that the contract of guaranty was executed, but that all the indebtedness guaranteed therein had been paid and discharged by reason of the fact that on August 23, 1933, two months after the death of Mrs. Schroder, the plaintiff received from Martin Schroder & Co. a demand note for $7080, the proceeds of which note were credited to the account of Martin Schroder & Co., and thereupon Martin Schroder & Co. gave to plaintiff a check for $7720.94, which check paid the entire amount due, principal and interest, on the four notes; that this note was a new obligation of Martin Schroder & Co., was accepted as such, and after the death of the guarantor was discharged by the acceptance of the demand note under section 103-202 of the Code of 1933, which amounted to a change in the obligation, which could not be made binding on guarantor after the death of the guarantor, and the acceptance of the demand note amounted to a discharge of the surety or' guarantor. It was also pleaded that such demand note, by an oral understanding of the parties, was in effect a contract of extension for a definite time.
In the evidence and agreed statement of facts the contract of guaranty was admitted, as well as the date of the death of Mrs. Schroder, and the facts that Martin Schroder & Co. were indebted
The general rule is that a guaranty, continuing in its nature and based upon a divisible consideration, such as the one here in question, is revoked as to subsequent advances by notice of the death of the guarantor, unless there is an express provision to the contrary. 1 Brandt Suretyship & Guaranty (3d ed.) § 152. The question presented is whether the obligation guaranteed was paid by the transaction of August 23, or whether the transaction of August 23 amounted to a novation of the contract or such renewal as would discharge the guarantor. The plaintiff in error contends that the original indebtedness evidenced by the four notes had been paid, that the evidence at least warranted submission of that issue to the jury, and that the direction of the verdict for the plaintiff was error. Did the bank by the transaction of August 23 accept payment of the obligation represented by the four notes which were guaranteed under the contract, or did- this transaction amount to a renewal of the obligation, and did the trial judge err in direct
We do not think there was any evidence to show that there was any extension of the original obligation for a definite time, and
The taking of a demand note is not such an extension of time as would release the guarantor in this case, for a demand note is instantly due, and can be sued on at the moment when delivered. Johnson v. Learie, 100 Vt. 308 (137 Atl. 205); Mercantile Trust Co. v. Donk, (Mo.), 178 S. W. 113; Bottineau County Bank v. Stafford, 49 N. D. 942 (194 N. W. 393). The evidence in this case fails to show that there was any contract that the obligation was extended for any length of time. See Bunn v. Commercial Bank, 98 Ga. 647 (26 S. E. 63); Conn v. Simpson Grocery Co., 21 Ga. App. 284 (94 S. E. 260). In fact there was no evidence of an extension of time by the creditor after the death of the guarantor. The taking of the demand note and the crediting of the amount thereof and the giving of a check by the debtor did not amount to a novation and extinguishment of the original obligation, so as to discharge the guarantor. We do not think the principal was discharged on the original notes, for it was expressly recited in the demand note that the original notes were held by the creditor as collateral. The indebtedness on the original notes is
Judgment affirmed.