26 Ga. App. 792 | Ga. Ct. App. | 1921
(After stating the foregoing facts.) The first question to be determined in this case is, was Holliday an accommodation indorser, a surety? If he was, the second question is, was he liable to the bank on the instrument sued upon in its changed
That the draft when signed by Holliday was for $30 only was testified by him and was not contradicted. Sections 3540, 3543 of the Code of 1910 are as follows: “ The contract of suretyship is one óf strict law, and his liability will not be extended by implication or interpretation.” “ A change of the nature or terms of a contract is called a. novation; such novation without the consent of the surety, discharges him.” In McMillan v. Heard National Bank, 19 Ga. App. 153 (91 S. E. 237), Judge Jenkins said: “The law looks with favor upon the rights of an indorser or surety, and his liability is one of strict law.” In Taylor v. Johnson, 17 Ga. 521, 522(3), it was held: “ The liability of a surety cannot be extended beyond the actual terms of his engagement, and will be extinguished by any act or omission which alters the terms of the contract, unless it be with his consent.” In Bethune v. Dozier, 10 Ga. 238, 239, Judge Lumpkin said: “No principle of law is better settled at this day than that the undertaking of the surety being one stricti juris, he cannot, either at law or in equity, be bound further or otherwise than he is by the very terms of Ms contract ; and that if the parties to the original contract think proper to change the terms of it without the consent of the surety (which is not disputed they have a right to do), the surety is discharged.
The fact that there was nothing in the way the check was drawn to arouse the suspicion of the bank, or that it had no notice of the fraudulent alteration, does not render the surety liable. In Hill v. O’Neill, 101 Ga. 836 (28 S. E. 997), Justice Atkinson said: “ 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 bona fide; 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
It is insisted that Holliday was negligent in indorsing the draft as originally drawn, it being so drawn that it made the forgery easy and hard to be detected, and that the rule, “ when one of two innocent persons must suffer by the wrongful act of another, he must suffer who placed it in the power of such third person to do the wrong,” is applicable. A complete reply to this proposition is that the suggested negligence of the indorser was not the proximate or effective cause of the fraud. Between the time that Holliday indorsed the draft and the time it was paid by the bank a criminal act, a forgery intervened, and the rule just quoted “has never been carried to the extent of making one person civilly liable for the crime of another, and, on principle, we think it can not be.” As was said in O’Neill v. Hill, supra, “No one is bound to guard against every possibility of forgery.”
The evidence demanded the verdict, and the court did not err in directing it or in overruling the motion for a new trial.
Judgment affirmed.