Opinion ID: 396223
Heading Depth: 1
Heading Rank: 2

Heading: The indebtedness

Text: 12 In Georgia when two or more persons sign as co-makers of a promissory note they are jointly and severally liable unless the instrument in its own language specifies the obligation differently. Heard v. Tappan, 116 Ga. 930, 43 S.E. 375 (1903), Ghitter v. Edge, 118 Ga.App. 750, 165 S.E.2d 598 (1968). The holder of the note can proceed against any of the makers without joining the others. Bell v. Citizens & Southern National Bank, 151 Ga.App. 126, 258 S.E.2d 774 (1979). The holder can proceed against an accommodation maker without any resort to his principal, Murphy v. Bank of Dahlonega, 151 Ga.App. 264, 259 S.E.2d 670 (1979), even if the holder of the note knows that the party signed as an accommodation maker. Kerr v. DeKalb County Bank, 135 Ga.App. 154, 217 S.E.2d 434 (1975). Even if all parties to the transaction understand that a party signs solely as an accommodation party, the accommodation party's liability is still determined by the capacity in which he signed the instrument. Smith v. Singleton, 124 Ga.App. 394, 184 S.E.2d 26 (1971). L. T. Moore signed the notes as maker; therefore, whether he signed as a joint debtor or merely as an accommodation maker, he and now his estate are primarily liable to PCA or its assigns for the indebtedness, as is Bobby Moore individually. 13 One who discharges a note can call on his joint debtor for contribution. The right arises upon an implied contract on the joint debtor's part to bear his share of the debt. Powell v. Powell, 171 Ga. 840, 156 S.E. 677 (1931). Likewise an accommodation party can recover on the implied promise of the accommodated party to indemnify him. Turner v. Thompson, Kendrick & Co., 23 Ga. 49 (1857). The liability between principals is not based on the underlying notes but on the inducement to the action. 8 Id. The paying party is entitled to proceed in equity against the other principal at any time after the debt has fallen due even if he has not yet been served. Ga.Code Ann. § 103-301; Cooper v. National Fertilizer Co., 132 Ga. 529, 535, 64 S.E. 650, 653 (1909). The estate therefore has a right to be indemnified by Bobby Moore individually if L. T. Moore signed as an accommodation maker or a right to receive contribution from Bobby Moore individually if he (L. T. Moore) signed as joint debtor. Usually joint debtors are equally liable, but, upon highest equitable principles, if there is an inequality of benefits the debtors contribute not equally but in proportion to the respective benefits accruing to each joint debtor from the proceeds. Davis v. Perkins, 178 Ga. 195, 172 S.E. 562 (1934). 14 On remand the district court must determine whether as between the parties L. T. Moore signed as a joint debtor or merely as an accommodation party and whether L. T. Moore as an inter vivos gift agreed not to seek contribution or indemnification for paying off the indebtedness. If as a result of these determinations Bobby Moore individually is liable to the estate any amount received by the estate in discharge of such liability will become part of the residuum. 9 If the residuum is sufficient to discharge the PCA debt Lindsey and the Cook County land will be exonerated. Ga.Code Ann. §§ 113-821, 113-1509. If the residuum is not sufficient Lindsey, as devisee of the encumbered Cook County property, must bear the burden of the encumbrance. Raines v. Shipley, 197 Ga. 448, 29 S.E.2d 588 (1944).