Court Opinion

ID: 5584747
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:50:10.578638+00
Date Added: 2024-06-11T08:36:12.213948
License: Public Domain

Atkinson, J.
1. Where two or more persons sign a note apparently as joint principals, and there is nothing in the instrument indicating that ' some of the makers are principals and others sureties, in an action by the payee against all the makers as joint principals, one of the makers may plead that under an agreement resting entirely in parol, which was known to the payee at the time the note was signed, he was only a surety for the others; and that he was discharged from liability to the payee by an act of the payee, after execution of the note, which increased the risk of the surety. Bank of St. Marys v. Mumford, 6 Ga. 44; Bank of Lumpkin County v. Justus, 150 Ga. 286 (2) (103 S. E. 794), and cit.
(a) As will appear from the opinions delivered by Judges Warner and Lumpkin in Bank of St. Marys v. Mumford, supra, the ruling as to the effect of the parol agreement was predicated on the theory that such parol agreement did not vary the written contract.
(b) The decision in Bank of St. Marys v. Mumford, supra, by a divided court, distinguished the earlier cases of Stubbs v. Goodall, 4 Ga. 106, and Collins v. Everett, 4 Ga. 266, and construed and applied the act of December 20, 1826 (Acts 1826, p. 99), now Civil Code (1910), § 3556,, and the acts of December 26, 1826, and December 26, 1831 (Acts 1826, p. 38, and Acts 1831, p. 136), now Civil Code (1910), § 3546. And the ruling by the majority was cited and followed in the decision in Bank of Lumpkin County v. Justus, supra, concurred in by all the Justices, and is binding as a precedent upon this court.
2. As a necessary corollary to the ruling announced in the preceding note,' a surety of the character therein mentioned is not limited by the provi*100sions of the Civil Code (1910), § 3556, to relief over against his principal after payment of the debt; nor in a suit by the payee, where the apparent maker pleads that he is surety only and alleges grounds of discharge of liability to the payee, have the provisions of the Civil Code (1910), § 3556, prescribing notice to the principal, any application to such defense.
No. 3607.
December 13, 1923.
3. The ruling announced in the first note is predicated on the theory that the parol agreement does not change the character of the written contract, and hence would not be different if it should appear that the subsequent acts complained of consisted in failure of the payee to comply with a parol promise made to the surety at the time the instrument was signed, but not embodied in the instrument nor alleged to have been omitted therefrom by fraud, accident, or mistake.
4. Where a note of the character mentioned in the first division is executed, and a contemporaneous mortgage is given by the principal to secure the indebtedness represented by the note, it is the duty of the payee to record the mortgage. Failure to record the mortgage will in-
. crease the risk of the surety and operate to discharge him, unless it is affirmatively shown that the omission to record the mortgage did not injure the surety. Civil Code (1910), § 3544; Toomer v. Dickerson, 37 Ga. 428; Phillips v. Bridges, 144 Ga. 703 (87 S. E. 1059).

All the Justices concur.

J. D. Craig miles, for plaintiff in error.
Titus é Delele, contra.