American Sur. Co. of New York v. Garber
| Decision Date | 31 October 1966 |
| Docket Number | Nos. 42173,No. 1,42174,s. 42173,1 |
| Citation | 151 S.E.2d 887,114 Ga.App. 532 |
| Parties | AMERICAN SURETY COMPANY OF NEW YORK v. A. E. GARBER. A. E. GARBER v. AMERICAN SURETY COMPANY OF NEW YORK |
| Court | Georgia Court of Appeals |
Smith, Ringel, Martin & Lowe, Hoke Smith, Atlanta, for appellant.
Kilpatrick, Cody Rogers, McClatchey & Regenstein, Louis Regenstein, Jr., Thomas E. Joiner, Atlanta, for appellee.
Syllabus Opinion by the Court
1. 'Any change in the nature or terms of a contract is called a novation; such novation, without the consent of the surety, discharges him.' Code § 103-202. Little Rock Furn. Co. v. Jones & Co., 13 Ga.App. 502(1, 2) 79 S.E. 375; Alropa Corp. v. Snyder, 182 Ga. 305, 315(3), 185 S.E. 352.
2. As applied to a promissory note 'renewal' means the re-establishment of the particular obligation for an additional period of time. While there may be a change in the parties or an increase in the security, there is no renewal in this sense unless the obligation remains the same. Lowry Nat. Bank v. Fickett, 122 Ga. 489, 492, 50 S.E. 396; King v. Edel, 69 Ga.App. 607, 612, 26 S.E.2d 365.
3. One who takes a negotiable promissory note by assignment after maturity and with notice of its dishonor is not a holder thereof and takes it subject to all the outstanding equities and defenses available against the original payee thereof.
4. In a suit against an accommodation endorser brought by a transferee by assignment of a promissory note in the principal amount of $13,000, where it appeared without dispute that when that note matured the debtor paid $1,000 on the principal and all accrued interest and other charges; that the creditor thereupon surrendered the note used on to the principal debtor marking it 'cancelled by renewal' and took a new note signed by the defendant as an accommodation endorser extending the time for the maturity of the obligation for an additional 90 days at the same rate of interest, and where thereafter at various intervals extending over a period of some 2 years the principal debtor paid the accrued interest and charges on the indebtedness, and on each occasion gave to the creditor a new note in the amount of $12,000 purportedly endorsed in the same capacity by the defendant, and received the old note marked 'cancelled by renewal' in exchange therefor, and where more than a year after the defendant last affixed his signature to any such additional note the plaintiff advanced to the principal...
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...§ 103-202, 103-203. A novation under the statute is "a change in the nature and terms of the contract." American Surety Company of New York v. Garber, 114 Ga. App. 532, 151 S.E.2d 887. A surety is discharged even though he is not injured by the contract change. Alropa Corporation v. Snyder,......