Arkansas Fuel Oil Co. v. Young

• Decision Date: 11 October 1941
• Docket Number: 29069.
• Citation: 16 S.E.2d 909,66 Ga.App. 33
• Parties: ARKANSAS FUEL OIL CO. v. YOUNG.
• Court: Georgia Court of Appeals

16 S.E.2d 909

66 Ga.App. 33

ARKANSAS FUEL OIL CO. v. YOUNG.

No. 29069.

Court of Appeals of Georgia, Division No. 2.

October 11, 1941

W H. Key, of Monticello, and M. F. Adams, of Eatonton, for plaintiff in error.

Sydney H. Baynes, of Monticello, and A. F. Jenkins, of Madison, for defendant in error.

SUTTON,

Judge.

Arkansas Fuel Oil Company sued J. H. Young for $2,000 on a certain contract, a copy of which was attached to the petition and referred to in the petition as a guaranty agreement, the material portions thereof being as follows: "Know all men by these presents, that in consideration of Arkansas Fuel Oil Company, a corporation, *** extending credit to Galloway Oil Company, domiciled in Clarke County, Georgia, in which I am financially interested, for gasoline, petroleum products automobile tires, batteries, and/or automobile accessories, that may be sold and delivered from time to time by said Arkansas Fuel Oil Company to said Galloway Oil Company, and I, J. H. Young, do hereby guarantee the payment of all sums not to exceed two thousand dollars that may become due and payable by said Galloway Oil Company to said Arkansas Fuel Oil Company, and I further promise to pay all of said sums promptly upon demand on or after date of maturity. *** I to be discharged from liability hereunder only by payment to Arkansas Fuel Oil Company, either by me or by Galloway Oil Company of all sums not to exceed two thousand dollars which Galloway Oil Company may owe." It was alleged that the plaintiff furnished to the Galloway Oil Company at various times material and supplies as contemplated in said agreement, that the Galloway Oil Company had failed and refused to pay for the same, that the amount then owing the plaintiff by the Galloway Oil Company was $2,322.48, as per copy of statement of the account attached that the plaintiff had made a demand of the defendant Young for the payment of the sum of $2,000, the extent of the guaranty of the oil company's indebtedness, and that the defendant Young had failed and refused to pay the same.

The defendant demurred to the petition on the grounds: (1) that it failed to set out a cause of action; (a) that the allegation, "and the said Galloway Oil Company has failed and refused to pay for same," was indefinite and insufficient to accelerate the defendant's liability under the guaranty agreement; (3) that the allegation that the plaintiff had made demand on the defendant for the payment of the sum of $2,000, under the guaranty agreement and that he had failed and refused to pay the same was premature and insufficient, as it was not alleged that the Galloway Oil Company was insolvent or unable to respond to any judgment that the plaintiff may obtain against it. The court sustained the demurrers and dismissed the petition, and the plaintiff excepted to that judgment.

1. The defendant in error contends that the instrument here sued on is a contract of guaranty, and not one of suretyship, and that the court properly sustained the demurrer to the plaintiff's petition, because it was not alleged that the Galloway Oil Company, the principal debtor, was insolvent, or unable to respond to any judgment that the plaintiff may obtain against it. A great deal has been written and some confusion has arisen as to the proper distinction to be drawn between a contract of suretyship and one of guaranty. Code, § 103-101, provides: "The contract of suretyship is one whereby a person obligates himself to pay the debt of another in consideration of credit or indulgence, or other benefit given to his principal, the principal remaining bound therefor. It differs from a guaranty in this, that the consideration of the latter is a benefit flowing to the guarantor." In Etheridge v. W. T. Rawleigh Co., 29 Ga.App. 698, 702, 116 S.E. 903, 905, it was said: "A 'contract of suretyship' is where one lends his credit by joining in the principal debtor's obligation, so as to render himself directly and primarily...