Bank v. Fickett

• Decision Date: 25 March 1905
• Citation: 122 Ga. 489,50 S.E. 396
• Parties: LOWRY NAT. BANK. v. FICKETT et al.
• Court: Georgia Supreme Court

122 Ga. 489

50 S.E. 396

LOWRY NAT. BANK.

v.FICKETT et al.

Supreme Court of Georgia.

March 25, 1905.

EVIDENCE—BOOKS OF BANKRUPT CORPORATION —CONTRACT OF GUARANTY—RENEWAL NOTES—NONSUIT.

1. Books of a corporation which has been adjudicated a bankrupt under the bankrupt act of 1898, produced in court by the trustee, and appearing upon their face to be the books of such corporation, and to be free from suspicion of fraud, are prima facie identified as the books of the corporation, and are admissible in evidence in favor of one seeking to establish a right against it.

2. The plaintiff, having elected in its petition to treat the transaction on account of which it sought to hold the defendants liable as a renewal of existing indebtedness to the plaintiff cannot recover if it appears that such transaction was not in law a renewal.

[Ed. Note.—For cases in point, see vol. 39, Cent. Dig. Pleading, §§ 1300-1342.]

3. The term "renewal, " as applied to promissory notes, means "the re-establishment of the particular contract for another period of time."

4. An undertaking to be liable only in the event that another person fails to pay cannot, in law, be a renewal of an obligation to pay absolutely and at all events, without reference to the liability of another.

5. Whether the case be considered in the light of the evidence admitted or in the light of that admitted and rejected, the allegations of the petition were not supported, and there was no error in granting a nonsuit.

(Syllabus by the Court.)

Error from City Court of Atlanta; H. M. Reid, Judge.

Action by the Dowry National Bank against R. N. Fickett and others. Judgment for defendants, and plaintiff brings error. Affirmed.

The Lowry National Bank sued Fickett and others as guarantors to recover $1,333.34 principal, besides interest. The contract of guaranty declared on recited that the defendants were stockholders In the R. N. Fickett Paper Company, a corporation; that that company was indebted to the plaintiff in a large sum, evidenced by its promissory notes; that the company might desire to increase its indebtedness; and that the plaintiff was unwilling to extend further credit, unless the defendants would guaranty the payment of the present indebtedness and the repayment of all advances made thereafter. The contract then provided that the defendants would "guaranty the said bank the repayment in full in accordance with the tenor and evidence of the notes now in existence or any renewal of same and notes or evidences of indebtedness as may be taken to represent any and all advances which the said Lowry National Bank shall hereafter make to the said R. N. Fickett Paper Company from time to time as long as this agreement shall be in force, including all renewals or extensions which may be made for any advance so made, " and that the bank might "grant any extension for all renewals for advances" without notice to or the consent of the defendants. The corporate name of the paper company was afterwards changed to the Georgia Paper Company. After the execution of the contract above referred to, the bank discounted a nonnegotiable note, payable to the Georgia Paper Company, for $1,333.34, principal. This note was indorsed: "Georgia Paper Company, per Jno. B. Richards, Jr." The petition alleged that this note and two others of like amount were "taken in renewal of the four thousand dollars ($4,000.00) balance of indebtedness due by said paper company to petitioner." There was evidence from which it might have been inferred either that the note was taken in settlement of an existing indebtedness, or, possibly, that the amount of the note was paid to the company as an advance; and one of the officers of the bank testified that the note was given to it "in renewal" of indebtedness then existing. The court granted a nonsuit, and the plaintiff excepted, assigning error upon the order granting the nonsuit, upon the rejection of the note above referred to, and upon the rejection of certain books which it was claimed were the books of the Georgia Paper Company, in the custody of the trustee in bankruptcy for that corporation.

Anderson, Anderson & Thomas, for plaintiff in error.

Candler & Thomson, W. D. Thomson, Felder & Rountree, and J. C. Tapp, for defendants in error.

COBB, J. 1. As a general rule, the books of a corporation cannot be received to establish a right in the corporation against third persons, but they may be used for the purpose of showing the regularity and legality of corporate proceedings, and thereby establish a right against one of the members, and of course may be used to establish a right against the corporation itself. Hall v. Carey, 5 Ga. 243; 5 Enc. Ev. 609, 610. Such books being required by law to be kept, and the entries therein being of public interest, and being made under the sanction of a legal duty, are recognized by law as evidence in certain cases. Their admission in evidence is, however, dependent upon their being properly identified as the books of the corporation. They may be so identified in various ways. The books do not prove themselves, but when they are produced by an officer of the corporation, who is shown to be the proper custodian of the books, and who testifies that they are the original books, and the court by inspection becomes satisfied that there is nothing in the books to raise a suspicion of fraud, the identification is sufficient...