Bunn v. Commercial Bank Of Cedartown

• Decision Date: 10 August 1896
• Parties: BUNN. v. COMMERCIAL BANK OF CEDARTOWN.
• Court: Georgia Supreme Court

26 S.E. 63

98 Ga. 647

BUNN.

v.COMMERCIAL BANK OF CEDARTOWN.

Supreme Court of Georgia.

Aug. 10, 1896.

Extending Time on Note — Release of Surety — Contribution — Instructions — Harmless Error.

1. An agreement by the holder and owner of a promissory note with the maker of the same to extend the time of its payment for an indefinite period, though based upon a valuable consideration, does not discharge a surety on such note from liability. As such an agreement would not prevent the immediate bringing of an action, the making of it really amounts to no more than "a mere failure by the creditor to sue as soon as the law allows, or negligence to prosecute with vigor his legal remedies, " and it therefore stands upon an entirely different footing from an extension for a definite period. In the former case, a surety may at any time pay the debt, and proceed to enforce the same against his principal, and he may also proceed against the co-sureties, if any, for contribution. In the latter, he cannot do this, and consequently his risk is increased, and he is discharged. (a) The syllabus in the case of Bank v. Postell, 22 S. E. 942, 97 Ga. 331, applied to the facts appearing in the official report, amounts, in effect, to a holding that an agreement to extend the time of payment for an indefinite period would discharge a surety. That case was decided erroneously, because this court dealt with it as if the extension had been for a fixed time, overlooking the fact that it was for an indefinite period. Upon a review thereof, the doctrine apparently laid down in that case is overruled.

2. Though the charge on the subject of ratification, of which complaint is made in the motion for a new trial, may have been unauthorized, it could have resulted in no legal injury to the plaintiff in error, for the reason that, under the pleadings and evidence, and in view of the law applicable, a verdict against him was the only proper result of the trial.

(Syllabus by the Court.)

Error from superior court, Polk county; C. G. Janes, Judge.

Action by the Commercial Bank of Cedar-town against W. C. Bunn, administrator of the estate of A. G. West, deceased, and another. Prom a judgment against him, the administrator brings error. Affirmed.

Broyles & Son and J. M. King, for plaintiff in error.

Blance & Fielder and Colville & Noyes, for defendant in error.

LUMPKIN, J. 1. This case and that of Bank v. Postell both grew out of an action by the bank against the latter and the administrator of A. G. West. In the lower court, there was a verdict in favor of Postell and against the administrator. The bank sued out a writ of error to reverse the judgment in favor of Postell, and the administrator a separate writ of error seeking to reverse the judgment rendered against him. Both cases were before this court at the March term, 1895. The case in which the bank was the plaintiff in error was decided at that term (97 Ga. 331, 22 S. E. 942), and the other was continued. In looking into the latter, which is the case now in hand, we have reached the conclusion that the former was decided erroneously. The syllabus contains nothing to indicate the error into which this court fell, but, when read in connection with the official report, it will be perceived that it in effect amounts to a holding that an agreement by the holder and owner of a promissory note to extend the time of payment for an indefinite period will discharge a surety. This court was not mistaken as to the law, because it dealt with the case as though the extension had been granted for a fixed time. The error committed resulted from overlooking the fact, as shown by the evidence, that the extension was really for an indefinite period. Apparently, however, we laid down a doctrine which is erroneous, and to that extent the decision then made is overruled. Both these cases at last depend upon the question whether or not an agreement, upon a valuable consideration, by the holder and owner of a promissory note, with the maker of the same, to extend the time of its payment for an indefinite period, will discharge a surety on such note from liability. We are quite sure that this question should be answered in the negative. The rule, and the reason for it, are thus stated in the...