Syllabus by the Court.
A
guarantor cannot be joined in the same suit against the
principal debtor. Holmes v. Schwab, 141 Ga. 44(3)
80 S.E. 313; Manry v. Waxelbaum, 108 Ga. 14, 17, 33
S.E. 701; Sims v. Clark, 91 Ga. 302 (1), 18 S.E
158; Geiser Mfg. Co. v. Jones, 90 Ga. 307, 17 S.E
81; Musgrove v. Luther Pub. Co., 5 Ga.App. 279, 63
S.E. 538; Ga. Casualty Co. v. Dixie Trust Co., 23
Ga.App. 447 (2), 98 S.E. 414.
The
contract on which the defendant was sued, as a surety, with
the principal debtor, must be construed as one of guaranty.
Additional Syllabus by Editorial Staff.
A
"contract of suretyship" is one whereby a person
lends his credit by joining in principal debtor's
obligation so as to render himself directly and primarily
responsible with the principal, and on the same contract
without reference to the principal's solvency.
As
promise of principal and surety is one and the same, and
their liability is joint and several, they may be joined in
the same action.
"Contract
of guaranty" exists when one lends his credit for the
benefit of another, but under obligation separate and
distinct from that of the principal debtor, whereby he
renders himself secondarily or collaterally liable in case of
principal's inability to perform his own contract.
As
guarantor usually becomes bound before or after principal,
and guaranty must be founded on consideration and cannot be
presumed founded on that supporting principal's
independent promise, it is usually founded on new or
independent consideration flowing directly to guarantor, as
stated in Civ. Code 1910, § 3538, but this need not always be
the case.
Error
from Superior Court, Barrow County; Blanton Fortson, Judge.
Action
by the W. T. Rawleigh Company against R. A. Etheridge.
Judgment for plaintiff, and defendant brings error. Reversed.
W. T.
Raleigh Company (successor to the W. T. Raleigh Medical
Company) brought a joint action against Hudgins as principal
and Etheridge as surety, on a writing signed by Hudgins,
which is as follows:
"Contract.
(1) This agreement made this 22d day of October, A. D. 1913,
at Freeport, Illinois, between the W. T. Rawleigh Medical
Company, party of the first part, hereinafter called the
company, and O. W. Hudgins of Perry, Georgia, party of the
second part, witnesseth:
(2) That for and in consideration of the promises and
agreements hereinafter contained, to be kept and performed by
the party of the second part, the company, unless prevented
by strikes, fires, accidents or other causes beyond its
control, promises and agrees to sell and deliver to the party
of the second part f. o. b. cars at Freeport, Illinois, or,
at its option, any other regular place of shipment, in such
reasonable quantities as the party of the second part may
from time to time order, all medicines, extracts, and other
products manufactured or sold by it, such goods to be sold
and delivered to the party of the second part at the usual
and customary wholesale list prices, such prices to be shown
by invoice of each shipment.
(3) At its option the company will also sell party of the
second part, partly or entirely on credit, a medicine wagon,
such as said party of the second part may choose from current
catalogue, circulars, or other descriptions, and charge said
wagon to his account at its customary credit price less any
cash payment said second party may make.
(4) The company further agrees to repurchase from said party
of the second part, at any time during the term of or
promptly after the termination or expiration of this
contract, and at the wholesale prices then current, such
medicines, extracts, and other products of its manufacture as
he may then have on hand, in as good salable condition as
when originally sold to him, on return of such products
promptly by prepaid freight to Freeport, Illinois, or
such other regular factory shipping point as may be
designated by the company in writing, and provided that said
second party will pay the company's actual expense of
receiving, in specting, and overhauling all such goods.
(5) The party of the second part promises and agrees to pay
the company at wholesale prices f. o. b. cars at Freeport,
Illinois, or other regular place of shipment as aforesaid,
for all medicines, extracts, and other products furnished him
from time to time, including any balance due on wagon, as
hereinbefore provided, by weekly payments, and at the
termination or expiration of this agreement, for whatever
cause, said second party further
promises and agrees to pay in cash the balance due said
company on account for all medicines, extracts, other
products, and wagon sold and delivered to him, as
hereinbefore provided. But the time of making such payments
or any or all of them may be extended by said company without
notice to the guarantors of this agreement, and without
prejudice to the interest or rights of said company.
(6) It is further understood and agreed that if said party of
the second part pays his account in full on or before the
fifteenth day of each month, he will be allowed a cash
discount of three per cent. (3 per cent.) from the usual and
customary wholesale list prices.
(7) And it is further agreed between the parties hereto that
this contract is subject to acceptance at the home office of
said company in Freeport, Illinois, and that unless
previously terminated for any reason by either party upon
written notice, shall expire by limitation December 31, 1914.
(8) At the expiration of this contract the company hereby
agrees to make a new contract, if signed by acceptable
guarantor, with said party of the second part without
requiring his account to be paid in full at that time,
provided the amount of his purchases and the condition of his
account has been satisfactory to said company.
(9) And it is further agreed by and between the parties
hereto that this agreement constitutes and shall constitute
the sole and entire agreement by and between the parties
hereto, unless wholly canceled, revoked, or modified by the
expressed written agreement of the parties hereto, to which
has been affixed the corporate seal of the party of the first
part.
(10) In testimony whereof the party of the first part has
caused this agreement to be executed in its corporate name by
its president and its corporate seal to be hereunto affixed;
and the said party of the second part has hereunto set his
hand and seal the day and year first above written. [
[Signed] The W. T. Rawleigh Medical Company, by W. T.
Rawleigh, President. [ [Corporate Seal.] O. W. Hudgins,
Second Party. [ Seal.]"
Following
this is a writing signed by the defendant, which is as
follows:
"For and in consideration of the extension of further
time in which to pay his account for goods previously sold to
the above party of the second part, and in further
consideration of the W. T. Rawleigh Medical Company extending
further credit to him, we, the undersigned, do hereby jointly
and severally guarantee unto said the W. T. Rawleigh Medical
Company, unconditionally, first, the payment in full of the
balance due said company on account as shown by its books at
the date of the acceptance of this contract; and second, the
full and complete payment to said company of any and all
indebtedness incurred under the terms of the within
instrument by the party of the second part, named as such
therein, to which terms we fully assent, waiving acceptance
of this guaranty and all notice, and agree that the written
acknowledgment of his account, or any judgment against said
party of the second part, shall, in every respect, bind and
be conclusive against the undersigned, and that any extension
of time shall not release us from liability under this
guaranty.
Responsible men sign below in ink or indelible pencil.
Names.
Occupation. P. O. Address.
M. A.
Brown. [Seal.] Farming. Auburn, Ga.
R. A.
Etheridge. [Seal.] Farming. Auburn, Ga.
The above guarantors are entitled upon request at any time to
a statement of principal's account."
Etheridge
demurred to the petition, on the ground that, as the contract
sued on showed that it was one of guaranty and not of
suretyship, he could not be joined in the same suit with the
principal. The court overruled the demurrer. On the trial the
judge limited the issue, so far as the defendant Etheridge
was concerned, to the amount for which he was liable under
his contract, construed to be that of suretyship. The court
directed a verdict for the plaintiff. The case came to this
court on exceptions by Etheridge to the overruling of his
demurrer and to the refusal of his motion for a new trial.
Russell & Chandler, of Winder, for plaintiff in...
