Herron v. Interstate Life &

• Decision Date: 18 March 1937
• Docket Number: No. 25922,25922
• Parties: HERRON . v. INTERSTATE LIFE & ACCIDENT CO.
• Court: Georgia Court of Appeals

55 Ga.App. 534

190 S.E. 631

HERRON .

v.INTERSTATE LIFE &

ACCIDENT CO.

No. 25922

Court of Appeals of Georgia,

Division No. 1.

March 18, 1937.

.

Syllabus by the Court.

1. "A husband and wife may legally enter into a joint contract or undertaking the consideration of which passes to them jointly, and in that event the wife will be bound." Braswell v. Federal Land Bank of Columbia, 165 Ga. 123, 139 S.E. 861.

2. Where a joint note is executed by a husband and a wife for a consideration of money afterwards to be advanced or furnished by the payee, "if with the knowledge of the payee, the entire consideration is to go only to the husband, and passes only to him, the husband 'is the real primary debtor and the wife, [being] in the position of a surety, ' is not liable for any part of the joint note." Daniel v. G. Ober & Sons Co, 52 Ga.App. 691, 184 S.E. 439.

3. "But, where the husband and wife, in a partnership or joint undertaking, unite their credit in the execution of a joint note, and the money, goods, or other consideration passes to them jointly without division, they are both liable as joint debtors for the full amount of the note." Daniel v. G. Ober & Sons Co, supra.

4. Where the husband and the wife sign a note jointly as joint principals, and there is nothing in the note to show that one is surety for the other, the presumption is that both are liable as joint principals.

5. And where the husband and the wife thus apparently unite their credit in the execution of a joint note and where the creditor at the time the debt is created really intends in good faith to credit the husband and the wife jointly as principals, and not the husband as principal and the wife as surety, and the consideration for their promise passes legally and morally to the husband and the wife jointly without division, and where the writing executed is such as purports to bind them for the debt as their joint debt, then, whatever may be the private understanding between the wife and the husband in which the creditor is not concerned and in which he has no interest as to the disposition, by either the husband or the wife or both of them, of the consideration so received by them, the writing is to be treated as embracing the true substance of the contract.

6. The evidence supported the verdict.

Error from Superior Court, Catoosa County; C. C. Pittman, Judge.

Suit by the Interstate Life & Accident Company against E. D. Herron and Eva G. Herron. Judgment for plaintiff, and defendant last named brings error.

Affirmed.

R. Carter Pittman, of Dalton, for plaintiff in error.

McClure, McClure & Head, of Ringgold, for defendant in error.

MacINTYRE, Judge.

The Interstate Life & Accident Company filed suit against E. D. Herron and Eva G. Herron, husband and wife, on a promissory note, apparently signed by both defendants as makers, and which was secured by a deed to certain realty, signed by both defendants, which, plaintiff alleged, was given for money borrowed by the defendants. The plaintiff prayed for a judgment and that the same be declared a special lien against the real estate. The husband filed no defense. The wife answered and denied that she was due the plaintiff anything, setting up that she signed the note and deed as surety for her husband, that she owned the real estate in fee simple, and her husband had no interest or title therein, and that she received no part of the proceeds of the loan represented by said note and security deed. The case came on for trial, and resulted in a verdict in favor of the plaintiff. The wife moved for a new trial on the general grounds, and by amendment added certain special grounds, and to the judgment overruling her motion she excepted.

On January 23, 1919, J. H. Adams executed a deed to part of lot 61, Ninth district and Fourth section, Catoosa county, Ga. (the home place, the land involved in this litigation), to E. D. Herron and wife, Eva G. Herron. On August 28, 1922, E. D. Herron executed a deed to his interest in this land to his wife, Eva G. Herron, and the title to said lands was still vested in her on June 16, 1927.

On June 16, 1927, E. D. Herron and wife, Eva G. Herron, executed a security deed conveying this land to the Hamilton Trust & Savings Bank of Chattanooga, Tenn, to secure a note of that date, payable to the order of the Hamilton Trust & Savings Bank, in the principal sum of $17,000 due June 16, 1930, and signed by E. D. Herron and Eva G. Herron.

On the delivery of the deed and note above set out, the Hamilton Trust & Savings Bank delivered to the makers thereofits check in the sum of $16,490 (the net proceeds of the loan), payable to the order of-E. D. and Eva G. Herron. This check was indorsed by E. D. and Eva G. Herron. Mr. Herron admits his indorsement. Neither Mr. nor Mrs. Herron deny that she indorsed it personally, both saying they do not remember. Mrs. Herron says it might be her personal indorsement, she does not remember. While he says he might have indorsed for her, but if he did he had authority. On Mr. Herron's instructions, it was deposited to the credit of the account of E. D. Herron in the Hamilton National Bank (the Hamilton Trust & Savings Bank was a subsidiary of the Hamilton National Bank). The account to the credit of which this check was deposited was one which was maintained in the Hamilton National Bank and equally subject to the check of both E. D. Herron and Eva G. Herron.

On or about June 22, 1927, the Hamilton Trust & Savings Bank sold this Herron loan to the Interstate Life & Accident Company and transferred the note to the company, and received its check in the sum of $16,561.23 therefor.

Later, desiring to increase this loan, E. D. Herron and his wife, Eva G. Herron, on December 27, 1927, executed a note to the order of Interstate Life & Accident Company in the sum of $20,000, due December 27, 1930, bearing interest at 6 per cent., and executed and delivered their security deed to the lands heretofore described to the Interstate Life & Accident Company to secure said note.

The check of the Interstate Life & Accident Cornpany, dated December 31, 1927, payable to E. D. Herron in the sum of $20,000 was delivered to E. D. Herron, by him indorsed and turned over to Mr. F. L. Underwood, treasurer of the insurance company, who was looking after the loan, and from the proceeds of this check the former loan with accrued interest was paid off and papers canceled, and a check for $2,973.48, the net balance, given to E. D. Herron on January 4, 1928. This check was indorsed by E. D. Herron and deposited in the account of the Hamilton National Bank, where it was subject to withdrawal by the check of either E. D. Herron or Eva G. Herron.

The fact that the Hamilton National Bank and Hamilton Trust & Savings Bank and Interstate Life & Accident Company were variously involved in the trans action is of no legal consequence, for the reason that F. L. Underwood was the vice president of each of these companies and transacted all the business and was the agent of the three principals. The knowledge of the dual agent is imputable to both principals. Carlton v. Moultrie Banking Co, 170 Ga. 185 (3), 152 S.E. 215. If we consider the evidence most favorable to the plaintiff with reference to the first loan, it was that the loan was made to the husband and the wife jointly, and' a security deed to their home place was executed as security for the same; that this security deed was signed jointly by both husband and wife; that the check drawn on the Hamilton Savings & Trust Company was made jointly to both husband and wife; that the check was indorsed by both the husband and the wife and deposited in the Hamilton National Bank to the credit of the husband with the right of either the husband or the wife to withdraw by check any or all of the funds in said account. Does the mere fact that the check was so indorsed, and that...