Magid v. Beaver

• Decision Date: 09 March 1938
• Docket Number: 12095.
• Citation: 196 S.E. 422,185 Ga. 669
• Parties: MAGID v. BEAVER. [*]
• Court: Georgia Supreme Court

196 S.E. 422

185 Ga. 669

MAGID v. BEAVER. ^[*]

No. 12095.

Supreme Court of Georgia

March 9, 1938

Certiorari from Court of Appeals.

Action by Sandy Beaver against Mrs. Righton H. Magid to recover on a note. To review a judgment of the Court of Appeals, 56 Ga.App. 286, 192 S.E. 532, which affirmed a judgment for plaintiff, defendant brings error.

Reversed.

Syllabus by the Court.

Under the facts it was erroneous to direct the verdict in favor of the plaintiff, in view of the plea of the defendant, and the provision of the Code, § 53-503, which in part declares that a wife may not bind her separate estate by any contract of suretyship nor by any assumption of the debts of her husband. The Court of Appeals erred in affirming the judgment of the superior court.

Sandy Beaver sued Mrs. Righton H. Magid on a promissory note for the principal sum of $2,500, dated December 21, 1931, signed by her alone and made payable to him, which note was secured by a loan deed of even date, executed by her to a certain tract of land known as the Magid home place. The prayer was for judgment on the note, and that the judgment be declared a special lien on the property described in the deed. On November 24, 1934, the defendant filed her answer in which she denied being indebted to the plaintiff, though admitting the execution of the note and deed shown in the petition. She further alleged that she is a married woman and was on and long before December 21, 1931, the wife of Louis B. Magid and is still his wife; that the note and loan sued on were given for the purpose of meeting an obligation and debt of her said husband, and was a contract of suretyship for him and for Magid of Tallulah, Inc., a corporation controlled by him; that it was not her debt, nor had she any obligation to pay said debt or any part thereof and that said note was solely a contract of suretyship and an assumption of an obligation and debt of her husband and of Magid of Tallulah, Inc., that the money advanced by plaintiff on said note, if any, was advanced to Magid and to said corporation, and was not used by defendant; that plaintiff at the time he advanced said money and made said loan had full knowledge of all the facts and circumstances of the loan; that said loan deed and note were made at the instigation of and by the plaintiff for the express purpose of paying debts of Magid and of Magid of Tallulah, Inc., and upon the express condition that the proceeds of said loan be so used; that at the time said note and loan deed were executed Magid of Tallulah, Inc., was indebted to the plaintiff in a large sum; that the note sued on was void under the Code, § 53-503. She prayed for judgment in her favor, and that the note and deed be delivered up and canceled.

On the trial the plaintiff offered no evidence except the note sued on. Louis B. Magid, sworn for the defendant, testified 'I borrowed money from Mr. Beaver for the erection of a cold-storage plant on the Magid Orchard Properties. In September, 1931, Magid of Tallulah Inc., of which I was chief owner and president, owed Mr. Beaver some $60,000. I was indorser on the notes.'

In evidence was an agreement dated September 7, 1931, between Louis B. Magid, Magid Orchards Corporation, and Magid of Tallulah, Inc., as parties of the one part, and Sandy Beaver as the other party, in which it is recited that Beaver 'has this day purchased and had transferred and assigned to him an execution, and the judgment upon which it is predicated, which issued from the superior court of Habersham County, Georgia, in favor of Federated Growers Credit Corporation and against Magid Orchards Corporation for the sum of $58,696.55 as principal, and $9,970 as interest to date,' and in which it is further recited that 'whereas Magid of Tallulah is interested in acquiring title to the property referred to and described in said judgment and the execution predicated thereon, * * * and whereas Louis B. Magid is personally interested in securing for Magid of Tallulah an option to buy the property formerly belonging to Magid Orchards Corporation,' etc. Then follows an option agreement for the repurchase by Magid of Tallulah, Inc., on terms stated therein, which included an additional loan by Beaver to Magid of Tallulah, Inc., of $17,500 for which notes were given, secured by certain deeds to land executed by Magid of Tallulah; and in this option contract it is recited that 'All the notes provided for herein are signed by L. B. Magid and Magid Orchards Corporation as securities.' Louis B. Magid testified that neither he nor Magid of Tallulah, Inc., was able to complete paying for the cold-storage plant; that he went to Beaver and told him that he needed an additional loan for the purpose of completing the plant, otherwise he could not complete it, and liens would be filed; that Mr. Beaver said, 'If you have the collateral, I will make you the loan.' 'I told him we did not have any additional collateral, that he had a mortgage on it all, and that there was no money available. I asked for a loan, and he said 'You have got to produce collateral,' and I told him we did not have it. Mr. Beaver said, 'Why don't you put up your wife's home?' I said, 'Mrs. Magid will not mortgage her home. It is the only thing we have left.' Mr. Beaver said, 'You don't know what she would do.' I said, 'I have not talked to her about it; but if you suggest, I will.' He insisted that I do so, and I told him that I would find out. At that time I told him I had a piece of property in Rabun County and one in Habersham County that was a fairly good piece of land. He said he would not have that, and said, 'You have to put up collateral agreeable to me,' and if Mrs. Magid would put up as collateral her home place he would loan me $2,500 to pay the insurance and taxes and what was due. Then, at his suggestion, I talked to Mrs. Magid; talked a long time about it, and she declined to do it. I then went back to Gainesville and told Mr. Beaver she refused to give a mortgage on her home place. * * * Then he said, 'You need the money and haven't got it, and Mrs. Magid refused to give a mortgage. What are you going to do? My wife helped me that way one time--she made a mortgage on her property to help me, and there is no reason why your wife can't. * * * I will not make the loan unless you get Mrs. Magid to make a mortgage on her place. You go again and tell her there is no risk in it. You will get your property back, and she will get her home place back. * * * That is the only way out of it, Magid. You can't get the money any other way to pay the indebtedness on the cold-storage plant.'' Magid related at length the difficulty he had in persuading his wife to agree to do what Beaver required; and that when he finally informed Beaver that she would do as he insisted, he said, 'I will have my lawyer fix up the papers, and you can come down and fix up the papers and get the money and pay the indebtedness.' Magid further testified: 'I personally guaranteed several people that had furnished necessary material for the construction of the cold-storage plant that I would see that it got paid. I informed Mr. Beaver before he made this loan that I was personally obligated for a part of those debts. * * * A part of the $2,500 evidenced by the note sued on in this case went in payment of a debt I owed J. E. Harvey. I do not remember just how much; something in the neighborhood of four or five hundred dollars. The plaintiff in this case had been informed by me, prior to the time the note was made, that I owed this debt individually.'

J. E. Harvey testified, in part, as follows: 'I furnished some of the material that went into the building of this cold-storage plant at Magid of Tallulah. I furnished something like 200,000 feet and some sand and rock for the foundation, and did the grading. I made a contract to do that with Magid. I extended the credit to L. B. Magid. I sold Mr. Magid on credit. He guaranteed the payments. Mr. Magid guaranteed the payments and guaranteed up until the last payment, I charged this material to L. B. Magid. * * * I think he paid some checks, Magid of Tallulah, Inc., by L. B. Magid. * * * I wouldn't say that all the checks that were paid were signed by L. B. Magid. I know lots of them were signed by L. B. Magid. * * * I think to the best of my recollection that some or most of the checks were signed Magid of Tallulah, Inc. The first money he gave me was, but a lot were just signed by him personally.'

The defendant, Mrs. Righton H. Magid, testified in part, as follows: 'I did not ask for or apply to Colonel Sandy Beaver * * * for a loan on my home place in December, 1931. Mr. Magid first suggested to me that the loan be made on my home place. * * * I did not agree to it when it was first suggested that I borrow money on it. * * * I don't know the exact number of days that intervened after it was first suggested by Mr. Magid that I make this loan before I finally agreed to the making of this loan, but I think it was several weeks or some time from the first time he spoke to me about it, and at that time I absolutely refused to do it.' After further stating her reluctance to pledge her property for a loan, she was asked whether she owned any stock in the corporation, Magid of Tallulah, Inc., to which she answered 'I never saw any stock. I never bought any stock. I just suppose I had to have some shares to be an officer, but there was never any stock. I never did receive any stock in that corporation. I never did pay any money for any stock in my name. I never transferred or conveyed to that corporation any property. Mr. Magid owned all the stock of that corporation, Magid of Tallulah.' She was asked, 'Were you required to sign any other papers at the time this loan was...