Nooy v. Pitner

• Decision Date: 25 September 1915
• Docket Number: (No. 5097.)
• Citation: 86 S.E. 456,17 Ga.App. 229
• Parties: VER NOOY. v. PITNER et al.
• Court: Georgia Court of Appeals

86 S.E. 456

17 Ga.App. 229

VER NOOY.

v.PITNER et al.

(No. 5097.)

Court of Appeals of Georgia.

Sept. 25, 1915.

(Syllabus by the Court.)

Error from City Court of Athens; H. S. West, Judge.

Action by C. A. Ver Nooy against W. C. Pitner and others. Judgment for defendants, and plaintiff brings error. Reversed.

Holden, Shackelford & Meadow, of Athens, for plaintiff in error.

S. C. Upson, Green & Michael, E. K. Lumpkin, and Thos. J. Shackelford, all of Athens, for defendants in error.

RUSSELL, C. J. Suit was brought in the city court of Athens by Charles A. Ver Nooy against J., N. Webb, principal, and R. J. Hancock, E. H. Youngkin, and W. C. Pitner, as securities, on a promissory note. Upon the trial it was agreed that Webb, Young-kin, and Hancock had been discharged in bankruptcy from liability upon the note, and the only issue for trial was whether or not W. C. Pitner had been released from liability as security. The jury returned a verdict in favor of the defendant, and Ver Nooy excepts to the judgment overruling his motion for a new trial.

The note was dated May 31, 1907, and was due 12 months after date, with interest from date at the rate of 7 1/2 per cent. per annum. At the maturity of the note, on May 31, 1908, it was not paid; but the accrued interest, amounting to $150, was paid. According to the evidence, the creditor voluntarily preferred not to sue upon the note, and, so far as appears from the record, the surety did not give the payee of the note the statutory notice for the purpose of relieving himself. It is uncontradicted that the extension of the note from May 31, 1908, to May 31, 1909, was without any agreement and without consideration. Some time in June, 1909, after more than another year's interest had accrued, Mr. F. C. Shackelford accosted the principal, Mr. Webb, and said, "Joe, Mr. Ver Nooy has been after me about the interest due on that note." To this Mr. Webb replied that Ver Nooy had called his attention to it by letter, and that he overlooked it, but he would attend to it at once. Shackelford then said that Ver Nooy was particular about collecting his interest when due, and continued, as Webb was walking away, with the statement that Ver Nooy was getting dissatisfied about the rate of interest that was being paid; that he was getting 8 per cent. for his other money. Webb replied that they would not have any disturbance about the extra one-half per cent Within two or three days after this conversation, Webb sent Ver Nooy a check for $160. Webb testified that he had never in his life had any conversation with Ver Nooy about the payments, but that in 1910, 1911, and 1912, each time "at the interest-bearing periods at the end of the year" he had paid $160. Webb testified, "I didn't pay any interest in advance, " and in another place in his testimony, in referring to the payments of $160, he said, "I gave that to Mr. Ver Nooy, " and, "When I paid Mr. Ver Nooy in 1909, there was nothing said about the extension of the paper." This witness further testified:

"Nothing was said by Mr. Shackelford that if 8 per cent. was paid the note would he extended, or anything at all said about the extension of the note. * * * Mr. Shackelford did not say anything to me about any agreement or contract. He did not say anything about whether I would have to pay 7 1/2 per cent. or 8 per cent. He did not say anything about whether or not the note would be extended. He told me that Mr. Ver Nooy was dissatisfied for the reason that he was getting 8 per cent. from other people. I sent him 8 per cent. on the money, and that is as plain as I can tell it. When I paid the 8 per cent., I did not know that I would be given another year on the paper. I just paid it because the interest was due."

Mr. Pitner testified that he was not consulted with reference to an extension of the note when it matured on May 31, 1908, nor was he consulted as to the payment of 8 per cent. interest rather than 7 1/2; that he did not know the note was in existence, or anything about it, until Webb failed; that he did not know that the note had not been settled at its maturity; that the note could not now be collected from either the principal or the other sureties. Pitner further testified:

"On the morning Webb failed, I went to him to get some security to secure me on account of being indorser on the note sued on in this case, and he gave me, in order to indemnify me against loss on account of being security on the note, some Coca Cola stock, which I have had ever since that time and still have."

The court excluded this testimony and refused to allow it to go to the jury. Besides the usual general grounds, the motion for a new trial is based on assignments of error as to the charge of the court and as to the exclusion of the testimony of Pitner just above quoted.

1. We shall first consider the exception to the exclusion of the testimony. We think the court erred in ruling out this evidence elicited from the defendant upon cross-examination. The witness had testified that he did not know that the note had not been paid or that it was in existence, and the fact that he went to Webb to get security to indemnify him against loss might be a circumstance to be weighed by the jury in connection with that statement. In the next place, it seems to us that a demand to be indemnified against loss could properly be considered by the jury as a ratification of the extension after he acquired knowledge that the note had not been paid. And besides that, if it had developed from further inquiry that the surety procured from the principal on the note property for the purpose of indemnifying himself, of equal or greater value in amount than his liability as surety upon the note, he would be estopped ex æquo et bono from insisting that he had been released as. surety; this regardless of whether the property turned over to him might be taken away from him by a court of bankruptcy and applied to the payment of the creditors of the bankrupt generally in accordance with their priorities.

2. The surety in this case relies upon a release upon the ground that there was such a novation in the terms of the contract, without his consent, as to discharge him (Civil Code, § 3543), and also relies upon the provisions of section 3544, upon the ground that the act of Ver Nooy, in extending the time of payment, exposed him to greater liability and increased his risk. In the briefs and arguments of the learned counsel for both parties, many authorities were cited, addressed to the proposition that under the evidence there was either a novation by Ver Nooy's acceptance of the additional one-half per cent., or no novation, because the additional one-half per cent. was, under Webb's testimony, as contended, a mere gift. Likewise, it is contended that Webb's agreement to pay one-half of one per cent. if any agreement was made between him and Shackelford, as agent for Ver Nooy, was a collateral undertaking outside the original contract. Learned counsel for the defendant in error insists, also, that the risk of the sureties was increased because the successive payment for four years of the additional one-half of one per cent. interest in pursuance of...