Gartrell v. Johns , 15 Ga. App. 671 ( 1915 )

Kussell, C. J.

Under the well-settled principle ruled in Mauck v. Atlanta Trust & Bkg. Co., 113 Ga. 242 (38 S. E. 845), one who receives promissory notes or other choses in action as collateral security is bound to use ordinary diligence to collect them, and “where an endorser of a note is sued upon it, if the plaintiff has received any collateral security for its payment, the burden of proof is on the party sued, to show that such collateral security has been improperly disposed of.” ' Vose v. Yulee, 4 Hun, 629. But we think the court erred in the present case in directing a verdict against the defendant sureties for the full amount of the contract. It is true that there, was no proof to show that the collateral security was improperly disposed of, but the error of the court consisted in directing a verdict against the sureties for the full amount of the promissory note, when the sureties had limited their endorsement by an express stipulation, which was not disputed, to an amount which the evidence disclosed to be less than the $100 evidenced by the note in suit. According to the evidence, D. C. Gartrell owed E. S. Johns a certain sum of money. Johns represented to J. L. Gartrell and B. W. Gartrell that this amount was $153.90, and upon his express statement they contracted to secure D. C. Gartrell’s indebtedness of $153.90, and expressly limited their obligation of suretyship to that amount. Under the rulings in Matheson v. Jones, 30 Ga. 306 (76 Am. D. 647), and Underwood v. Bass, 1 Ga. App. 623 (57 S. E. 953), the court properly admitted evidence upon the subject, both written and parol; and it was clearly shown that, in becoming sureties, J. L. and B. W. Gartrell did not undertake or promise to pay more than $153.90. The plaintiff himself concedes this to be true, and of course his testimony that he afterwards ascertained that D. C. Gartrell owed him a larger amount, and his attempt upon that ground to increase the liability of the sureties, is not important; for the contract could not be altered by any mistake which he himself made, nor their contract amplified because he ascertained that D. C. Gartrell did owe him a larger sum than he supposed at the time he contracted witli the sureties.

A contract of suretyship. is stricti juris. The evidence as to an agreement that any overplus after the payment of the $153.90 should be paid to F. E. Gartrell, personally or as agent for D. C. Gartrell, was entirely irrelevant and immaterial, because there is no evidence that J. L. and B. W. Gartrell were parties to this agreement. There was no evidence that the sureties were interested in the payment of any overplus after the $153.90 was discharged, and certainly no evidence to indicate that they assumed any liability for the payment of the overplus in excess of the $153.90 to F. E. Gartrell, personally or as agent for D. C. Gartrell. The case then stands thus: It was the duty of the plaintiff to collect from the maker of the collateral note, for the benefit of any one who might be concerned, the entire amount of principal and interest due thereon, but the plaintiff was entitled to recover from the sureties only so much as would discharge their limited contract of suretyship and enable him to enjoy the fruits of his contract as originally made. The sureties assumed no liability to secure the collection of the remainder due on the note sued upon, after the debt of D. C. Gartrell, amounting to $153.90, was discharged, and certainly did not undertake to guarantee the collection of the balance should the maker of the note default in payment thereof. The sureties were induced to sign this note, which had been previously executed, by the statement that their liability would be confined to $153.90. And, from the statements made, it was apparently anticipated that the other notes, amounting to $135, would be easily collected, because it was uncontradicted that the plaintiff stated to each of the sureties that when the notes for $135 were paid, they would only have to pay $15 or. $30 on the note here involved. It is not contradicted that the plaintiff has received $135 from the other notes, thereby leaving a balance of $18.90 as principal upon the original obligation of the sureties. Under the'express statements made by the plaintiff to. induce the.sureties to endorse the note, they were never at any time liable for $100 upon the note signed by Horton, if the other two notes, also given as collateral, were paid. The notes amounting to $135 having been paid, the liability of the sureties, under the contract, was only $18.90 upon the note sued on. Hnder the explanation afforded by the parol evidence, the endorsement of these sureties amounted to nothing more, in the event the $135 was paid, than an endorsement for $18.90. In this view of the matter the court, under the undisputed evidence, might have safely directed a verdict in favor of the plaintiff against the principal defendant, Horton, for the full amount of the note, and against the sureties for $18.90, with interest, but erred in directing the verdict to which exception is taken. Judgment reversed.

Brotfes, J., not presiding.