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Action on note. Fulton State Court. Before Judge Moran.
Landmark First National Bank of Fort Lauderdale (Bank) filed a complaint against Charles S. Motz (Motz) seeking judgment against him on a promissory note from Earth Services Organization, Inc. (Earth Services) to the Bank and endorsed by Motz and Dickey (the president of Earth Services).
Motz defended on several grounds, including waiver and release, accord and satisfaction, lack of consideration, payment, duress and fraud, failure to properly apply payment, change of the obligation, failure to promptly seek collection and finally disability under Georgia law to bring the action. He also filed a counterclaim based upon fraudulent inducement, failure to furnish information under the Securities Act, the Exchange Act and the Georgia Act, breach of the guarantee agreement to apply payments, malicious prosecution of this action and finally malicious abuse of process seeking punitive damages and actual damages. Depositions of Motz and a Bank officer were taken and various correspondence of Motz was identified and introduced. Motz' deposition and correspondence showed that he had endorsed Earth Services' note originally on December 10, 1974 and re-endorsed renewal notes from time to time until the subject note was endorsed on April 27, 1977, it being due and payable in full on August 1, 1978.
The lower court granted the Bank's motion for summary judgment and dismissed Motz' counterclaim.
Several enumerations of error are raised.
1. The appellant contends that his endorsement of the note was a contract of guaranty which required independent consideration. We do not agree. Motz' endorsement was entitled "personal endorsement" and contained no restrictions or conditions which would imply a contract of guaranty under Code Ann. 109A-3--416. Motz stated in his deposition that he endorsed so the Bank would make the loan to Dickey (Earth Services). Under Code Ann. 103-104 an accommodation endorser is likened to a surety, not a guarantor. A person who lends his name to another party to a negotiable instrument in any capacity is an "accommodation party." Code Ann. 109A-3--415. He is an accommodation party regardless of whether he received any compensation for so acting or did so gratuitously, and he cannot legally assert lack of consideration for his accommodation since the value received by the principal debtor is the consideration for which the accommodation party bargained. Lewis v. Citizens &c. Nat. Bank, 139 Ga. App. 855, 857 (229 SE2d 765) (1976); Foote v. Citizens &c. Nat. Bank, 139 Ga. App. 863 (229 SE2d 771) (1976). Motz falls within this definition, and this enumeration is without merit.
3. Appellant next claims he was discharged from liability by the Bank's failure to diligently pursue remedies available against Earth Services and Dickey, and by failing to proceed to collect from Earth Services (the principal) after receiving notification from Motz to do so pursuant to Code Ann. 103-205.
Code Ann. 103-205 provides: "Any surety, guarantor, or indorser, at any time after the debt on which he is liable becomes due, may give notice in writing to the creditor, his agent, or any person having possession or control of the obligation, to proceed to collect the same from the principal, or any one of the several principals liable therefor; and if the creditor or holder refuses or fails to commence an action for the space of three months after such notice (the principal being within the jurisdiction of this State), the indorser, guarantor, or surety giving the notice, as well as all subsequent indorsers and all cosureties, shall be discharged. No notice shall be considered a compliance with the requirements of this section which does not state the county in which the principal resides."
The record discloses Motz gave notice to the Bank to sue Dickey, the endorser, setting forth Dickey's county and residence. However, Code Ann. 103-205 requires notice to the creditor to proceed against the principal not the endorser. The notice to proceed against Earth Services, the principal, failed to give "the county in which the principal [Earth Services] resides." Notice to a creditor to proceed is ineffective unless it states the county in which the principal resides. This requirement is mandatory under the statute. Glasser v. Decatur Lumber & Supply Co., 95 Ga. App. 665 (99 SE2d 330) (1957). No presumption exists that the corporation's residence is that of its president.
4. Appellant claims it was error for the trial court to grant summary judgment while a motion to compel answers to interrogatories and production of documents was pending. Normally, such practice is not condoned. Here, appellant contends discovery would be relevant to his fraud claim. However, as pointed out in Division 2, Motz' deposition, his correspondence, and his waiver foreclosed any allegation of fraud. Under these circumstances we find that appellant's disallowed discovery requests would add nothing of substance to his claim. Aviation Spec., Inc. v. United Technologies Corp., 568 F2d 1186 (1978); Washington v. Cameron, 411 F2d 705 (1969).
6. Finally, dismissing Motz' counterclaim sua sponte was not error. Summary judgment in favor of the Bank's claim was dispositive of the issues raised by the counterclaim. Cruce v. Randall, 152 Ga. App. 183 (262 SE2d 488) (1979).
K. Morgan Varner, III, for appellee.
Edgar H. Sims, Jr., Frank A. Lightmas, Jr., for appellant.
ARGUED MARCH 5, 1980 -- DECIDED JUNE 13, 1980.
Friday May 22 00:58 EDT

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