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FAGELSON v. PFISTER ALUMINUM CORPORATION.
40632.
Action on contract. DeKalb Civil and Criminal Court. Before Judge Morgan.
FELTON, Chief Judge.
1. The contract sued on was one of suretyship, rather than of guaranty.
2. The right of action upon an unsealed contract of surety is not barred by the statute of limitation until the expiration of six years after the date of the maturity of the obligation.
3. The special demurrers are deemed abandoned, hence no ruling on them is made.
Pfister Aluminum Corporation sued Edward D. Fagelson and Cyrus Polan on an alleged continuing guaranty contract as follows: "In consideration of the extending of credit to General Seat and Back Manufacturing Corporation located at 730 Humphries St., S.W., Atlanta, Georgia, by Pfister Aluminum Corporation of 475 Franklin Turnpike, Allendale, New Jersey, and it being important and essential to the undersigned that said credit be extended, we, Cyrus Polan of Fulton County, Georgia, and Edward D. Fagelson of Fulton County, Georgia, do hereby personally and unconditionally, jointly and severally, guarantee to Pfister Aluminum Corporation that we will pay for all goods that have been or may be sold to General Seat and Back Manufacturing Corporation from time to time by Pfister Aluminum Corporation and we further personally and unconditionally, jointly and severally, guarantee to pay upon demand to Pfister Aluminum Corporation any sums due it and unpaid after the date hereof. It is understood that Pfister Aluminum Corporation may, without consulting us extend the due date of any indebtedness, or any part thereof owed to it by debtor, accept any promissory note or other evidence of indebtedness from debtor, and renew or extend any such note or other evidence of indebtedness, accept collateral in any form for any such indebtedness. Any such action on the part of Pfister Aluminum Corporation shall not relieve us of our obligation under this guarantee. We also waive presentment, protest and notice of non-payment of any note or other evidence of indebtedness accepted by Pfister Aluminum Corporation from General Seat and Back Manufacturing Corporation and/or Cyrus Polan and Edward D. Fagelson. We further agree that this Contract of Guaranty shall be binding on us, our heirs, executors, administrators, and assigns, and that the benefits of this contract shall inure to the Pfister Aluminum Corporation, its successors and assigns. This guarantee shall be a continuing one, and shall be in force until revoked in writing by the undersigned guarantors, and, notwithstanding such notice of revocation aforesaid, this guaranty shall continue in force and shall be binding upon the undersigned until all amounts and liabilities owing from the General Seat and Back Manufacturing Corporation to Pfister Aluminum Corporation existing at the time of the receipt of such notice shall be paid. In Witness Whereof, the parties hereto have set their hands and seals this 7th day of February, 1957. [Signed] Cyrus Polan, Edward D. Fagelson."
The petition as amended alleged substantially as follows: That the plaintiff sold and delivered to General Seat and Back Manufacturing Corporation in Atlanta certain merchandise in the sum of $25,336.05, as shown on invoices attached as exhibit "A"; that goods and merchandise in the amount of $6,236.91, identified on an invoice from the plaintiff corporation attached as exhibit "C," were ordered by said General Corp. to be delivered by the plaintiff to American Express Field Warehousing Corporation in Atlanta and stored there for use and disposition of said General Corp.; that said goods were delivered by the plaintiff to said warehouse, but that said General Corp. failed and refused to accept delivery thereof or to pay the just, reasonable and necessary warehousing charges incurred in the amount of $804.35, which charges were paid (by) petitioner on account of said General Corp.; that said charges resulted from the failure of said General Corp. to accept and receive said goods shipped under the invoice numbers listed on the statement of account from said American Corp. to said General Corp. dated August 31, 1962 and further identified by a letter of December 3, 1962, from said American Corp. to the plaintiff's attorney, both the statement of account and the letter being attached as exhibit "D"; that the plaintiff incurred just, reasonable and necessary costs of $663.10 in removing the goods from the warehouse, as indicated in the invoice from W. S. Brown Trucking Company to the plaintiff dated September 6, 1962, and the invoice from the plaintiff to said General Corp. dated September 25, 1962, attached as exhibit "E"; that said goods were sold at salvage by the plaintiff for the just, fair and reasonable price of $2,166.57, wherein the plaintiff incurred a $4,070.34 loss, plus an $850.65 loss in the resale of other warehousing materials sold and delivered to Kay-Townes Antenna Co. of Rome, Georgia, according to invoice sheets attached as exhibit "F"; that all of said losses and expenses, as set out in exhibits "C", "D", "E" and "F", were caused by the failure to accept delivery; that the defendants are jointly and severally indebted to the plaintiff in the sum of $31,724.49, plus interest since December 7, 1962, said sum being due and unpaid, demand for payment having been made and refused.
The case is in default as to defendant Polan, who filed no answer or pleading. Defendant Fagelson's general demurrers and one of his special demurrers to the original petition were overruled and the remaining six special demurrers were sustained. To the petition as amended, defendant Fagelson renewed all of his original demurrers and filed additionally one general and ten special demurrers. The court overruled all of the renewed demurrers to the petition as amended, to which judgment the defendant excepts.
1. The contract executed by the defendants was one of suretyship, rather than of guaranty, notwithstanding the references therein to such terms as "contract of guaranty," "guarantors," and "guarantee." It is the real intent of the parties and the substance of such an agreement which determine its character rather than its form or nomenclature. Fields v. Willis, 123 Ga. 272, 275-6 (51 SE 280); Moate v. H. L. Green Co., 95 Ga. App. 493, 504 (98 SE2d 185) and cit. The distinction between these two types of contracts is made in Code 103-101, as follows: "The contract of suretyship is one whereby a person obligates himself to pay the debt of another in consideration of credit or indulgence, or other benefit given to his principal, the principal remaining bound therefor. It differs from a guaranty in this, that the consideration of the latter is a benefit flowing to the guarantor." The stated consideration of the present contract is "the extending of credit to General Seat and Back Corporation" by the plaintiff. Another fundamental difference is that a contract of guaranty is conditioned upon the promisee's inability to recover of or enforce performance by the principal, and is not an absolute agreement to answer for the default of the principal. Moate v. H. L. Green Co., p. 504, supra. The present contract contains no provisions requiring the plaintiff promisee to proceed first against the principal, the General Corp. To the contrary, the defendant promisors agreed therein unconditionally to pay upon demand to the plaintiff any sums due and unpaid thereafter. Further evidence of its nature as a suretyship is the waiver of presentment, protest and notice of non-payment of any note or other evidence of indebtedness accepted by the promisee from the principal. This waiver is an indication of the assumption of the primary, rather than mere secondary, obligation to pay the debt. The makers of the instrument being sureties and not guarantors, it was unnecessary that the plaintiff should allege that the principal debtor, the General Corp., was unable to perform. McKibben v. Fourth Nat. Bank of Macon, 32 Ga. App. 222, 223 (3, a) (122 SE 891).
2. The right of action upon an unsealed contract of surety is barred by the statute of limitation upon the expiration of six years after the date of the maturity of the obligation, not six years after the date of the execution of the agreement, since no right of action accrues until the maturity date of the obligation. The petition with its attached exhibits shows on its face that six years had not elapsed between the dates on which the alleged debts were incurred and the date of filing suit therefor, so it must be assumed that the plaintiff's alleged demand on the defendants was made within six years prior to the filing of the action.
3. The special demurrers, not having been argued in plaintiff in error's brief, are deemed to have been abandoned.
It follows from the above that the petition as amended stated a cause of action against the defendants for some amount, and therefore the general demurrers were properly overruled.
Judgment affirmed. Frankum and Pannell, JJ., concur.
Rose & Lappas, Paul K. Silverman, Hugh A. Wells, contra.
Sidney Haskins, for plaintiff in error.
DECIDED APRIL 28, 1964 -- REHEARING DENIED MAY 5, 1964.
Friday May 22 21:36 EDT


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