Opinion
38506.
DECIDED OCTOBER 20, 1960.
Action on note. Savannah City Court. Before Judge Alexander. June 21, 1960.
Chas. C. Martin, for plaintiff in error.
Lewis, Wylly Javetz, contra.
1. The statute of limitation as to an action by a comaker of a promissory note for contribution from another comaker is four years.
2. Since the passage of the Negotiable Instruments Law an accommodation maker or indorser does not occupy the relation of surety to the party accommodated unless the fact is stated in the indorsement or there is otherwise an agreement that such is the fact. It follows that since there is nothing in the Negotiable Instruments Law giving a right of contribution among or between accommodating parties the right to contribution rests on the implied promise to reimburse proportionately under general law and the statute of limitation is four years from the time the accommodating party pays more than his share in satisfaction of the obligation.
DECIDED OCTOBER 20, 1960.
E. W. Bell, assignee of The Liberty National Bank Trust Company of Savannah, sued M. R. Kleinberg in the City Court of Savannah on a promissory note signed on its face as apparent makers by W. P. Collins, the plaintiff and the defendant and indorsed by the plaintiff and the defendant. As amended and as interpreted by both parties and the court the action was instituted by the plaintiff to recover of the defendant one half of the amount of the balance due on the note which the plaintiff, as co-accommodation maker or indorser paid to the payee, the amount sued for being $1,302. The defendant demurred to the petition as amended on the ground that the action was brought by one accommodation comaker against another for contribution and that the action was barred because not brought within four years from the time of the payment by the plaintiff to the payee of the note. The court sustained the demurrer on the ground that the action was by a co-indorser against his co-indorser and was barred by the statute of limitation. The plaintiff excepted to this judgment.
1. If the three parties signing the note were true comakers and not accommodation makers the court was correct in his judgment because the instrument was discharged when one or more comakers paid it, and the right to sue for contribution would arise by an implied contract of law to reimburse, and the statute would be four years. Sherling v. Long, 122 Ga. 797 ( 50 S.E. 935); Porter v. Ingram, 47 Ga. App. 266 (1) ( 170 S.E. 299) and cases cited; Black v. Davidson, 65 Ga. App. 780 (2) ( 16 S.E.2d 525).
2. Since the enactment in Georgia of the Negotiable Instruments Law an accommodation party is no longer a surety for the accommodated as a legal consequence of the accommodation undertaking. The rule now is that the fact of suretyship must be written in the indorsement or there must be an express agreement that the accommodation party is signing as surety. Cantrell v. Byars, 66 Ga. App. 672 ( 19 S.E.2d 44); Pitman v. Pitman, 215 Ga. 585 ( 111 S.E.2d 721) and cases cited on page 589. The ruling in Hull v. Myers, 90 Ga. 674 ( 16 S.E. 653), and other cases adopting the ruling to the effect that an action by an accommodation party against another for contribution could be brought on the instrument as well as on the basis of an implied contract to reimburse is no longer the law. This ruling means that the right to sue for contribution is not derived from the negotiable instrument contract but is derived from the Code section subrogating a surety to the rights of the obligee under the contract in which the relationship of principal and surety existed. Since under the Negotiable Instruments Law, where the accommodating party is not a surety, but a mere accommodation party, the right to contribution can rest solely on the implied contract for contribution for the reason that there is nothing in the Negotiable Instruments Law which expressly or impliedly provides for a right of contribution on the part of an accommodation party who pays more than his share, so the old cases no longer control. Reed v. Liberty Nat. Bank c. Co., 44 Ga. App. 544 ( 162 S.E. 154), concurred in by two judges, will not be followed. While the authorities are in conflict on this question in other jurisdictions the majority view is in accord with our conclusion if not always with our reasoning. 140 A.L.R. 889. Such cases as Pitman v. Pitman, 215 Ga. 585, supra, are not authority to the contrary because in those cases the action is not for contribution but one against parties liable, primarily and secondarily, by one who paid the amount due on the instrument to the payee. Such an action is on the instrument, in which case the statute of limitation is determined by the face of the instrument.
The court did not err in sustaining the demurrer setting up the statute of limitation.
Judgment affirmed. Nichols and Bell, JJ., concur.