text:
    8256, 8257.
    Phosphate Mining Co. v. Atlanta Oil & Fertilizer Co.; and vice versa.

   George, J.

1. The courts of this State' are committed to the rule laid down in Hochster v. De la Tour, 2 El. & Bl. 678, and followed by the ■ Supreme Court of the United States in Rhoem v. Horst, 178 U. S. 1 (20 Sup. Ct. 780, 44 L. ed. 953). The rule is: An absolute refusal by one party to perform an executory contract containing mutual obligations, prior to the date or dates fixed for performance, if such re-' pudiation goes to the whole contract, amounts to a tender of a breach of the contract; and if accepted as such by the opposite party to the contract, it constitutes an anticipatory breach, and the injured party may at his election at once sue and recover his entire damages. The opposite party is not required to accept a tender of a breach of the contract, but he may elect to keep the contract in force for the purpose for which it was made; and in such case his own obligation, as well as that of the other party, will continue until the time for performance, as fixed by the contract. Smith v. Georgia Loan Co., 113 Ga. 975 (39 S. E. 410); Anderson v. Kirby, 125 Ga. 62, 67 (54 S. E. 197, 114 Am. St. E. 185, 5 Ann. Cas. 103); Ford v. Lawson, 133 Ga. 237 (5) (65 S. E. 444); Byrd Printing Co. v. Whitaker Paper Co., 135 Ga. 865 (70 S. E. 798, 22 Ann. Cas. 182); Southern Flour Co. v. St. Louis Grain Co., 11 Ga. App. 401 (75 S. E. 439).

2. Where such tender of an anticipatory breach of the contract has been accented by the opposite party and suit at once commenced, the injured party may recover the entire value of his contract, as if the breach continued to the date fixed for performance; and generally his measure of damages, as under a contract of sale and purchase, is the difference between the contract price and the market price of the subject-matter of the contract on the date fixed for the performance thereof. 3 Elliott on Contracts, § 2027; 6 R. C. L. 1023, 1024, et seq. “The doctrine of anticipatory breach is not a doctrine which fictitiously moves the performance ahead to the time of the repudiation, and regards the repudiation as a failure to perform the contract.” 2 Sedgwick on Damages, § 636 (d).

3. An apparent exception (but in reality an accurate application of the general rule, according to some text-writers and the doctrine of a few cases) exists where the article which the vendor agrees to sell and the vendee agrees to buy has a market value, and is generally and usually sold for future or forward delivery; in which ease the measure of damages is said to be the difference between the price fixed in the contract and the market price of such article for future or forward delivery, according to the contract breached; and this difference is to be determined at the time the tender of the breach is accepted. Compare 2 Sedgwick on Damages, §§ 636 (d), 636 (e), 636 (f) ; Skeele Coal Co. v. Arnold, 200 Fed. 393 (118 C. C. A. 545); Jebeles & Colias Confectionary Co. v. Stephenson, 6 Ala. App. 103 (60 So. 437) ; Louisville Packing Co. v. Crain, 141 Ky. 379 (132 S. W. 575).

4. This apparent exception to the general rule, applied in the narrow class of cases indicated in the third division of this decision, has much reason in it; but, as we interpret the decisions of the courts of this State, . the apparent exception is not recognized. Though the plaintiff sues at once for an anticipatory breach of contract, and' trial of the action is had before the expiration of the contract, the measure of his damages is the difference between the contract price of the subject-matter of the contract and the market price at the time and' place of performance, and not at the time of the breach. Testimony as to the market value of the subject-matter of the contract should not be confined to the time of the breach. And this is true although the subject-matter of the contract is an article usually and generally, but not exclusively, sold for future or forward delivery. Roberts v. Rigden, 81 Ga. 440 (7 S. E. 742) (contract for services) ; Roberts v. Crowley, 81 Ga. 429 (3) (7 S. E. 740) (contract for services) ; Citizens Bank v. Southern Securities Co., 143 Ga. 101 (3) (84 S. E. 465) (contract for services) ; Carolina Portland Cement Co. v. Columbia Improvement Co., 3 Ga. App. 483 (1, 2) (60 S. E. 279); Realty Co. v. Ellis, 4 Ga. App. 402 (3) (61 S. E. 832) (contract for services); Ga., Fla. & Ala. Ry. Co. v. Parsons, 12 Ga. App. 180 (2) (contract for services) (76 S. E. 1063).

5. Where the subject-matter of the contract has no current value, the measure of damages is generally the difference between the contract price and the cost of production at the time for performance; whether the trial of the action is before or after the time fixed for delivery, but the cost of production is material only ■where the article has no market or current value, and evidence concerning the cost of production is entirely irrelevant where, as in this case, the phosphate rock (the subject-matter of the contract) is sold generally throughout the United States, continental Europe, and Japan.

6. An executory contract may be broken, but it can not be rescinded, by the act of one of the parties. The consent of both parties is essential to a rescission of the contract. Oklahoma Vinegar Co. v. Garter, 116 Ga. 140 (42 S. E. 373, 59 L. R. A. 122, 94 Am. St. R. 112).

7. While one who repudiates an executory contract before the time of performance has arrived can not call upon the opposite party to make forward contracts for his benefit, for the purpose of lessening the damages of the party at fault, nevertheless, if the opposite party accept the tender of the breach, he is bound to abate his damages by reason of circumstances of which he ought reasonably to have availed himself. Rhoem v. Horst, supra; Civil Code (1910), § 4398. The tender of an anticipatory breach does not change the time at which the damages are to be estimated, nor affect the general rule of damages; but if the tender is accepted by the opposite party, that party acts thereafter under the rule of avoidable consequences.

8. While the fact that the buyer of fertilizer material had sold its factory and discontinued its business, which fact was communicated to the seller, raised no legal obligation on the part of the seller to consent to a rescission of the contract, or to accept the buyer’s transfer of the contract to its successor, yet, under the circumstances appearing in the present record, and in view of the special provisions of the contract, it was for the jury to decide whether the seller had in fact consented to the transfer of the contract.

9. The amendments to the answer of the defendant were properly allowed, over the objections urged. We can not assume that the evidence in support of the defendant’s amendment, alleging that the contract was void as in violation of the act of' Congress known as the Sherman anti-trust law, will necessarily be the same upon another trial of the ease, but, under the facts in the present record, the court did not err in taking that issue from the jury.

10. The demurrers to the petition as amended were properly overruled. Compare Atlanta Oil & Fertilizer Co. v. Phosphate Mining Co., 144 Ga. 75 (86 S. E. 216).

11. The petition in the instant case contained two counts. On the first count, predicated on the theory that under the terms of the contract between the parties the defendant company failed and refused to receive and pay for a certain quantity of phosphate rock, which under the contract it had obligated itself to take, the plaintiff recovered a substantial verdict. On the second count, which was predicated upon an alleged anticipatory breach of the entire contract to the end of- its term, the plaintiff recovered nominal damages only. None of the questions discussed in the foregoing divisions of this decision arose on the trial of the first count, and neither party is complaining in reference thereto. This court will, in its discretion, affirm the judgment of the court below refusing a new trial on the first count of the plaintiff’s petition, and, on account of errors in rejecting evidence and in giving to the jury instructions not in accordance with the rulings announced in this decision, order a new trial only as to the issues involved in the second count. The errors complained of in the cross-bill of exceptions will not require a reversal of the judgment, but since the issues involved in the second count of the plaintiff’s petition are to be ag-ain submitted to a jury, instructions appropriate to the facts appearing in the record, and' not inconsistent with the rulings made in the 7th and 8th divisions of this decision, should be given to the jury.

Decided July 26, 1917.

Adhered to on rehearing, September 24, 1917.

Action, on contract; from Fulton superior court—Judge Pendleton. March 18, 1916.

Bvins & Moore, for Phosphate Mining Company.

D. W. Blair, King & Spalding, contra.

Judgment affirmed in part and reversed m part on the mam hill of exceptions, and affirmed on the cross-hill.

Wade, G. J., and Luloe, J., concur.


source: Caselaw Access Project

author: Luke, J.

license: Public Domain

text:
    8331.
    Postal Telegraph-Cable Co. v. Barnes-Fain Co.
    Decided July 26, 1917.
    Certiorari; from Fulton superior court—Judge Bell. October 5, 1916.
    The telegraph company was sued in the municipal court of Atlanta for damages on account of an alleged error in the transmission of a telegram. The telegram was addressed to J. J. Barnés-Fain Company, the plaintiff, and, as delivered to the telegraph company, was an offer to sell a car of potatoes for “dollar quarter hamper.” In the telegram as delivered to the addressee the word “quality” was substituted 'for the word “quarter.” It was alleged that “dollar quarter hamper” meant a dollar and a quarter per hamper, and that the effect of the telegram as delivered to the addressee was to offer the potatoes for a dollar per hamper; that “on the strength of this offer” the plaintiff bought the potatoes, and they were sold by the plaintiff “upon a basis of cost to it of a dollar a hamper;” that afterwards the sender of the telegram demanded of and collected from the plaintiff a dollar and a quarter per hamper, and the plaintiff was bound to pay him that price; that the car contained 606 'hampers, and the plaintiff was damaged in the sum of $200, for which it sued. On the trial C. L. Fain, of the plaintiff company, testified: “Acting on the strength of that telegram I bought the potatoes therein referred to, agreeing to pay one dollar per hamper. . . I paid Mr. Burch [the sender] $1.25 per hamper, there being 606 hampers. In the telegram . . the words . . ‘ quality hamper’ indicate to my mind a description of the hamper. I paid the $1.25 on the demand of Mr. Burch. . . After the receipt of this telegram I disposed of the -potatoes, . . within ten minutes after its receipt, . . upon the basis of $1 a hamper.” There was no other evidence than the testimony of this witness and the telegrams. The trial judge rendered a judgment against the defendant for $151.50. The court refused to grant the defendant’s motion for a new trial, and the defendant sued out certiorari, the judge of the superior court overruled the certiorari, and the defendant excepted.
   Luke, J.

1. While the addressee of a telegram may sue the telegraph company in tort and recover for such damage as 'proximately results from its breach of duty to serve the public with due care (Stewart v. Postal Telegraph-Cable Co., 131 Ga. 31, 61 S. E. 1045, 18 L. R. A. (N. S.) 692, 127 Am. St. R. 205),, he can not recover for damage not caused by the negligence of the telegraph company, but which resulted from his voluntary act in complying with the terms of a proposal or contract which he was under no legal compulsion to perform. Sparks Milling Co. v. Western Union Telegraph Co., 9 Ga. App. 728 (72 S. E. 179).

2. The evidence did not authorize the judgment of the trial court. Therefore the superior court erred in overruling the certiorari.

Judgment reversed.

Wade, O. J., and George, J., concur.

Moore & Pomeroy, contra.

B. W. Crenshaw, Anderson & Bountree, for plaintiff in error.


text:
    8332.
    Brandt v. Klement.
    Decided July 26, 1917.
   Luke, J.

1. A discharge in bankruptcy does not relieve the- bankrupt from liability upon actions for fraud or for obtaining property by false pretenses or false, representations. Atlanta Skirt Mfg. Co. v. Jacobs, 8 Ga. App. 299 (6S S. E. 362) ; Orr Shoe Co. v. Upshaw, 18 Ga. App. 501 (79 S. E. 362) ; Moody v. Muscogee Mfg. Co., 134 Ga. 721 (68 S. E. 604, 20 Ann. Cas. 301).

2. Upon the petition for certiorari and the answer thereto, the court -did not err in overruling the certiorari.

Judgment affirmed.

Wade, G. J., and George, J., concur.

Certiorari; from Fulton superior court—Judge Bell. October 12, 1916.

Mrs. Element sued Brandt in the municipal court of Atlanta for $72, alleging than he was indebted to her in this sum for rent collected by him for property belonging to her. In his answer he admitted that he had collected $70.22 in rent for her, and alleged that payments therefrom, amounting to $20.20, had been made by him for and to her, and that, by reason of a contract by her to pay a commission of $55 on the sale of certain real estate, there was due him a balance of $3.98. The trial resulted in a judgment against him for $51.02. Subsequently he filed a petition in bankruptcy, in which the judgment was scheduled, and, after his discharge in bankruptcy, an execution based on this judgment was •levied. He interposed an affidavit of illegality, on the ground that the debt had been discharged in the bankruptcy proceeding. It appeared from testimony on the trial of the issue thus raised that on the original trial there was evidence that the defendant represented to the plaintiff that he had paid off for her a series of notes amounting to $200, and requested that he be, allowed to reimburse himself by collecting the rent referred to above, and thus obtained her consent to his collection of the money; that she afterwards found that he had not paid the notes, and she demanded the money collected, and he refused to pay it. A judgment overruling the affidavit of illegality was rendered by the judge of the municipal court, who tried the case without a jury, an oral motion for a new trial was overruled, certiorari was sued out, the certiorari was overruled, and error is assigned on the overruling of the certiorari.

It was contended that the provision of the bankruptcy act (§ 17 (a)), relied on by the plaintiff, which excepts from the operation of a discharge in bankruptcy “liabilities for obtaining property by false pretenses or false representations,” etc., does not apply to this case, because the plaintiff’s judgment was rendered on a suit ex contractu, in which there was no allegation of fraud or false pretenses or representations; that to avoid the effect of a discharge in bankruptcy, as to a judgment, it should appear, from allegations in the pleadings on which the judgment is based, that the liability is within the exception referred to.

Reynolds & Whitman, for plaintiff in error, cited:

Bankruptcy act, §§ 63 (a), 17 (a), 32 Stat. L. 798; 1 Fed. Stat. Ann. (2d ed.) 718, 719; Ford v. Blackshear Mfg. Co., 140 Ga. 671, 676-8.

Marie Bolding, George T. Norihen, contra, cited:

Bankruptcy act, § 17; Hallagan v. Dowell, 139 N. W. 883, 31 Am. B. R. 848; Atlanta Shirt Mfg. Co. v. Jacobs, 8 Ga. App. 299; Orr Shoe Co. v. Upshaw, 13 Ga. App. 501 (2); In re Lewis, 20 Am. B. R. 711 (163 Fed. 137); 3 Remington, Bankruptcy (2d ed.), § 2746; Collier, Bankruptcy (ed. 1914), 392; Bullis v. O’Beirne, 195 D. S. 606; Moody v. Muscogee Mfg. Co., 134 Ga. 721 (4) (20 Ann. Cas. 301); Mackel v. Rochester, 14 Am. B. R. 429 (135 Fed. 904).


text:
    8365.
    Jackson v. Menter Company.
    Decided July 26, 1917.
    Certiorari; from Fulton superior court—Judge Pendleton. December 6, 1916.
    The action was by the Menter Company against R. R. Jackson Jr., in the municipal court of Atlanta. In what is referred to “as a copy of the cause of action attached to the process” the name and address of the plaintiff and the words, “Clothing for men, women, and children,” are .followed by these items:
    6/10/16 L suit $18.00 6/10/16 Cash $1.00
    ” ” 2.00
    6/17/16 ” 1.00
    6/27/16 ” • 1.00.
    Bal. $13.00
    $18.00
    The items are followed by the name of the defendant.
    The grounds of the demurrer were: “The alleged cause of action attached to the process . . sets forth no cause of action against the defendant, and does not show for what the defendant is being sued, and does not show that defendant is indebted to plaintiff; the same does not show whether the alleged cause of action is on contract, assumpsit, or what plaintiff is proceeding on or for.” The defendant, in his answer, denied indebtedness, and alleged that he had never had any dealings with the plaintiff and that no other person had authority to represent him in any dealings with the plaintiff. The evidence for the plaintiff consisted of the testimony of one witness and a written contract. The testimony of this witness is stated as follows: “that he was employed by the plaintiff as its manager; that at the time this sale was made he’did not know the defendant, except by reputation, and neither did he know defendant’s wife; that Mrs. Jackson, wife of the defendant, came into the store and picked out the. goods in question, and asked about having them charged, and witness, knowing that defendant was responsible, told her he could only charge them to her husband, at the same time having her execute one of their usual contracts in her husband’s name; that three payments were made • on the account, and thereafter defendant refused to pay, stating that his wife had left him.” The written contract referred to was signed, “R. R. Jackson, by Mrs. Helen Jackson,” and was an agreement to pay $18 in weekly installments for a “suit.” On it were credits amounting to $4. The defendant testified as follows: “I do not owe the bill sued on, nor any part of the same. I know nothing about anything being sold, if it was sold. I never promised to pay the bill. I did not authorize anything to be bought. I did not authorize the signing of my name to this contract. I have never ratified the signing of the same. I do not ratify it now. Mrs. Helen Jackson is not my wife. I do not live with her, and was not living with her when the goods were bought, if any was bought, or when the contract was made.” There was no further evidence. The court rendered a judgment against the defendant for $13. In his petition for certiorari it was alleged that this judgment was contrary to law and the evidence, and that the court erred in overruling the demurrer.
   Luke, J.

The judge of the superior court should have sustained the certiorari, because (a) the general demurrer to the cause of action should have been sustained; (6) the evidence demanded a verdict in.favor of the defendant in the trial court. Mayer v. Southern Express Co., 17 Ga. App. 744 (88 S. E. 403).

Judgment reversed.

Wade, C. J., and George, J., conewr.

Gober & Jackson, for plaintiff in error.


text:
    8366.
    Williams v. Brown & Bigelow Incorporated.
    Decided July 26, 1917.
    Certiorari; from Fulton superior court—Judge Bell. October 16, 1916.

      Bachman & Simmons, for plaintiff in error.

      Anderson, Slate & D’Orr, contra.
   Luke, J.

Upon tlie petition for certiorari' and the answer, the court did not err in overruling the certiorari.

Judgment affirmed.

Wade, O. J., and George, J., concur.


text:
    8406.
    Central of Georgia Railway Company v. Cheney.
    Decided - July 26, 1917.
    Appeal; from Carroll superior court—Judge R. W. Freeman. December 38, 1916.-

      B. D. Jaclcson, for plaintiff in error.'

      Boykin & Boykin, contra.
   Luke, J.

The motion for a new trial was based on the general grounds only. The verdict was authorized by evidence, and has the approval of the trial judge, and it was not error to overrule the motion for a new

trial. Judgment affirmed.

Wade, O. J., and George, J., concur.


author: "Wade, C. J.

text:
    8442.
    PHILLIPS v. CENTRAL OF GEORGIA RAILWAY CO.
    1. Where a suit brought within the time prescribed by the statute of limitations, in a court having jurisdiction of. the subject-matter, is dismissed solely for want of jurisdiction of the person, it may be renewed within six months, under the provisions of section 4381 of the Civil Code of 1910, which should be.construed liberally so as to allow renewal where the suit is disposed of on any ground not affecting its merits.
    2. Where a suit against a railroad company, for injuries alleged to have been caused by its negligence while both the plaintiff and the defendant were engaged in interstate commerce, was bi’ought within two years from the date of the infliction of the injuries, and was dismissed because the court had no jurisdiction over the defendant, and within six months after the dismissal the action was renewed in a court which had jurisdiction of both the subject-matter and the person, and by amendment all reference to interstate commerce and the resulting liability of the defendant under the Federal employer’s liability act was stricken from the renewal suit, so that- a suit for damages incurred while the plaintiff was engaged in intrastate commerce alone remained, the court erred in sustaining a demurrer on the ground that the action was barred by the Federal statute of limitations requiring such a suit to be brought within two years from the time of the injury.
    Decided July 26, 1917.
    .Action for damages; from city court of Houston county—Judge Eiley. December 30, 1916.

      R. L. Berner, for plaintiff. J or dan & Lane, for defendant.
   "Wade, C. J.

The original petition in this case was filed in the city court of Savannah, and the plaintiff therein alleged that he was injured on account of a defective appliance on the locomotive of the defendant company while he was engaged in operating a work-train of the defendant, employed for the purpose of repair- • ing the defendant’s track “over which cars were transported between the city of Macon, Georgia, and the city of Birmingham, Alabama, and which track was used for both intrastate and interstate commerce.” That suit was dismissed on March 18, 1916, and, on August 10, 1916, the action was recommenced in Houston county, in a court having jurisdiction both of the subject-matter and of the defendant, by a petition alleging the identical facts set forth in the original petition-brought to the city court of Savannah, including the allegation that the work-train on which the plaintiff was employed “was used for the purpose of repairing the track of the defendant over which cars were transported between the city of Macon, Georgia, and the city of Birmingham, Alabama, and which track was used for both intrastate and interstate commerce.” A demurrer was interposed, urging the objection that the petition showed upon its face that the defendant and the 'plaintiff were both at the time of the alleged injury engaged in interstate commerce, and “that the said cause of action was not filed within two years from the date the cause of action accrued, in compliance with the sixth section of the act of Congress relating to common carriers by railroad to their employees, approved April 22, 1908 (e. 149), which said section is as follows: That no action shall be maintained under this act unless commenced within two years from the date the cause of action accrued.’” 35 Stat. 66 (U. S. Comp. St. 1916, § 8662). The plaintiff thereupon amended his petition by making it appear that the defendant’s track which he was engaged in repairing was one over which cars were operated between the city of Macon, Georgia, and the city of Columbus, Georgia, and by striking out the allegation that it was used both for intrastate and interstate commerce, and inserting in lieu thereof the allegation that “the plaintiff was engaged in intrastate commerce at the time of his injury.” The court sustained the general demurrer to the petition as amended, and dismissed the suit.

That the Federal employer’s liability act supersedes all State laws on the same subject is now too well settled to require citation of authority; and where the facts alleged in a petition clearly show that the plaintiff was injured while engaged in interstate commerce, the case will proceed in accordance with the rules prescribed by the Federal courts, and the plaintiff will be entitled to all the privileges accorded him under the provisions of the Federal statute. He will, for instance, if the injury resulted from defects in certain appliances covered by the statute, be safe from the defense of assumption of risks, which is by statute abrogated as to certain defects in track and equipment. It is insisted by counsel for the defendant that since the plaintiff must bring his action under the Federal employer’s liability act within two years of the infliction of the injury complained of, and this limitation is not affected by a State statute providing that when an action commenced within the period of limitation is dismissed, or judgment rendered against the plaintiff upon any ground not conclusive of his right of action,- he may bring suit thereafter within a period fixed by the State statute (Vaught v. Virginia &c. R. Co., 132 Tenn. 679, 179 S. W. 314; Morrison v. B. & O. R. Co., 40 App. D. C. 391, Ann. Cas. 1914C, 1026; American R. Co. v. Coronas,. 230 Fed. 545, 144 C. C. A. 599, L. R. A. 1916E, 1095; Shannon v. Boston &c. R. Co., 77 N. H. 349, 92 Atl. 167), a second suit for damages on account of the injury alleged in the first suit to have been inflicted while both the plaintiff and the defendant were engaged in interstate commerce could not be renewed or recommenced more than two years after the date of the alleged injury. It is likewise insisted that since the original suit sought a recovery under the Federal statute, the plaintiff could not, by the amendment changing the suit from one which sought a recovery for an injury occurring in the conduct of interstate commerce to one resulting while the plaintiff and the defendant were engaged in intrastate commerce, avoid the limitation fixed by the Federal statute as to actions for injuries arising under the Federal employer’s liability act. It is insisted further, that as the original suit was brought under the Federal employer’s- liability act, the suit as amended was not a renewal of that action, but was a distinct and separate action, and therefore was not protected by the provisions of the Civil Code, § 4381, allowing a plaintiff to recommence his suit within six months upon the same footing as to limitation with the original case.

Conceding that the original suit was clearly a suit brought under the Federal employer’s liability act, and that the allegations therein could only be thus construed, and that, as amended, the renewal suit (brought within six months from the dismissal of the original suit) was plainly ,a suit to recover damages for injuries resulting from the operation of a locomotive engaged in intrastate commerce, it is obvious that in both instances the cause of action was the alleged injury resulting from certain defects in the machinery or appliances connected with or attached to the locomotive. In other words, irrespective of whether the original suit was based on the Federal statute and the renewal suit as amended did not seek a recovery under that statute, but was based on the law of Georgia, the cause of action, the injury complained of, and the negligence bringing it about, were in both cases identical. City of Columbus v. Anglin, 120 Ga. 785 (48 S. E. 318); Ellison v. Georgia Railroad Co., 87 Ga. 691 (13 S. E. 809). In the second suit as amended the plaintiff sought a recovery for the same injury, on account of the same negligence, notwithstanding certain privileges flowing to him under the Federal statute were eliminated by the form of the action as finally amended. The “cause of action” in the original petition was not the Federal statute, but was the injury therein alleged; and so likewise, the cause of action in the renewal suit being the same injury, the second suit did not set up a new, distinct, or different cause of action from the original suit, and it clearly came within the provisions of section 4381, supra. The Supreme Court has repeatedly held that section 4381 should be construed liberally, so as to allow renewal where a suit is disposed of on any ground not affecting its merits (Atlanta, K. & N. Ry. Co. v. Wilson, 119 Ga. 781 (2), 47 S. E. 366); and it would be a very narrow construction of the statute to hold that because the plaintiff by amendment restricted his right to recover in the renewal suit, by striking out the allegations which denied to the defendant the opportunity to advance the doctrine of assumption of risk as a substantive defense, he changed the cause of action. If the original suit be brought in time, it is immaterial that it might become necessary for the plaintiff, by amendment, to deprive himself of the immunity from the defense of assumption of risk provided by the Federal statute, in order that he might hold the renewal suit in court, under the provisions of 'the State statute allowing a suit-for the same cause to be recommenced within six months, though at the time the cause of action was barred by the statute of limitations.

The plaintiff undoubtedly could have amended his original suit by striking out all reference to interstate commerce, and the case when finally dismissed would have been a suit not' depending upon the Federal employer’s liability act, and could therefore have been recommenced in the same form in a proper forum within six months from the time of its dismissal, notwithstanding it was recommenced after it had become barred by the statute of limitations. This being true, it appears equally obvious to us that the second suit could be amended to exclude therefrom all claim of recovery under and by virtue of the Federal employer’s liability act, and thus enable the plaintiff to renew it-under the provisions of section 4381 of the Civil Code, notwithstanding the suit as originally brought, was then barred under the provisions of the Federal act. Whether the plaintiff, on the trial of his case, can make it appear that he was engaged with the defendant in intrastate commerce at the time of his injury is not a matter for consideration at this time. The trial judge erred in sustaining the general demurrer and dismissing the petition. It is not necessary to consider the special demurrers.

Judgment reversed.

George and Luhe, JJ., concur.


text:
    8478.
    Ruth v. Savannah Electric Company.
    Decided July 26, 1917.
    Rehearing denied September 13, 1917.
   Luke, J.

The evidence did not establish the case as laid By the plaintiff; it was therefore not error for the court to grant a nonsuit.

Judgment affirmed.

Wade, O. J., and George, J., concur.

Action for damages; from city court of Savannah—judge Davis Freeman. 'December 18, 1916.

Oliver & Oliver, for plaintiff.

Osborne, Lawrence & Abrahams, for defendant.


author: George, J.

text:
    8602.
    Southern Railway Company v. Pitts.
    Decided July 26, 1917.
    Certiorari; from Gordon superior court—Judge Tarver. February 10, 1917.
    The petition for certiorari describes the suit as “an action for damages to steamer trunk in transit from Washington, D. C., to Atlanta; value $35.00;” and the answer to the certiorari admits that this is true.

      Maddox, McOamy & Shumate, F. A. Cantrell, for plaintiff in error. A. L. Henson, contra.
   George, J.

The railway company, a non-resident corporation, was sued in a justice’s court. The verdict was for the plaintiff, and the defendant presented its petition for certiorari to the judge of the superior court. The certiorari was overruled, and exceptions were taken by the defendant. The sole contention made before this court is that the justice’s court had no jurisdiction of the suit, inasmuch as the suit sounded in tort, and the cause of action did not arise in the district. It is not contended, but on the contrary is tacitly admitted, that the court had jurisdiction of the suit if considered as an action on the contract. The plaintiff’s pleadings are not set out in the petition for certiorari, and the magistrate did not incorporate in his answer or send up the summons in the case. This court is unable to say that the action was in tort. The meagre references in the petition for certiorari make it uncertain whether the suit should be considered as sounding in tort or in contract; and after verdict this court will give the suit such construction as will support the verdict. The judge of the superior court did not err in overruling the certiorari. See Fine v. Southern Express Co., 10 Ga. Ajpp. 161 (73 S. E. 35), and cases cited.

Judgment affirmed.

Wade, O. J., and Luhe, J., concur.


text:
    8652.
    Simpson et al. v. Schaefer.
   George, J.

1. The motion to dismiss the writ of error is without merit. 2. This was an action for damages for breach of a parol contract for the sale and delivery of 220 bales of cotton, of the value of $13,000. The buyer neither accepted nor received any portion of the cotton, and neither gave earnest money to bind the bargain, nor paid any part of the purchase price. There was nothing to take the contract out of the statute of frauds. Civil Code (1910), § 3221 (7). Cason v. Cheely, 6 Ga. 554; Bowers v. Anderson, 49 Ga. 143. The court erred in overruling. the motion for a new trial.

Decided July 26, 1917.

Action on contract; .from Stephens superior court—Judge J. B. Jones. November 6, 1916.

Fermor Barrett, for plaintiffs in- error.

Davis & Davis, contra.

Judgment reversed.

Wade, C. J., and LuJce, J., concur.


text:
    7966, 7970.
    SMALL, adm’r, v. WILSON, and vice versa.

    1. The amendment of the plaintiff’s petition in its description .of the certificate of stock sued for, and the amendment as to the amount of money for which the stock was pledged, did not change the cause of action, and the court did not err in allowing the amendments.
    2-4. Where an administrator lent money of the- estate represented by him, and a certificate of stock of a corporation was delivered to him as collateral security for the promissory note given for the loan, and the pledgor afterwards borrowed the certificate for the purpose of using it as collateral security for another loan, agreeing to return it after that purpose had been served, and he refused to return It on demand as agreed, the administrator could maintain bail-trover for the recovery of the certificate.
    5. The plaintiff proved his case substantially as alleged, and the trial judge erred in awarding a nonsuit. Certain conclusions stated by the plaintiff in his testimony in his own behalf should have been rejected by the court, but failure to exclude these conclusions will not require a reversal on defendant’s cross-bill of exceptions.
    Decided July 26, 1917.
    Rehearing denied September 19, 1917.
    Bail-trover; from city court of Macon—Judge Guerry. September 23, 1916.

      W. D. McNeil, for plaintiff.

      Hardeman, Jones, Parle & Johnston, Harry 8. Strozier, T. 8. Felder, for defendant.
   George, J.

Small, as administrator of the estate of Hanson, brought trover against Wilson, and alleged that Wilson was in possession of certain property, to wit, “one hundred shares of Georgia Casualty Company stock, evidenced by certificate No. 33, later changed to certificate No. 166, of the value of $6,000 par,” to which the plaintiff claimed the right of possession by reason of the following facts: In June, 1913, Wilson borrowed of the plaintiff, as administrator aforesaid, the sum of $6,225, and pledged this stock with the plaintiff, as collateral security for the loan; and afterwards borrowed it of the plaintiff for the purpose of using it as collateral security for some other loan, and agreed to return the stock as soon as the purpose for which it was borrowed was served; and, after the purpose for which the stock was borrowed had been served, Wilson, on demand, refused to deliver the property to the plaintiff. The plaintiff made the affidavit authorized by the code for the purpose of having the property seized by the sheriff, and it appears that the defendant gave the bond provided by the statute, and retained possession of the property.

The plaintiff amended his petition by striking 33' as the number of the certificate and inserting in lieu thereof No. 53, and by adding that certificate No. 166 was later converted into certificate No. 172, and was so numbered when demand was made on the defendant therefor. The amendment was allowed, over the objection that it set out a new cause of action, in that, the suit, as originally brought was “for certain described certificates of stock, while the amendment sought to convert it into an action for other and distinct certificates''of stock.” The defendant filed exceptions pendente lite, and in his cross-bill of exceptions insists that the. court committed error in allowing the amendment. It will be noted that the original suit described the shares of stock as “evidenced by certificate No. 33, later changed to, certificate No. 166.” The effect of the amendment was to describe the stock as evidenced by No. 53, later changed to certificate No. 166, and still later changed to certificate No, 172. The original petition alleged also that the particular stock, the subject-matter of the litigation, was pledged by the defendant to the plaintiff to secure a certain loan, and that thereafter the defendant borrowed of him the particular stock, for the purpose of using it as collateral for another loan, and agreed to return the stock as .soon as that purpose was served.

We think the amendment was properly allowed. The trover suit otherwise so identified the property sued for as to make it clear that the amendment did not set out a new and distinct cause of action, but simply corrected a mistake made in the original petition in designating the stock by a wrong number. The allegations of the original petition wore sufficient to show that the amendment did not change the identity of the stock or certificate sued for in the first instance, and it was permissible to add further descriptive terms to show the number of the certificate representing the shares of stock at the time of the trial. Allen v. Stephens, 107 Ga. 733 (33 S. E. 651); Polhill v. Brown, 84 Ga. 338 (10 S. E. 921). A mere clerical mistake in describing the certificate of stock, or a failure to give a full and complete description, may be cured by amendment, provided, however, that it is apparent from the two descriptions that in both instances the pleader had in mind the same stock certificate. King v. Wright, 77 Ga. 581; Hogans v. Dixon, 105 Ga. 171 (31 S. E. 422).

The plaintiff further amended his petition by alleging that the amount borrowed by the defendant was $6,250, instead of $6,225, as alleged in the original petition. This amendment was objected to on the ground that it set. out a new cause of action, since the original suit was for stock deposited as collateral to one debt described in the petition, and the amended suit was for collateral for an entirely different and distinct debt. The court overruled this objection and allowed the amendment. The defendant excepted pendente lite to this ruling. Surely this amendment was properly allowed. While the precise question here presented was not involved in the case of Witt v. Nesar, 145 Ga. 674 (89 S. E. 747), the decision in that case is in principle controlling upon the'exception taken to the allowance of this amendment.

After the plaintiff had closed his evidence, the defendant made an oral motion, in the nature of a general demurrer, to dismiss the plaintiff’s petition because it set out no cause of action. The court overruled this motion, and the defendant excepted to this ruling and contends that the suit, as disclosed by the amendment, was for shares of stock, and that shares of stock are intangible property incapable of seizure; that the plaintiff’s action had become the common-law action of detinue, wherein it is necessary that the specific property described be seized;' and therefore that the action was not maintainable. It is undoubtedly true that trover in Georgia embraces the common-law actions of trover, detinue, and replevin. At common law, trover was an action for damages for conversion of personalty; replevin was an action to recover specific chattels unlawfully taken and wrongfully withheld; while the action of detinue was allowable to recover specific chattels wrongfully retained, though lawfully acquired. In replevin the gist of the action vms the wrongful taking of the chattels, in detinue the unlawful detention of the chattels. 3 Bl. Com. 146 et seq; 1 Chitty’s Pl. (16 Am. ed.) 181; see also Mitchell v. Georgia & Alabama Ry., 111 Ga. 760, 762 (36 S. E. 971, 51 L. R. A. 622). In the common-law action of detinue the property sued for must have been tangible, corporeal, personal property, capable of seizure. We think it must be accepted as true that shares of stock, as such, are not chattels; they bear a eloser resemblance to choses in action; and, properly speaking, they are merely evidence of property. Shares in a corporation are generally said to be incorporeal personal property. Greene County v. Wright, 126 Ga. 504, 509 (54 S. E. 951); Oliver v. Oliver, 118 Ga. 362 (3) (45 S. E. 232); 7 Words & Phrases, 6662. It was well established at common law that trover would lie for stock in a corporation. All the authorities support this doctrine. An examination of the cases will show that the courts deciding them mean by trover the common-law action of trover,—that is, the action for damages for the conversion of the stock,—and these damages were generally held to be equal to the value of the stock converted. See 38 Cyc. 2012; 28 Am. & Eng. Enc. L. 651, 652, and authorities there cited; Bowers on Conversion (1917), § 21. According to 2 Cook on Corporations, § 576, p. 1585, the doctrine that trover (in its common-law sense) will lie for shares of stock is accepted as sound, except by the courts of Pennsylvania. Attention is called by the author to the decision in Neiler v. Kelley, 69 Pa. 403, where it is held that trover will not lie for “shares of stock,” but may be maintained for the certificate.

Counsel for the defendant contend that bail-trover in this State is the equivalent of detinue at common law, and that trover, aided by a bail proceeding, can therefore .be brought only for tangible, corporeal property. We have no disposition to controvert the assertion that the common-law action of detinue would not lie for the recovery of corporate stock, as distinguished from the certificate evidencing such stock. We recognize that the reasoning in Hudson v. Goff, 77 Ga. 281 (3 S. E. 152), and McElhannon v. Farmers’ Alliance Co., 95 Ga. 670 (22 S. E. 686), would indicate that the suing out by the plaintiff of a bail process in aid of a trover proceeding converts the trover proceeding into the common-law action of detinue. Perhaps it would be more accurate to say that bail-trover, under the laws of this State, partakes rather of the nature of detinue, and that the specific chattel wrongfully withheld must in such case be so described and be of such a nature as to permit of actual seizure.

The foregoing discussion is beside the point made by the defendant in his cross-bill of exceptions. It will be recalled that, after the plaintiff had closed his case, the defendant submitted his oral motion to dismiss the plaintiff’s petition because it set out no cause of action. The question therefore is: ' Did the petition set out any cause of action? The petition as amended may have been susceptible of the interpretation given it by the defendant, but it certainly admits of the construction that the suit was for a certificate of. stock. Indeed, words are to be interpreted according to their ordinary meaning. The petition alleged that the defendant was in possession of stock evidenced by a certain certificate. The reference is certainly to the physical evidence of the stock, and not to the intangible and incorporeal thing known as “capital stock.” The petition further alleged that this stock had been pledged as collateral security for a loan made by the plaintiff to the defendant, and that the defendant afterwards borrowed it of the plaintiff for a particular purpose. The reference undoubtedly is to the certificate, as distinguished from stock in its technical sense. The amendment identified the particular certificate; and, if the petition and the evidence offered in its support showed a good cause of action for either the stock or the certificate, the court properly overruled the oral motion to dismiss. See, in this connection, Godfrey v. Pell, 49 N. Y. Super. Ct. 226, where it is held that the action for conversion will lie even though the plaintiff used the term “shares of stock” and “certificates of stock” interchangeably. The action of trover, aided by bail process, under the law of Georgia, is certainly not less broad than trover at common law.

The court granted a nonsuit, and in the’ main bill of exceptions this is assigned as error. . The motion for nonsuit was based upon three grounds: (1) “The evidence shows that the action is for shares of stock, and bail-trover does not lie to recover shares of stock.” What we have already said disposes of this contention-of the defendant, adversely to him. (2) The second ground is that that “under the evidence introduced and the law applicable thereto, there never was a valid pledge of the stock.” It is needless to discuss the essentials of a valid pledge. The evidence in this record shows that Small, the administrator, had at one time the physical, manual possession of the certificate of stock described in his suit. Wilson borrowed of Small either the certificate as it existed at the time of the trial, or the writing evidencing the same 100 shares of stock described in the action. .We have no doubt that bare possession of a chattel was title upon which the plaintiff could base his action in trover, or detinue, at common law. The doctrine has been somewhat confused in this State, but, as against a wrong-doer, the true rule at common law authorized the recovery of personal property, or damages for its conversion, upon mere possession. Of course, mere possession was not sufficient to defeat the title of .the true owner. While Wilson was the owner of the stock pledged to Small, nevertheless Wilson’s wrongful detention of the stock, under the evidence in this case, was sufficient to authorize the recovery by Small even as against Wilson. If the defendant borrowed the stock of the plaintiff, who at the time held actual possession of it, as is disclosed by the evidence, the defendant would hardly be in position to dispute the plaintiff’s title. There is nothing in Mitchell v. Ga. & Ala. Ry., supra, that militates against this position. It was there held by a divided court that mere possession of a chattel wil give a right of action for any interference therewith, but that such possession must be in the plaintiff’s own right, and not as agent for another. Even if this is a true interpretation of the law of this State upon this subject, Small was administrator of Hanson’s estate. He made a loan out of the proceeds of that estate to Wilson. He took a note payable originally to himself as administrator, or to the estate of Hanson. Later the note was renewed in the name of Mrs. Hanson, as payee? followed by the words, in brackets, “W. E. Small, Adm’r.” The original and every renewal note, including the note offered in evidence and payable as indicated, was retained by Small, —that is, was not delivered to Mrs. Hanson. He was liable to the estate, or to the beneficiaries thereof, for money loaned by him to Wilson. The legal title to the stock did not pass to the payee named in the note, because the stock was never indorsed to her. Small had in his physical possession the stock certificate. He had such an interest in this certificate as will support his action, even under the rule in Mitchell v. Ga. & Ala. Ry., supra. In this general connection, attention is called to the well-considered opinion of the English Court of Appeals, in “The Winkfield case,” 3 British Ruling Cases, 368. The English court held, that “in an action against a stranger for the loss of goods caused by his negligence, the bailee in possession can recover the value of the goods, although he would have had a good answer to an action by the bailor for damages for the loss of the thing bailed,” and overruled Claridge v. South Statfordshire Tramway Co., 1 W. B. 422, 61 L. J. Q. B. N. S. 503, 66 L. T. N. S. 655, 56 J. P. 408. After an exhaustive discussion of the English cases, the doctrine is declared, that, at common law, possession of a chattel was title as against a wrong-doer, and that a bailee could recover not because of his special or general interest in the thing bailed, but upon his possession of the thing bailed; that the basis of his recovery was not because he was liable over to the true owner, but, upon first principles, he was liable over because he had the cause of action, by reason of his possession, for the recovery of the thing bailed, or for damages for its conversion. The elaborate notes to this decision in 3 British Ruling Cases, commencing at page 388, very clearly demonstrate that the conception of the dissentient judge in the Georgia case of Mitchell v. Georgia & Alabama Ry., supra, was the true conception.

The third and last ground upon which the motion to non-suit was predicated is as follows: “Plaintiff failed entirely to show title to the stock sued for.” What we have just said above perhaps sufficiently disposes of the last contention made on the part of the defendant. However, it is pertinent to remark that Small’s action was not based upon the promissory note secured by the stock certificate. The allegations in his petition with reference to the loan and the note evidencing the same are merely by way of inducement. It made no difference how the loan made by Small to Wilson was evidenced at the time of the bringing of the suit. The certificate of stock was placed in the physical possession of Small for the purpose of securing the debt, and for the purpose of protecting him in his fiduciary capacity as administrator of the estate.

Much stress is laid upon the contents of a letter written by Small to Wilson, and exhibited to Small while on the stand. The letter referred to a particular certificate evidencing the 100 shares of stock described in the trover suit. It stated that this certificate was at the date of the letter held by the Citizens National Bank of Macon, as collateral to a particular note (other than the note given by Wilson to Small as administrator) “which is full amount now due by you for which this stock is collateral.” Counsel for the defendant insist that the nonsuit was proper and necessary in view of this letter and the admissions made by Small in connection therewith. Small testified that this letter meant exactly what it said, but in his testimony he explained the meaning as follows: “I meant that was all the stock was behind on the note at that time. That was the full amount of the note he owed. As soon as it was paid, it (the stock) was to go back behind the Hanson note.” The testimony of the plaintiff, taken as a whole, clearly indicates that he did not in this letter refer to any indebtedness due by Wilsoii to himself as administrator, but referred only to the indebtedness of Wilson to the bank. Even if this was a very serious admission, nevertheless, in view of the explanation offered, the issue was for the jury. Without' further discussion of the evidence, it is sufficient to say that the plaintiff proved his case substantially as alleged.

The cross-bill of exceptions complains of the ruling of the court in admitting certain evidence. This evidence, including the two unsigned writings submitted by the defendant to the plaintiff, and the letter from the defendant to the plaintiff, was properly admitted. However, certain conclusions of the plaintiff, stated in his testimony as a witness in his own behalf, should have been rejected by the court. Failure to exclude the mere conclusions of the plaintiff will not, however, require a reversal of the judgment on the cross-bill of exceptions. It follows from the foregoing that the nonsuit was improperly awarded.

Judgment reversed on the main hill of exceptions, and affirmed on the cross-hill.

Broyles, P. J., and Jenlcins, J., concur.


author: Jenkins, J.

text:
    8190.
    TURNER LUMBER CO. v. HENDERSON LUMBER CO.
    1. The covenant of general warranty of title to the timber described in the conveyance on which was based the defendant’s claim of breach of warranty is to be construed in connection with the other parts of the deed and with the contemporaneous written agreement of the parties to the conveyance. “If a deed purport to convey the right, title, and interest of the grantor in and to certain described realty, instead of conveying the realty itself, the covenants in the deed will be limited to the right or interest which the grantor has in the property.” The conveyance here construed, however, although it expressly conveys tha grantor’s “right, title, and interest” in the timber described, contains language which, taken in connection with the contemporaneous written agreement, shows that it was intended .to operate as a conveyance of the timber itself; and therefore the covenant of general warranty is • not to be construed as limited to the right or interest of the grantor.
    2. The jury were authorized to find that there was a breach of warranty of title to the timber which was the consideration of the note sued on, and that such other facts existed as were necessary to sustain the plea of failure of consideration; and, under the evidence, it was a question for the jury whether the circumstances were sufficient to have put the plaintiff on notice of this defense before purchasing the note.
    Decided July 26, 1917.
    Rehearing denied August 2, 1917.
    Complaint; from Irwin superior court—Judge George. August 18, 1916.
    The J. C. Turner Lumber Company, as transferee, sued the Henderson Lumber Company upon a promissory note of the Dickson-Henderson Lumber Company (the name of which was changed to Henderson Lumber Company), for $6,860 principal, besides interest and attorneys’ fees, dated December 11, 1907, and payable June 10, 1908, to the Taylor-Cook Cypress Company. The note recites that it “is a renewal of note given for timber on lot 165 in 4th district Irwin county, Georgia, under contract dated Aug. 13th, 1906.” A deed dated August 13, 1906, from the Taylor-Cook Cypress Company to the Henderson Lumber Company, refers to notes which include the original note, and states that in consideration thereof the party of the first part “has granted, bargained, sold, and conveyed, and does by these presents grant, bargain, sell, and convey unto the said party of the second part, and to its' successors, heirs, and assigns, all its right, title, and interest in and to the following described timber in Irwin county, Georgia, to wit: “the timber on lot number one hundred and sixty-five” etc., “more particularly described in a deed of conveyance from Dickson & Dorminy . . to the Garbntt Lumber Company, . . recorded” in a designated book; whieh deed conveyed the timber described. Certain timber upon other described lots of land and for other and different considerations was also conveyed by this deed. In the habendum clause of the deed is the following language : “together with all and singular the rights, members, easements, hereditaments, and appurtenances unto the same belonging or in any wise appertaining; it being the intention hereby to transfer, assign, and convey unto the said party of the second .part, its successors, heirs, and assigns, all of the rights, powers, privileges, and timber [italics ours] described in the respective conveyances hereinbefore referred to and thereby undertaken to be conveyed, and no more, and excepting herefrom any such timber as may have heretofore been cut and removed.” The covenant of warranty in the deed is as follows: “And the said party of the first part,-for itself, its successors, and assigns, will warrant and forever defend unto the said party of the second part, its successors, heirs, and assigns, the right and title to the above-described property against the claims of itself, the said first party, and of all persons claiming by, through, or under it, and as well against the claim or claims of all and every other person or persons whomsoever, claiming or to claim the same.” The note sued on in this case was the last to mature of the purchase-money notes, and it was stipulated in the deed that no timber on any tract should be cut or removed until payment of the notes given therefor.
    On the date of the execution of the original note and deed the Taylor-Cook Cypress Company and the Henderson Lumber Company entered into an agreement which refers to the making of the deed and-the stipulations therein contained, and recites: “Whereas the said first party has this day made, executed, and delivered unto the second party a deed of conveyance to certain timber, including certain timber upon land lot number one hundred and sixty-five (No. 165) in the fourth land district, Irwin county, Georgia, in which deed of conveyance it is stipulated that the said second party should have no right to cut any of said timber until a certain promissory note for sixty-eight hundred and sixty dollars therein described had been paid off in full; and whereas the aforesaid deed of conveyance is a warranty deed, and the parties desire to ascertain formally whether there is any valid outstanding claim to any portion of said timber upon said land lot No. 165 as promptly as possible, and for that reason the second party desires to cut some portion of the timber from said lot No. 165, in order to bring on a litigation as to the title to said timber, if any such there is to be; now, therefore, in consideration of the premises and of the sum of ten ($10.00) dollars cash to the first party by the second party paid (the receipt whereof is hereby acknowledged), the first party agrees that the second party, its successors, heirs, and assigns, may, without the prior payment of said ■ promissory note, proceed to cut not- more than ten acres of said timber on said lot 165, without prejudice, however, to the validity and binding force of the aforesaid promissory note; and whereas, the two last of the notes for the purchase price of the property conveyed are recited in said deed as being due six (6) and nine (9) months respectively after the date thereof, but by subsequent agreement between the parties, as a part of said transaction,-the due dates of said two notes, to wit, for $4,200.00 and $6,860.00 principal respectively, are and shall be in accordance with said subsequent agreement, nine (9) and twelve (12) months respectively from date, instead of six and nine months as recited in said deed of conveyance.” This agreement was properly executed and duly recorded.
    The Henderson Lumber Company filed an answer, in which a prima facie ease for the plaintiff was admitted, and which in effect was a plea of total failure of consideration, showing that the note sued on was a renewal of a note given on August 13, 1906, for the purchase price of the timber on lot 165 in the 4th district of Irwin county, Georgia; that the Taylor-Cook Cypress Company, when it conveyed the timber to the defendant, did not have title thereto; that this was unknown to defendant then and at the time it gave the several renewal notes, including that sued on; that the plaintiff was not a bona fide holder for value of the note, but that when the note was assigned to it, and even at the time of its execution, this lack of consideration was known to it, and that the Taylor-Cook Cypress Company was insolvent. In amplification of its plea of failure of consideration, the defendant showed that before it became possible for it to enter upon the said premises for the purpose of removing timber, the Taylor-Cook Cypress Company became involved in litigation as to its title thereto, and that during that time and before an adjustment of the title, whereby the Taylor-Cook Cypress Company became the actual owner of the timber, the then true owner allowed the boxing of the timber and the removal of the turpentine thereform, and also caused the removal of a certain portion of the bargained timber for cross-ties; that, despite the fact that the price of lumber had enhanced, the timber on said tract was, by reason of these facts, worth much less than when it was conveyed to defendant. The defendant further alleged that before the Taylor-Cook Cypress Company came into actual and legal possession of the remainder of the bargained property, the defendant had been forced to move its tramroad and machinery from that vicinity, and that for this reason the timber had become entirely worthless to it.
    The trial of the case resulted in a verdict for the defendant. The plaintiff filed a motion for a new trial, on the general grounds that the verdict was contrary to law and the evidence, etc., and, the motion being overruled, exceptions were taken.

      Philip Newbern, Wilson & Bennett, for plaintiff.

      Quincey & Bice, Bldridge Cutis, for defendant.
   Jenkins, J.

(After stating the foregoing facts.)

If the conveyance which constituted the consideration of the original note was merely of such right, title, and interest in the timber described as belonged to the grantor, then the maker of the note could not plead a failure of consideration, by reason of the assertion of the enforcement of a paramount title outstanding against the grantor at the time of the execution of the conveyance. Therefore, the first question for determination is whether the intent of the instrument quoted from was to convey the timber itself as described, with a warranty of title thereto, or whether it sought only to pass such right, title, and interest as the grantor had and owned therein. In White v. Stewart, 131 Ga. 460 (63 S. E. 590, 15 Ann. Cas. 1198), it was held: “If a deed purport to convey the right, title, and interest of the grantor in and to certain described realty, instead of conveying the realty itself, the covenants in the deed will be limited to the right or interest which the grantor has in the property. . . Covenants of title do not apply to land not included in the conveyance.” The principle of law thus laid down appears to be well settled by the decisions of various courts and lias been clearly stated by text-book -writers. In McDonough v. Martin, 88 Ga. 675 (16 S. E. 59, 18 L. R. A. 343), the Supreme Court of this State said: “If the conveyance is oply of the grantor’s right, title, and interest in the land, the , scope of it is not enlarged by a general covenant, but such covenant must be limited, to fit the .subject conveyed;” citing 1 Warvelle on Vendors, 421. (§ 8); Allen v. Holton, 20 Pick. (Mass.) 458; Sweet v. Brown, 12 Met. (Mass.) 175 (45 Am. D. 243); McNear v. McComber, 18 Iowa, 12; Gee v. Moore, 14 Cal. 472; Kimball v. Semple, 25 Cal. 440; Bates v. Foster, 59 Me. 157 (8 Am. R. 406); Gibson v. Chouteau, 39 Mo. 536; Young v. Clippinger, 14 Kans. 148; Stockwell v. Couillard, 129 Mass. 231. Thus it clearly appears that the conveyance under consideration can not be adjudged a warranty deed merely because the covenant of warranty [tself is general and purports to warrant- the title to the bargained timber against the claims of all persons whomsoever. As we have already seen, the scope of the conveyance is measured and limited by the terms of the grant itself, and is not to be enlarged by general terms in the covenant of warranty, should they obligate the grantor to defend that which it was not the intention of the instrument to convey. See also: Coe v. Persons Unknown, 43 Me. 436; Hanrick v. Patrick, 119 U. S. 156 (7 Sup. Ct. 147, 30 L. ed. 396); Emeric v. Alvarado, 90 Cal. 444 (27 Pac. 356).

In the McDonough case, supra, the granting clause of the deed contained this language: “ Said parties of the ■ first part . . have granted, bargained, sold, remised, conveyed, released, and quitclaimed, and by these presents do grant, bargain, sell, remise, convey, release, and forever quitclaim unto said parties of the second part, in their full possession and seizin, and to their heirs and assigns, the following lots of land, and all the estate, right, title, interest, use, trust, property, claim, and demand whatsoever, both at law and in equity, of said parties of the first part of, in, to, or out of all those lots, tracts, or parcels of land,” etc. The deed in that case contained a clause of warranty against those claiming under the grantor, but did not contain the usual covenant of general warranty. The question there involved was whether such a covenant could be implied from a recital contained in the instrument that title was in the grantor, as evidenced by a certain deed; and it was held: “Where the terms of a deed of conveyance, taking the whole together, show that the instrument is in its essence a quitclaim title, and that the makers intended no warranty except as against themselves and their own acts, a failure of the title to two of the lots out of a great number covered by the conveyance, by reason of the existence of a previous outstanding better title, will be no breach of any implied covenant arising out of a recital of facts or out of the use of words of conveyance, no fraud or intentional misrepresentation being alleged. Nor will the failure of the vendees to get or to hold possession of such two lots, without any fraud or misconduct on the part of the vendors, constitute a defense to an action for the purchase-money or any part thereof.” In the opinion in that ease it was said: “The true rule is to view the recital in the light cast on it by the rest of the deed- and give effect to the intention as a consistent whole.” Thus it is that in construing the instrument now under consideration, the intent is to be ascertained from the language employed in the .entire instrument, including the agreement entered into by the same parties and on the same date which purports to express the meaning and intent of the original instrument. While it is true that the covenant of general and unlimited warranty could not by and of itself be held sufficient to enlarge the estate conveyed, if the terms of the grant are otherwise plainly restricted, still in arriving at the true intent and meaning of the instrument such a covenant, together with all else contained in the writings, should be weighed and considered together. Bevan v. Muir, 53 Wash. 54 (101 Pac. 485, 32 L. R. A. (N. S.) 588, 598, and note).

In the instrument before us the “right, title, and interest” of the grantor in and ty the timber on lot number 165 is conveyed, and the title thereto is warranted both as against those claiming under the grantor and as against the claims of all persons whomsoever. A more particular description of the subject-matter of the sale is made therein by reference to a former recorded deed from Dickson & Dorminy to the Garbutt Lumber Company, which conveyed the timber described; and the habendum clause of the deed now under consideration contains this.statement: “It being the intention hereby to transfer, assign, and convey unto the said party of the second part, its successors, heirs, and assigns, all of the-rights, powers, privileges, and timber [italics ours] described in the respective conveyances hereinbefore referred to and thereby" undertaken to be conveyed, and no more, and excepting herefrom any such timber as may have heretofore been cut and removed.” It would thus seem that the true purpose and intent of the grantor was to sell the “timber described in the respective conveyances hereinbefore referred to,” as well as the “rights, powers, and privileges” belonging to the grantor therein, except that it was the purpose of the grantor to make plain his intent not to include in such sale, any timber, which might have been embraced in the recorded description referred to but subsequently removed, but to include only such timber as remained on the described premises at the date of the conveyance" to the defendant. The light which this clause appears to us to throw upon the meaning and intent of the instrument, when taken in connection with the express statement contained in the collateral agreement, wherein it is stated in plain and unambiguous terms that the original conveyance was in fact a warranty deed, and when construed also in the light of the clearly expressed general and unlimited covenant of warranty contained in the deed itself, brings us to the conclusion that the deed from the Taylor-Cook Cypress Company to the Henderson Lumber Company must be held to contain a general and valid warranty of title.

We are satisfied that the jury were authorized to find that there was a breach of the warranty and that such other facts existed as were necessary to sustain the plea of failure of consideration. The only remaining question, therefore) is whether or not the plaintiff occupied the position of a bona fide holder of the note sued on, and consequently was not subject to such a defense. The learned counsel for the plaintiff in error, in their very able brief, contend that since the holder of a negotiable note is presumed to be the bona fide owner thereof and for value, and that a prima facie ease was admitted by the defendant in its answer, the verdict can not be sustained, because the defendant has failed to negative either of these facts necessary to its defense. This, of course, it was incumbent upon defendant to do. First National Bank of Etowah v. Messer, 136 Ga. 226 (71 S. E. 148); Spiller-Beall Co. v. Hirsch, 18 Ga. App. 450 (3) (89 S. E. 587). The note sued on recited on its face that it was a renewal of the note given for timber on lot 165 in the fourth district of Irwin county, under contract dated August 13, 1906. This recital is sufficient to carry with it such notice as to charge a purchaser with knowledge of the contract to which reference is made. Montgomery v. Hunt, 93 Ga. 438 (28 S. E. 59); Adams v. Hatfield, 17 Ga. App. 680 (87 S. E. 1099); Davis v. Brown, 94 U. S. 423 (24 L. ed. 204); Wood v. Ridgeville College, 114 Ind. 320 (16 N. E. 619); 7 Cyc. 956 IX; McNamara v. Gorgett, 68 Mich. 454 (36 N. W. 218, 13 Am. St. R. 355); Sutton v. Beckwith, 68 Mich. 303 (36 N. W. 79, 13 Am. St. R. 344); McClelland v. Norfolk Railroad Co., 110 N. Y. 469 (18 N. E. 237, 1 L. R. A. 299, 6 Am. St. R. 397); McClure v. Oxford, 94 D. S. 429 (24 L. ed. 129); Williams v. Moody, 95 Ga. 8 (22 S. E. 30). Despite this being true, however, it is a well-recognized principle of law that knowledge by the purchaser of a negotiable instrument as to what constitutes the consideration thereof, even though such be recited in the face of the note itself, does not deprive the holder of his rights as a bona fide purchaser, unless he has also what amounts to notice that such consideration has failed. Spiller-Beall Co. v. Hirsch, supra; Bank v. Barrett, 38 Ga. 126 (95 Am. D. 384); Post v. A. & W. P. R. Co., 99 Ga. 232 (25 S. E. 405); Citizens Bank v. Greene, 12 Ga. App. 49 (76 S. E. 795); Simmons v. Council, 5 Ga. App. 286 (63 S. E. 238); Brooks v. Floyd, 12 Ga. App. 530 (77 S. E. 877); Hudson v. Best, 104 Ga. 131 (30 S. E. 688); Stubbs v. Bank, 12 Ga. App. 539 (77 S. E. 893); McMillan v. Bank, 13 Ga. App. 23 (78 S. E. 734); Morrison v. Hart, 122 Ga. 660 (50 S. E. 471); McManus v. Cash Co., 143 Ga. 623 (85 S. E. 858). Section 4291 of the Civil Code of 1910 declares that “Any circumstances which would place a prudent man upon his guard, in purchasing negotiable paper, shall be sufficient to constitute notice to a purchaser of such paper before it is due.” It was held by this court in Park v. Buxton, 10 Ga. App. 356 (73 S. E. 557), that “The character and sufficiency of the circumstances in a particular case which should place a prudent man on his guard are to be determined as questions of fact by the jury, and not by the judge as questions of law.”

In addition to what has been outlined in the statement of facts preceding this opinion, it was shown, that J. C. Turner was the president both of the Taylor-Cook Cypress Company, the payee of the note, and of the J. C. Turner Lumber Company, the plaintiff, and that as president of the former company he signed the deed we have heretofore discussed, for the sale of the timber involved in the suit; that the treasurer of the Taylor-Cook Cypress Company was the vice-president of the Turner Lumber Company, and that J. C. Turner was the principal stockholder in each of the corporations. It was also shown that the J. C. Turner Lumber -Company held, as security for a debt of $100,000, a trust mortgage given by the Taylor-Cook Cypress Company on the mortgagor’s property, including the timber conveyed to the defendant, and that a release of this lien was procured by J. C. Turner, as president of the plaintiff company, in favor of the defendant, in order to effect the sale, and that it was in consideration of this release that the note was assigned to the plaintiff. While we think the consideration of the note sued on was the sale of the timber, and not, properly speaking, the release of the mortgage by the J. C. Turner Lumber Company, still we think the facts and circumstances we have enumerated could properly be considered by the jury in determining whether there were circumstances which should have reasonably put the plaintiff company on notice in the purchase of the note. If it could properly be said that the consideration for the note had been actually furnished by the plaintiff, that fact of itself would be sufficient to take from the plaintiff the status of a bona fide holder. Empire Insurance Co. v. Avery, 3 Ga. App. 97 (59 S. E. 324). Thus it was that the plaintiff, under the foregoing circumstances, came into possession of the note for the stated purchase price of certain timber, under contract of sale, which included a warranty of title, as we have construed that instrument; and it is seen, from the amended agreement relating to the sale, that doubt was expressed as to the title to the timber, and an arrangement was made whereby the title might be tested as speedily as possible.

In view of all these circumstances, taken together, we think it was properly a question for the jury, under the evidence, to determine whether the purchase was bona fide, or whether there was enough to have placed the plaintiff company on its guard before becoming the owner of the paper.

Judgment affirmed.

Broyles, P. J., and Bloodworth, J., concur.


author: Broyles, P. J.

text:
    8624.
    WATKINS MEDICAL CO. v. MARBACH et al.

    1. A contract of suretyship, and not of guaranty, is made where, in a writing signed by persons designated therein as sureties, in consideration ofJ one dollar paid by a named company and the execution of a contemporaneous agreement between the company and a third person for the sale of goods to him by it, and an extension of the time of payment of his existing indebtedness to it, the persons signing as sureties promise and “guarantee” the payment of that indebtedness and payment for the goods as provided in the agreement referred to.

      (а) The dollar which is a part of the consideration stated is not such a benefit to the parties signing as sureties as is contemplated by the section of the code which says that a contract of suretyship “differs from a guaranty in this, that the consideration of the latter is a benefit flowing to the guarantor” (Civil Code of 1910, § 3538) ; the substantial consideration for this contract being the credit and indulgence given to the third person named.
    (б) A fundamental distinction between a guaranty and suretyship is that in a contract of guaranty the person obligating himself to pay the debt of another is primarily, and not merely secondarily, liable for its payment.
    2. The court erred in holding that the contract sued upon was one of guaranty, and in sustaining the demurrer to the petition.
    Decided July 26, 1917.
    Complaint; from Jenkins superior court—Judge Henry C. Hammond. March 12, 1917.

      Thomas L. Hill, for plaintiff, cited:
    Civil Code (1910), §§ 3538-41; Brandt on Suretyship (3d ed.), 2; Small Co. v. Claxton, 1 Ga. App. 83; Baggs v. Funderburke, 11 Ga. App. 173; Maril v. Boswell, 12 Ga. App. 41; McClain v. Georgian Co., 17 Ga. App. 648; Fields v. Willis, 123 Ga. 272; Watters v. Hertz, 135 Ga. 804; Dale v. Christian, 140 Ga. 790; Manry v. Waxelbaum Co., 108 Ga. 14; McIntosh-Huntington Co. v. Reed, 89 Fed. 464; Pearsell Mfg. Co. v. Freys, 105 Am. St. R. 496-7; Spriggs v. Bank, 10 Pet. (U. S.) 257; Houck v. Graham, 106 Ind. 195; Exeter Bank v. Stowell, 16 N. H. 61; Coots, v. Farnsworth, 64 Mich. 497; Krutsinger v. Brown, 72 Ind. 466; Auchampaugh v. Schmidt, 77 Iowa, 213, 217.

      F. K. Overstreet, for defendant, cited:

      Manry v. Waxelbaum Co., supra; Civil Code (1910), § 3538; Sims v. Clark, 91 Ga. 302 (1); Musgrove v. Luther Pub. Co., 5 Ga. App. 283-4.
   Broyles, P. J.

This was a suit on a contract, brought by the J. R. Watkins Medical Company against F. A. Marbach, as principal, and A. D, Lawrence and W. R. Rabitsch as sureties. Lawrence demurred to the petition, on the ground that the action could not be maintained, .because it was proceeding against a principal and guarantors in the same action, and this was not legally permissible. This demurrer was sustained, the court holding that the contract was one of guaranty, and- not of suretyship. To this judgment the plaintiff excepted. The only question for determination by this court is whether the contract was one of guaranty, or of suretyship.

The contract signed by the medical company and by Marbach, the principal, contained the following (among other) provisions: “For and in consideration of the promises and agreements hereinafter contained, to be kept and performed by the party of the second part [Marbach], the company promises and agrees to sell and deliver to the party of the second part, free on board cars at Winona, Minnesota, or, at its option, at any of its regular places of shipment, any and all medicines, extracts, and other articles manufactured or sold, or which may hereafter be manufactured or sold by it, at the usual and customary wholesale prices, as the-party of the second part may' reasonably require for sale by him from time to time, from the date hereof until the first day of March, 1915, as hereinafter provided, in' the following described territory excepting the incorporated municipalities therein located, to wit: In the State'of Georgia, all of Jenkins county. . . The indebtedness due at the date of this agreement from the party of the second part to the party of the first part for goods and other articles sold and delivered to him under a prior agreement is hereby mutually agreed to be the sum of twelve hundred, twenty-seven and 82/100 dollars, which said indebtedness the second party hereby promises and agrees to pay during the term of this agreement, and payment of which is hereby so extended” (italics ours). Just below the signatures of the medical company and Marbach, and on the same page, is the following contract:-

“In consideration of one dollar in hand paid by the J. E. Watkins Medical Company, the receipt whereof is hereby acknowledged, and the execution of the foregoing agreement by said company, and the sale and delivery by it to the party of the second part of its medicines, extracts, and other articles, and the extension of the time of payment of the indebtedness due from him to said company as therein provided [italics ours], we, the undersigned sureties, do hereby jointly and severally promise and guarantee the full and complete payment of said indebtedness and for said medicines, extracts, and other articles, and the prepaid freight and express thereon, at the time and. place and in the manner in said agreement provided.

(Witnesses sign here.)

Signed by 1st surety in our presence:

W. M. Brinson, Millen, Ga.

L. E. Burke, Millen, Ga., B. E. D.

Signed by 2d surety in our presence:

D. W. Wiggins, Butts, B. 1.

Homer Burke, Millen, Ga.

(Sureties sign here, business men preferred.)

1st surety, A. D. Lawrence, Occupation, farmer.

P. 0., Butts, Ga.

2d surety, W. B. Babistch, Occupation, farmer.

P. 0. address, Millen, Ga.”

In Manry v. Waxelbaum Company, 108 Ga. 14 (33 S. E. 701), Mr. Justice Cobb said (p. 17) : “It is contended that the contract sued on in this case is one of suretyship and not of’guaranty. The two terms are frequently used interchangeably, and for this reason a great confusion has arisen in the books as to the proper distinction to be drawn between them. A guarantor is a surety in the sense that he obligates himself to pay the debt of another, but at the same time there is a very clear distinction between them. One difference is pointed out by our code. It says that a contract of suretyship ‘differs from a guaranty in this, that the consideration of the latter is a benefit flowing to the guarantor.’ ” In Wright v. Shorter, 56 Ga. 76, Judge Bleckley said: “Guarantors, viewed in reference to the consideration of their contract, are either mere sureties or more than sureties. They are mere sureties when the consideration of the guaranty moves, not to them but to the person for whose performance they become bound. They are more than sureties when the consideration is a benefit flowing to themselves.” In Small Co. v. Claxton, 1 Ga. App. 83 (57 S. E. 977), where the ' question was whether the contract sued upon was one of guaranty or suretyship,’ Chief Judge Hill said (p. 87): “We have little sympathy with artificial distinctions between principles of law which present no substantial difference as to matters of right and justice, which tend to confuse rather than to enlighten, and to furnish loopholes for technical escapes from contract obligations.” Section 3538 of the Civil Code of 1910 is as follows: “The contract of suretyship is that whereby one 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.”

It appears from the face of the contract signed by the alleged sureties in the instant case that the consideration to the sureties was “one dollar” and “the execution of the foregoing agreement [the contract signed by the medical company and Marbach] by said company, and the sale and delivery by it to the party of the second part of its medicines, extracts, and other articles, and the extension of the time of payment of the indebtedness due from him to said company as therein provided.” Under the code-section quoted above, and the rulings of the Supreme Court and of this court, one important distinction between a contract of guaranty and one of suretyship seems to be that in the former the benefits given under the contract must flow to the guarantors, and in the latter they must flow to the principal. This code-section and the court decisions bearing upon the subject must, however, be given a reasonable, and not an unreasonable, construction. Section 3540 of the Civil Code of 1910 declares that “the contract of surety-ship is one of strict law, and his liability will not be extended by implication or interpretation.” It is clear to us that the word, “benefit,” as used in section 3538, means some real and substantial, and not a mere nominal, benefit. On the face of the contract in the instant case, only an insignificant, nominal benefit, to wit, one dollar, flowed to the alleged sureties, while all of the real, important, and substantial benefits were given to the principal. Probably the most important of these benefits to the principal was the extension to him by the medical company of the time of payment of the debt, then due by him, amounting to over $1,200. The contract, when construed as a whole, clearly shows that the defendants who signed as sureties obligated themselves to pay the debt of their principal, Marbach, in consideration of the extension to him of the time of payment of this large debt, and of the other important benefits given him under the contract, and that these indulgences, granted to the principal, were the real consideration of their signing as sureties, and not the merely nominal, ineonsequential amount of fifty cents apiece, which the contract says they received. In our judgment there, must be some real, substantial benefit, in addition to that accruing to the principal, flowing to one who signs a contract to make him a guarantor instead ■ of a surety. It is possible that in a contract where no real, substantial benefit flowed to the principal, a merely nominal benefit flowing to one who signed as surety might be sufficient to make the latter a guarantor instead of a surety; but where, as- in this ease, substantial and important benefits are secured by the principal under the contract, it is inconceivable that the mere 'fact that a purely nominal benefit is in addition given to one signing himself as surety will change his status from that of a surety to that of a guarantor. In our judgment, however, while the distinction just discussed is an important one, the fundamental distinction between a contract of guaranty and one of suretyship is whether the persons signing as “sureties” or as “guarantors” are, under the terms of the contract, primarily liable for the promise of their principal, or only secondarily liable therefor. If they are primarily liable, they are sureties, and not guarantors. Under the terms of the contract in the case at bar, it seems to us that the defendants who signed the contract as sureties are clearly liable primarily for the undertakings of Marbach, their principal; and it follows that they are sureties and not guarantors.

In our opinion the court erred in holding the contract to be one of guaranty and in.sustaining the demurrer.

Judgment reversed.

Jenkins and Bloodworth, JJ., concur.