Opinion
34617.
DECIDED MAY 16, 1953. REHEARING DENIED MAY 27, 1953.
Action on surety bond. Before Judge McClure. Dade Superior Court. August 9, 1952.
Wm. Gordon Mann, for plaintiffs in error.
Shaw Shaw, contra.
1. Where, as here, a surety gives notice in writing to the creditor, in compliance with Code § 103-205, to make the debt out of the principal, which notice states that the principal is a resident of a particular county of another state, but also states facts showing that he is within the jurisdiction of this State and where he may be served by process, and where the creditor fails to commence an action against the principal within three months thereafter, such notice, upon being established as true, is sufficient to discharge the sureties under the provisions of the statute.
2. Code § 103-205, referred to in the preceding headnote, is in the nature of a limitation of actions; accordingly it forms a part of the public policy of this State and cannot be the subject of specific anticipatory waiver in the instrument sued upon.
3. Where a principal and his sureties on a contract which is joint and several on its face are sued in the same action, and the verdict and judgment are taken against the sureties only, both the principal and the sureties are discharged.
DECIDED MAY 16, 1953 — REHEARING DENIED MAY 27, 1953.
J. R. Watkins Company filed suit in the Superior Court of Dade County against Flavious C. Beaty as principal and R. P. Fricks and J. A. Bobo as sureties, for a balance due under a contract by which the plaintiff agreed to furnish Beaty with certain articles for sale by the latter, to be paid for at wholesale prices and resold. Immediately above the signature of the defendant sureties on the contract, is a stipulation which reads in part as follows: "We, the undersigned sureties, do hereby waive notice of the acceptance of this agreement, notice of default or nonpayment, and waive action required, upon notice, by any statute, against the Purchaser; and we jointly, severally and unconditionally promise, agree and guarantee to pay said indebtedness, the amount of which is now written in said agreements."
The defendant Fricks filed an answer alleging that the agreement sued upon was without any benefit to him; that on July 6, 1951, he gave notice in compliance with the terms of Code § 103-205 to the plaintiff to collect from the principal, Beaty, the amounts alleged to be due; that the principal did not sue Beaty within three months of said notice, for which reason he is discharged from all liability under the contract. The defendant Bobo filed a similar answer, relying upon the notice given by Fricks, which reads in part as follows: "He [Beaty] is the one that owes it, and you proceed to collect it from him. I don't know whether he has got anything or not but anyway you can try to make him pay it. He lives in DeKalb County, Alabama, and his home post office is Ider, Ala., but you can get him in Dade County, Ga. He runs a barber shop in Trenton which is in Dade County, Ga. and that is his business address. The courthouse is there and he is in his barber shop every day except Sunday."
The trial court sustained demurrers and dismissed the answers of the defendant sureties, stating that they had, by specific waiver of action required upon notice against the purchaser, waived the defense that the plaintiff failed to commence an action against the principal on the contract within three months of such notice, and further that, since the letter showed on its face that Beaty was a nonresident of the State of Georgia, such notice would not relieve the sureties on the contract. The case then proceeded to trial, and judgment was entered against the defendants jointly. Error is assigned on the judgments sustaining the general demurrers of the sureties and striking their answers, as controlling the further progress of the case.
1. Code § 103-205 provides as follows: "Any surety, guarantor, or indorser, at any time after the debt on which he is liable becomes due, may give notice in writing to the creditor, his agent, or any person having possession or control of the obligation, to proceed to collect the same from the principal, or any one of the several principals liable therefor; and if the creditor or holder refuses or fails to commence an action for the space of three months after such notice (the principal being within the jurisdiction of this State), the indorser, guarantor, or surety giving the notice, as well as all subsequent indorsers and all co-sureties, shall be discharged. No notice shall be considered a compliance with the requirements of this section which does not state the county in which the principal resides." It is to be observed that the surety is required only to give the creditor (a) notice to proceed to collect the debt from the principal, and (b) to state the county in which the principal resides. Thereafter, if the principal is within the jurisdiction of the State, and if the creditor fails to commence an action within three months after such notice, the surety will be discharged. It appears from the record here that the principal was within the jurisdiction of the State, as personal service was had upon him. That his residence was in another State, and was so stated in the notice, would not, under the terms of the Code section or the statutes from which it is condensed preclude the sureties from the benefit thereof, the principal being in fact within the jurisdiction of the court. It was error to sustain the general demurrer to the answer on this ground.
2. The language of the contract quoted in the statement of facts, supra, is sufficient to waive the notice to proceed against a principal, set up in the answer of the defendants, provided the statute authorizing this notice is one which can under the public policy of this State be waived. Counsel for the plaintiff contends that Code § 102-106 applies. The provisions of this section are as follows: "Laws made for the preservation of public order or good morals cannot be done away with or abrogated by any agreement; but a person may waive or renounce what the law has established in his favor, when he does not thereby injure others or affect the public interest." It is contended by counsel for the plaintiff that this statute enunciates a law established in favor of sureties such as the defendants herein, and that therefore, under the provisions of Code § 102-106, the same may be waived. Whether or not Code § 103-205 providing for the notice may be the subject of specific anticipatory waiver on the part of a surety to a contract, has not been decided in this State. In Watkins Co. v. Seawright, 41 Ga. App. 617 ( 154 S.E. 293), and in Overstreet v. W. T. Rawleigh Co., 75 Ga. App. 483 ( 43 S.E.2d 774), it was held that the language in the contracts there considered was not such as to constitute a waiver, but neither of those cases passed on the question of whether or not language in a contract sufficiently explicit, such as we have here, would so operate.
It is well settled that the statute (Code § 103-205) is in the nature of a limitation of actions. Sally v. Bank of Union, 150 Ga. 281 (1) ( 103 S.E. 460); Overstreet v. W. T. Rawleigh Co., supra; Levy v. Cohen, 4 Ga. 1. In the Sally case, in answer to a question certified by the Court of Appeals, as follows: "Do the provisions of section 3546 ( § 103-205) of the Civil Code affect the contract or go only to the remedy?" the Supreme Court held as follows (p. 281): "The provisions of section 3546 of the Civil Code do not affect either the nature, obligation, construction, or validity of the contract, but go only to the remedy. See Vanzant v. Arnold, 31 Ga. 210 (4), 213, where this view was expressed in the opinion, but where the decision of the question was not necessary to the disposition of the case. `The indorser derives his right to be released from the statute', and not from anything contained in the contract." As is pointed out in Traders Investment Co. v. Macon Ry. c. Co., 3 Ga. App. 125 ( 59 S.E. 454), a case involving a waiver of exemption of wages from garnishment, the question as to whether a laborer could, by executory or prospective agreement in a promissory note or contract, make such waiver is one of the public policy of the State. In Bank of Jonesboro v. Carnes, 187 Ga. 795, 798 ( 2 S.E.2d 495, 130 A.L.R. 1) the following is held: "Statutes of limitation are considered as beneficial and resting on principles of a sound public policy, and as not to be evaded except by the methods provided therein; indeed, they are now termed statutes of repose, and are regarded as essential to the security of all men. . . They are intended not alone for the benefit of the party in whose favor they have run, but are also for the general public good." The Traders Investment Co. case, supra, in holding that a prospective waiver of garnishment exemption was unenforceable as against public policy relied in part upon the case of Moxley v. Ragan, 10 Bush 156 (19 Am. R. 61), a decision indicating that, while the right to plead the statute of limitations is a personal privilege, an agreement never to plead it would not be binding. The same decision was reached in Miller v. Roberts, 9 Ga. App. 511 (3) ( 71 S.E. 927), holding that the right to notice in order to obtain attorney fees on a note is a matter of public policy, and an anticipatory waiver thereof incorporated in the instrument sued on is unenforceable; and it was there pointed out that such waivers, if valid, would in time become incorporated in the printed provisions of all promissory notes, which would have the effect of annulling the provisions of the statute in their entirety.
The public policy of each state must rest upon its own constitution, laws, and interpretations of its laws by the courts of that state. The public policy of the several states may differ as among themselves, and may also differ within the law of the state itself as the lapse of time and change of habits changes the thinking of the people. For this reason, Com. ex rel. Department of Justice v. National Surety Co., 310 Pa. 108 ( 164 A. 788, 89 A.L.R. 564), and other cases from foreign jurisdictions cited by the defendant in error are not compelling authority contrary to the view here expressed. As has been previously pointed out, the statute here sought to be enforced is in the nature of a statute of limitations. The courts of this State have not held definitely whether a prospective waiver of such statute in the instrument upon which suit is brought would be valid, but it is strongly intimated in the cases above cited that such waiver should not be effective. It is our opinion that the statute of limitations and statutes, in the nature of a limitation of actions cannot, under the public policy of this State, be waived in advance.
3. Code § 103-102 provides: "The obligation of the surety is accessory to that of his principal, and if the latter from any cause becomes extinct, the former shall cease of course, even though it is in judgment." It appears from the record here that the petition was filed against Flavious C. Beaty and R. P. Fricks and J. A. Bobo as principal and sureties respectively; that personal service was had upon Beaty on June 28, 1952; that he interposed no defense; that on March 17, 1953, verdict and judgment were entered against the sureties alone, as follows: "We the jury find in favor of plaintiff J. R. Watkins Co. and against defendants R. P. Fricks and J. A. Bobo the sum of $1,206.28 principal and $186.46 interest to this date"; "Whereupon, it is ordered and adjudged that the plaintiff, the J. R. Watkins Company, have and recover of the defendants R. P. Fricks and J. A. Bobo $1,206.28 principal, $186.46 interest to date, future interest at 7% per annum, and $ _____ costs for use of officers of court." It thus appears that, although the principal was a party to the action, no judgment was rendered against him. As was stated in Fricks v. Rome Mercantile Co., 49 Ga. App. 431 ( 175 S.E. 807): "Where the principal and his surety on a promissory note, which is joint and several on its face, are sued in the same action, and verdict and judgment are taken against the surety only, both the principal and the surety are discharged." The judgment is therefore contrary to law for this additional reason, since the verdict against the sureties alone had the legal effect of discharging them from any obligation they might otherwise have had.
Judgment reversed. Gardner, P. J., and Carlisle, J., concur.