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Lawskills.com Georgia Caselaw
HAZEL v. THARPE & BROOKS, INC.
BENSON et al. v. THARPE & BROOKS, INC.
62205.
62206.
BANKE, Judge.
Action on note. DeKalb Superior Court. Before Judge Henley.
The defendants appeal a summary judgment entered in favor of the plaintiff in a suit to enforce their obligation as sureties on a promissory note. Held:
1. The trial court did not err in concluding that the plaintiff had standing to bring the suit, although the note was made payable to a corporation other than the plaintiff and the defendants allege that it was not properly endorsed by that corporation upon its transfer to the plaintiff. The plaintiff established without dispute that it had obtained possession of the note by purchasing it for value from the named payee. Because this fact is undisputed, it is clear that even if, arguendo, the plaintiff failed to obtain a proper endorsement, it nevertheless acquired title to the instrument and is entitled to sue to collect it. See Code Ann. 109A-3--201 (1) (UCC 3-201 (1)); First Nat. Bank v. Barrett, 141 Ga. App. 161, 162 (233 SE2d 24) (1971); Blanton v. Blanton, 154 Ga. App. 646, 647 (269 SE2d 505) (1980).
2. The "guaranty of payment" signed by the defendants and upon which their liability is predicated did not run in favor of a particular creditor but in favor of the "holder" of the note. Therefore, transfer of the principal obligation also operated as an assignment of the defendants' obligation. Accord 38 AmJur2d Guaranty 36, p. 1034. Compare Hurst v. Stith Equipment Co., 133 Ga. App. 374 (3) (210 SE2d 851) (1974).
3. The language of the "guaranty of payment" unconditionally obligated the defendants to pay the indebtedness and expressly subjected them to suit by the holder "with or without first or contemporaneously suing . . . other persons, or otherwise seeking or proceeding to collect from them." Thus, the trial court did not err in finding that the agreement created an unconditional suretyship rather than, as argued by defendants, a conditional guaranty. See generally Code Ann. 109A-3--416 (1) (UCC 3-416 (1)); Broun v. Bank of Early, 243 Ga. 319 (253 SE2d 755) (1979).
Randall L. Hughes, Albert Sidney Johnson, John L. Blandford, Samuel Appel, for Tharpe & Brooks, Inc.
Albert Sidney Johnson, Thomas E. Jones, Jr., Benning M. Grice, Jr., for appellants (case no. 62206).
Samuel Appel, for appellant (case no. 62205).
DECIDED JULY 16, 1981 -- REHEARING DENIED JULY 29, 1981 IN CASE NO. 62206.
Thursday May 21 22:32 EDT


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