HAYNIE v. FIRST NAT. BANK OF ATLANTA

This is the second appearance of this case in this court. See Haynie v. First Nat. Bank of Atlanta, 115 Ga. App. 499 ( 155 S.E.2d 32). However, the issues involved on this appeal are different.

After the remittitur in the former appeal was made the judgment of the trial court the bank moved for a summary judgment. Mr. Haynie submitted affidavits in opposition for the purpose of showing that he had terminated his status as a guarantor prior to the time the obligation sued on was incurred. It appeared from his affidavits that on August 2, 1965, he resigned his office and position with E. H. Overcash Associates, Inc., and on that date the corporation directed a letter to the bank informing it that he had terminated his connection and requested that the bank void his signature authorization "as being authorized to sign on our account," as of that date. In his own affidavit he asserted that on a later date while he was on the conduct of other business at the Decatur branch office of the bank he was informed by one of its officers that the bank had received the letter from the corporation and that the officer asserted that it was sufficient to constitute notice of revocation of his guaranty agreement with the bank.

The question before us is whether under Mr. Haynie's counter showing a genuine issue of fact was raised, making the grant of a summary judgment in favor of the bank error.

EBERHARDT, Judge.

1. In resolving this question we must consider whether the contract of guaranty was entire or severable. If it was entire, as will be seen from the discussion that follows, there could be no revocation. If it was severable and revocable we must then determine whether, under the counter showing, a revocation was effected.

There is an entire consideration only when all of it passes at the time of the execution of the contract, but when the guaranty is to apply not only to indebtednesses already incurred, but as well to future obligations, as was the case here, it is divisible and separable. Code § 20-112. Cf. Broxton v. Nelson, 103 Ga. 327 ( 30 S.E. 38, 68 ASR 97); Hunnicutt Bellingrath Co. v. Van Hoose, 111 Ga. 518 ( 36 S.E. 669); Burns v. Mitchell, 55 Ga. App. 862 ( 191 S.E. 870).

Guaranties are of two kinds: First, where the entire consideration from the creditor passed at the time of the signing of the contract: second, where the consideration passes at different times, and is therefore divisible or separable. Bennett v. Checotah State Bank of Checotah, 176 Okla. 518 ( 56 P.2d 848). Thus, where, as here, the guaranty is to cover not only obligations already incurred, but, as well, obligations "hereafter coming into existence," it is a divisible or separable contract.

2. Where the guaranty is for an entire consideration it is not revocable; aliter if separable or divisible. American Oil Co. v. Wigley, 251 Miss. 275 ( 169 So.2d 454); Danby v. Osteopathic Hospital Assn. of Delaware, 34 Del. Ch. 172, 427 ( 101 A.2d 308, 104 A.2d 903); Commonwealth Trust Savings Bank v. Hart, 268 Ill. App. 322; American Chain Co. v. Arrow Grip Mfg. Co., 235 NYS 228 ( 134 Misc. 321). Cf. Rawleigh Medical Co. v. Burney, 22 Ga. App. 492 (3) ( 96 S.E. 578); Sulter v. Citizens Bank c. Co., 51 Ga. App. 798 ( 181 S.E. 694).

3. At common law a contract of guaranty, though in writing itself, could be revoked or terminated by parol, but where the instrument provides otherwise a revocation or termination must be in accordance with its terms. Meadow Brook National Bank v. Feraca, 224 NYS2d 846. In accord with this principle it was held that a notice to the creditor that an individual guarantor had severed his connections with the corporation whose obligations were the subject matter of the guaranty did not serve as a notice of revocation of his guaranty, since the guaranty was not conditioned upon his status as an officer or stockholder of the corporation. Manufacturers' Finance Co. v. Rockwell, 278 Mass. 502 ( 180 N.E. 224). And where the president and the treasurer of a corporation guaranteed its obligations, a notice from the president asking a return of the guaranty with the request that the creditor "please do not ship any merchandise on our guaranty, hereafter," did not relieve the treasurer of his continuing obligation as a guarantor. James Talcott, Inc. v. Levy, 123 Pa. S. 94 (186 A 251).

The notice of revocation or termination must be clearly expressed, unqualified, positive and absolute. Associated Food Stores, Inc. v. Siegel, 205 NYS2d 208; Rogers-Pyatt Shellac Co. v. Starr Piano Co., 209 NYS 727, 733. If the notice is given by one of several guarantors, in full compliance with the requirements of the contract, it is effective only as to him, and can not affect the liability of the others. Klatte v. Franklin State Bank, 211 Wis. 613 ( 248 N.W. 158, 249 N.W. 72); D. N. E. Walter Co. v. Domelen (Ore.) 425 P.2d 166.

The contract now before us provides that it "is a continuing agreement and shall remain in force until a written notice revoking it has been received by the bank; but such revocation shall not release the undersigned from liability for any and all obligations of the principal then in existence, or from any renewals or extensions thereof, in whole or in part, and whether such renewals are made before or after such revocation."

The contract provides that it is a joint and several obligation, and this provision is sufficient to permit any of the several guarantors to terminate his obligation in futuro by the giving of a specific written notice that he is doing so. All guarantors having signed, each is bound by this as well as other terms and provisions of the contract. D. N. E. Walter Co. v. Domelen, 425 P.2d 166, supra.

There was no written notice from Haynie to the bank of his termination or revocation of the guaranty; only a notice from the corporation that he had terminated his connection with it and that his authority to sign for the corporation had terminated. Thus, he could no longer sign checks drawn on its account, nor could he sign notes as a corporate officer to bind the corporation; but nothing terminated his right to sign for himself as guarantor of the corporate obligations, his status as a guarantor or his continuing liability under the contract. It appears that Manufacturer's Finance Co. v. Rockwell, 278 Mass. 502, supra, is on all fours with this situation, and an even stronger case is James Talcott, Inc. v. Levy, supra. This notice was certainly not in compliance with the guaranty contract.

Nor is the bank estopped by a statement claimed to have been made by one of its officers to Haynie that the notice was sufficient. In his affidavit Haynie asserts that "while on the conduct of other business at the Decatur Branch office of the plaintiff I was advised by W. Warren Woolsey, its senior officer, that the letter was sufficient to constitute written notice of revocation as to me of the guaranty agreement. . ." This negates the requirement that in order to bind a corporation by acts of or notice to its officer or agent it must appear that it be done "while the officer or agent was acting for it in connection with its business, and within the scope of his agency." Ga. Power Co. v. Kinard, 47 Ga. App. 483, 487 ( 170 S.E. 688); Employers' Fire Ins. Co. v. Penna. Millers Mut. Ins. Co., 116 Ga. App. 433, 437 ( 157 S.E.2d 807). Moreover, the statement alleged to have been made by Woolsey was nothing more than an opinion as to the legal effect of the notice that Haynie had terminated his connection with the corporation, by which the bank could not be bound, and upon which Haynie could not rely. Webb v. Jones, 221 Ga. 754 (3) ( 146 S.E.2d 910). This evidence, being inadmissible, had no probative value and the court was not authorized to consider it. Wells v. Metropolitan Life Ins. Co., 107 Ga. App. 826, 834 ( 131 S.E.2d 634); Benefield v. Malone, 112 Ga. App. 408 (2) ( 145 S.E.2d 732).

Thus, since we conclude that there was no effective revocation of the guaranty by Mr. Haynie, entry of the summary judgment was proper.

Judgment affirmed. Whitman, J., concurs. Felton, C. J., concurs specially.