Fabian v. Dykes , 214 Ga. App. 792 ( 1994 )

Birdsong, Presiding Judge.

Bobby J. Fabian appeals a judgment n.o.v., following a jury ve diet in his favor. See Fabian v. Dykes, 210 Ga. App. 703 (436 SES 819). The case arises out of a note for $75,194.40 which Fabian ar his partner, William Woodall, executed to Coastal Bank of Hinesvil in September 1982, for a loan made to a corporation, “Fabian ar Woodall, Inc.” The note was signed by Bobby Fabian and Willia Woodall. Carl R. Dykes (now deceased) executed a personal guara tee. In November 1982, all assets of Fabian and Woodall, Inc., were transferred to William Woodall, and a document of that date on Coastal Bank stationery provides: “Be it . . . further resolved that Bobby Fabian has relinquished all interest in [Fabian and Woodall, nc.] and has no obligations. It is understood that William L. Woodall vill be responsible for all indebtedness. . . . These above terms have jeen agreed upon by all three parties signing below.” The “three par-ies signing below” were Fabian, Woodall, and a Coastal Bank vice president.

In 1985, the note was in default and Dykes paid the amount of lefault, $39,592.03. Dykes filed this suit to collect that money from i'abian. Fabian contends, and the jury found, that in November 1982, he bank fully released him from any liability on the note. Following he appeal reported at 210 Ga. App. 703, supra, the trial court entered udgment for Fabian and then granted judgment n.o.v. to Dykes, ¡’abian contends that as he was not liable to the bank on the note, iny payment by Dykes was not made on his behalf and was volun-ary. Held:

The grant of judgment n.o.v. is proper. OCGA § 10-7-41 pro-ides: “Payment by a surety or endorser of a debt past due shall enti-le him to proceed immediately against his principal for the sum paid, iith interest thereon, and all legal costs to which he may have been ubjected by the default of his principal.” Even a voluntary payment ly the guarantor entitles him to proceed against the principal. Shatles v. Baker, 18 Ga. App. 300 (89 SE 373). The trial court held that )ykes has an “independent equitable right to collect from his principal [Fabian].” However, the Dykes’ right to collect from Fabian is an dependent legal right under the statute.

Dykes was not a party to the bank’s release of Fabian. Fabian’s tatutory liability to the guarantor under OCGA § 10-7-41 was fixed dien Dykes guaranteed the note, and it was not removed by Fabian’s elease from the creditor to which Dykes was not a party. Although 'abian was not liable to the bank he was still liable to the guarantor, I: the guarantor was still liable on the note. Dykes’ payment, if not Fabian’s behalf, was on behalf of the guarantee Dykes had signed Fabian’s behalf. To say Fabian was released from his statutory ob-ation to pay the guarantor because he had removed himself as prinal obligor would allow Fabian to induce Dykes to guarantee a loan, jeive the benefits of the loan and then secure his own release from e debt, thereby ensuring that the guarantor will have to pay it. bian benefited from the loan, he benefited from Dykes’ agreement stand for the debt, and he benefited from being released from the bt. Moreover, Fabian’s release was a direct detriment to Dykes; ice Fabian was relieved of a debt to the bank, Dykes had to pay it. ) reason appears to release Fabian from his statutory obligation to the guarantor, Dykes.

Decided August 22, 1994 Reconsideration denied October 6, 1994. Barrow, Sims, Morrow & Lee, R. Stephen Sims, for appellant. Jones, Osteen, Jones & Arnold, G. Brinson Williams, Jr., for a pellee.

Fabian suggests the equities are altered because Dykes was a director of the bank, but this does not prove Dykes knew about tht release or that he intended to release Fabian from Fabian’s statutorj liability to him. Dykes’ guarantee was as an individual, not as representative of the bank. Nor does the fact that Dykes received $5,000 t( guarantee the loan change the equities or the law. This was considera tion to guarantee the loan; it is not consideration to release Fabiai from his liability to the guarantor.

The trial court’s judgment was correct.

Judgment affirmed.

Blackburn, J., and Senior Appellate Judgi Harold R. Banke concur.

On Motion for Reconsideration.

Fabian contends that under OCGA § 10-7-56 (“A surety who ha paid the debt of his principal shall be subrogated ... to all the right of the creditor”), when the bank released him it retained no right oi which Dykes can sue. This converse inference is not authorized by th statute. Moreover, subrogation by which a guarantor (see OCGi § 10-7-1) takes rights of the creditor is not the same thing as a guar antor’s right to recoup payment of a debt from his principal unde § 10-7-41. See Erwin v. Brooke, 159 Ga. 683, 685 (126 SE 777 Fabian contends his release was an impairment of risk which release the guarantor, under OCGA §§ 11-3-606 (1) (a) and 10-7-22; however those statutes address liability of a guarantor to a creditor, not th liability of a debtor to his guarantor. Further, citing Hiers v. Exun 158 Ga. 19, 30 (122 SE 784), Fabian contends subrogation is neve enforced in favor of a volunteer. This is not a subrogation claim, an Hiers is distinguished on its facts. The debt was in default, Dykes we not a party to the release, and the bank accepted payment from hin

The issue on appeal is solely that of recoupment of a debt whic a guarantor paid without evidence of wrongdoing. OCGA § 10-7-4 gives him the right of recoupment as a matter of law without limits tion and no evidence is cited to us which would authorize a contrai verdict. See Frye v. Sims, 144 Ga. 74 (3), (4) (86 SE 249).

Motion for reconsideration denied.