Houston General Insurance v. Brock Construction Co.

Undercofler, Presiding Justice,

concurring.

You can call a camel an elephant but that won’t make its hump disappear. Labels do not change substance. As noted by scholars, whether a contract is a suretyship or a guaranty is a distinction without a difference.

"Essentially, there is no difference between guaranty and suretyship. The difficulty is merely one of terminology, and all of the confusion may be rested there. When the creditor proceeds against the principal or the security, his position may be determined by reference to the ordinary principles of contracts.” Overton & Field, The Difference Between Guaranty and Suretyship in Georgia — An Effort in Futility — 2 Ga. Bar J., No. 2, 25 (1939). See also Green, The Distinction Between Guaranty and Suretyship in Georgia, 9 Ga. Bar J., 273 (1947); Radin, Guaranty and Suretyship, 17 Cal. L. R. 605 (1929).

The General Assembly would render a valuable service to the citizens, the lawyers, and the courts by abolishing the distinction between contracts of surety and guaranty. This was the recommendation of the American Law Institute as early as 1941. Restatement of the Law of Security. The Georgia Uniform Commercial Code provides, " 'Surety’ includes guarantors.” The Georgia Insurance Code provides that where bonds are required by law, surety insurance companies doing a surety insurance business may be released from their bonds on the same terms and conditions as are prescribed by law for the release of individuals. Code Ann. § 56-2435.

In my opinion the General Assembly should also abolish the rule of strictissimi juris which originated in medieval England and is entirely inappropriate under modem business practices.