10-7-4. Form of contract immaterial.

Orig. Code 1863, § 2128; Code 1868, § 2123; Code 1873, § 2151; Code 1882, § 2151; Civil Code 1895, § 2969; Civil Code 1910, § 3541; Code 1933, § 103-104.

In Massell v. Prudential Ins. Co. of America, 57 Ga. App. 460, 196 S.E. 115 (1938), it was held that this section, under which an accommodation endorser was considered merely a surety, must yield to the former Negotiable Instruments Law, Ga. L. 1924, p. 126, which has in turn been superseded by the commercial paper provisions of the Uniform Commercial Code, O.C.G.A. §§ 11-3-101 through 11-3-805. The UCC provides that a signature in an ambiguous capacity is an endorsement (O.C.G.A. § 11-3-402); that an accommodation party is liable in the capacity in which he has signed, even though the taker knows of the accommodation, where the instrument has been taken for value before it is due (O.C.G.A. § 11-3-415(2)); that oral proof of the accommodation is not admissible against a holder in due course who has no notice of the accommodation to give the accommodation party the benefit of discharges dependent on his character as such, but in other cases is admissible (§ 11-3-415(3)); and that an accommodation party paying the instrument has a right of recourse against the accommodated party (§ 11-3-415(5)), and spells out the liability of makers, drawers, acceptors, endorsers, and guarantors (O.C.G.A. §§ 11-3-413, 11-3-414, and 11-3-416) and how the liability of parties to commercial paper is discharged (§§ 11-3-601 through 11-3-606). Many cases involving negotiable instruments were decided under this section before the UCC became effective. See, for example, Freeman v. Cherry, 46 Ga. 14 (1872); Camp v. Simmons, 62 Ga. 73 (1878), later appeals, 64 Ga. 726, 65 Ga. 674 (1880), 71 Ga. 54 (1883); Patillo v. Mayer & Glauber, 70 Ga. 715 (1883); Hall v. Capital Bank, 71 Ga. 715 (1883); Parmelee v. Williams, 72 Ga. 42 (1883); Hull v. Myers, 90 Ga. 674, 16 S.E. 653 (1893); Baggs v. Funderburke, 11 Ga. App. 173, 74 S.E. 937 (1912); Bank of LaFayette v. Wardlaw, 20 Ga. App. 741, 93 S.E. 236 (1917); Washington Loan & Banking Co. v. Holliday, 26 Ga. App. 792, 107 S.E. 370, cert. denied, 26 Ga. App. 801 (1921); Taff v. Larey, 29 Ga. App. 631, 116 S.E. 866 (1923); McKibben v. Fourth Nat’l Bank, 32 Ga. App. 222, 122 S.E. 891 (1924); Smith v. Moore, 45 Ga. App. 708, 165 S.E. 765 (1932); Hamby v. Crisp, 48 Ga. App. 418, 172 S.E. 842 (1934).

For article, “Enforcing Commercial Real Estate Loan Guaranties,” see 15 (No. 2) Ga. St. B. J. 12 (2009).