10-6B-81 (2019)
Application of Chapter 6B
(a) Code Section 10-6B-19 shall apply retroactively to powers of attorney created before July 1, 2018. The remainder of this chapter shall not apply to a power of attorney executed before July 1, 2017.
(b) When Code Section 10-6B-3 applies to a power of attorney, Chapter 6 of this title shall not apply to such power of attorney.
(c) When, other than Code Section 10-6B-19, this chapter does not apply to a power of attorney:
(1) It shall not affect the application of Chapter 6 of this title; and
(2) The former provisions of Article 7 of Chapter 6 of this title, as such existed on June 30, 2017, shall remain applicable.
History
Code 1981, § 10-6B-81, enacted by Ga.
L. 2017, p. 435, § 2-1/HB 221; Ga. L. 2018, p. 520, § 21/HB 897.
CHAPTER 7 SURETYSHIP Article 1
Article 3
Contract of Suretyship
Rights of Surety Against Principal, Cosureties, and Third Persons
Sec.
Contract of suretyship or guaranty defined; liability of surety generally. Nature of obligation of surety. Suretyship not extended by implication. Form of contract immaterial.
Relative Rights of Creditor and Surety
Article 2
Sec.
Effect of release of or compounding with surety. Novation; effect. Discharge of surety by increase of risk. Refusal to deliver evidence of debt and securities on tender of amount of debt as discharging surety. Refusal to sue principal after notice by surety as discharge. Extending liability. Promise to pay in ignorance of discharge. Provisions of Uniform Commercial Code to control. Process sued out and judgment entered against surety as such. Judgment against principal and surety at same time. Bad faith refusal of corporate surety to perform suretyship contract. Rights of certain parties claiming protection under a payment bond or security deposit; notice of commencement of work.
Attachment against principal. Right of surety or endorser to recover amount paid, interest, and costs. Effect of judgment against surety. Recovery of usury paid by surety. Foreclosure of mortgage or enforcement of security given by principal. Proof of suretyship by parol. Proof of suretyship after judgment. Control of execution and judgment by surety; subrogation to plaintiff’s rights. Control of execution and judgment by surety when sued separately. Payment pending action; judgment for plaintiff for use of surety. Compelling contribution from cosureties after paying more than equal share; effect of cosurety’s insolvency. Interest on sum recovered as contribution. Duty to account for indemnification from principal; compelling transfer of security from principal. Controlling action on debt and judgments therein against cosureties. Endorser’s right to control judgment on debt and execution thereon. Protection of bona fide purchasers when surety controls judgment. Subrogation to rights of creditor; priority of claim.
Sec.
Substitution in place of creditor as to securities held by creditor.
Annotations
Cross references. Powers of banks to act as sureties and guarantors, § 7-1-290. Sureties on bonds, § 17-6-30 et seq. Law reviews. For article analyzing problems and
obligations of parties in personal suretyship, see 5 Mercer L. Rev. 289 (1954). For article discussing Georgia commercial law in 1976 to 1977, see 29 Mercer L. Rev. 41 (1977).
JUDICIAL DECISIONS Compensated sureties. - Prior to 1981, this chapter was not intended to govern compensated sureties, which meant that the surety law for compensated sureties had to be found in the common law of this state. Houston Gen. Ins. Co. v. Brock Constr. Co., 241 Ga. 460, 246 S.E.2d 316, 1978 Ga. LEXIS 1021 (1978) (excluding § 10-7-30, enacted in 1973, from holding and holding § 10-7-22 states common law applicable to compensated sureties). Corporations writing surety bonds for profit. - Compensated corporate sureties engaged in writing surety bonds for a profit were, prior to 1981, not such sureties within the meaning of this chapter as to generally enjoy the protection afforded by all of its sections. Brock Constr. Co. v. Houston Gen. Ins. Co., 144 Ga. App. 860, 243 S.E.2d 83, 1978
Ga. App. LEXIS 1824, aff’d, 241 Ga. 460, 246 S.E.2d 316, 1978 Ga. LEXIS 1021 (1978). Uncompensated sureties. - Persons who guaranteed payment of a note solely as an accommodation to another and not for any profit flowing to themselves were uncompensated sureties entitled as members of a favored class to the protections of this chapter. Upshaw v. First State Bank, 244 Ga. 433, 260 S.E.2d 483, 1979 Ga. LEXIS 1271 (1979). In 1981, distinction between sureties and guarantors was abolished. - Georgia L. 1981, p. 870 amends O.C.G.A. § 10-7-1 so as to abolish the distinction between sureties and guarantors. Balboa Ins. Co. v. A.J. Kellos Constr. Co., 247 Ga. 393, 276 S.E.2d 599, 1981 Ga. LEXIS 727 (1981).
RESEARCH REFERENCES Am. Jur. Trials. Handling Fidelity Bond Claims, 47 Am. Jur. Trials 411.
ARTICLE 1 CONTRACT OF SURETYSHIP Law reviews. For article, “Enforcing Commercial Real Estate Loan Guaranties,” see 15 (No. 2) Ga. St. B. J. 12 (2009). For comment, “Eleventh Circuit Survey: January 1, 2013 - December 31,
2013: Comment: Confirming the Enforceability of the Guaranty Agreement After Non-Judicial Foreclosure in Georgia,” see 65 Mercer L. Rev. 1167 (2014).
RESEARCH REFERENCES ALR. Right of surety to avoid contract for fraud on principal, 3 A.L.R. 868. Failure to pay premium on indemnity bond as terminating same, 45 A.L.R. 617. Misrepresentations by principal obligor to surety or guarantor as affecting obligee, 71 A.L.R. 1278. Right of sureties on bond to take advantage of noncompliance with statutory requirement as to approval of bond, 77 A.L.R. 1479. Liability of surety company as distinguished from that of gratuitous surety, 94 A.L.R. 876. Liability of surety on appeal or supersedeas bond as affected by death of principal before decision on appeal, 94 A.L.R. 971.
Liability of sureties on official bonds for profits realized by principal from use or investment of public funds, 104 A.L.R. 1402. Liability of sureties as affected by actual, constructive, or asserted transfer of property or funds by fiduciary acting in one capacity to himself acting in another capacity, 111 A.L.R. 267. Rights and liabilities of parties to bond given as condition of issuance of new corporation stock certificate, investment trust certificate, or other security in place of one lost or stolen, 112 A.L.R. 900. Equality among claimants under indemnity or surety bond which is insufficient to pay all claimants in full, 128 A.L.R. 1096.