O.C.G.A.
O.C.G.A.

O.C.G.A. § 11-3-415 (2019)

Obligation of indorser

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)
Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.
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(a) Subject to subsections (b), (c), (d), and (e) of this Code section and to subsection (d) of Code Section 11-3-419, if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument (i) according to the terms of the instrument at the time it was indorsed; or (ii) if the indorser indorsed an incomplete instrument, according to the instrument’s terms when completed to the extent stated in Code Sections 11-3-115 and 11-3-407. The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subsequent indorser who paid the instrument under this Code section. (b) If an indorsement states that it is made “without recourse” or otherwise disclaims liability of the indorser, the indorser is not liable under subsection (a) of this Code section to pay the instrument. (c) If notice of dishonor of an instrument is required by Code Section 11-3-503 and notice of dishonor complying with that Code section is not given to an indorser, the liability of the indorser under subsection (a) of this Code section is discharged. (d) If a draft is accepted by a bank after an indorsement is made, the liability of the indorser under subsection (a) of this Code section is discharged. (e) If an indorser of a check is liable under subsection (a) of this Code section and the check is not presented for payment, or given to a depositary bank for collection within 30 days after the day the indorsement was made, the liability of the indorser under subsection (a) of this Code section is discharged.

History

Code 1981, § 11-3-415, enacted by Ga. L. 1996, p. 1306, § 3; Ga. L. 1997, p. 143, § 11.

Annotations

Cross references. Endorser’s right to control judgment and execution against principal and prior endorsers, § 10-7-54. Allowance of setoff against original payee in action by holder or transferee of

negotiable instrument received under dishonor, § 13-7-7. Law reviews. For note, “The Law of Evidence in the Uniform Commercial Code,” see 1 Ga. L. Rev. 44 (1966). For article discussing parol evidence in the law of commercial paper, see 13 Ga. L. Rev. 53 (1978).

JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, deci-

sions under former Code 1933, §§ 14-604, 14-605, 14-607, and 109A-3-414 are in-

cluded in the annotations for this Code section. To establish prima facie that one is not an endorser one must clearly indicate by appropriate words an intention to be bound in some other capacity than that of endorser. Hopkins Auto. Equip. Co. v. Lyon, 59 Ga. App. 468, 1 S.E.2d 460, 1939 Ga. App. LEXIS 327 (1939) (decided under former Code 1933, § 14-605). Obligation of endorser is that the endorser will pay if certain preliminary proceedings are taken. It must follow conversely that otherwise one is discharged from liability. This liability is the same as that of a technical or general endorser. McCarroll v. First Inv. Co., 109 Ga. App. 748, 137 S.E.2d 319, 1964 Ga. App. LEXIS 981 (1964) (decided under former Code 1933, § 14-604). Words “every endorser,” include every person classed as endorser, unless the person’s endorsement is properly qualified. Massell v. Prudential Ins. Co. of Am., 57 Ga. App. 460, 196 S.E. 115, 1938 Ga. App. LEXIS 313 (1938) (decided under former Code 1933, § 14-607). Endorser entitled to have note presented for payment and to notice of nonpayment. - According to rules of

common law, endorser of promissory note is entitled to have same duly presented for payment and to be notified of failure or refusal to pay; and failure of holder to present note for payment or to give notice of nonpayment discharges endorser from liability. Massell v. Prudential Ins. Co. of Am., 57 Ga. App. 460, 196 S.E. 115, 1938 Ga. App. LEXIS 313 (1938) (decided under former Code 1933, § 14-607). When endorser’s liability becomes absolute or is discharged. - Liability of every endorser is contingent until note matures; when conditions of endorser’s warranty have been met, liability becomes absolute; when requirements as to presentment and notice of dishonor have not been complied with, endorser is discharged. Massell v. Prudential Ins. Co. of Am., 57 Ga. App. 460, 196 S.E. 115, 1938 Ga. App. LEXIS 313 (1938) (decided under former Code 1933, § 14-607). Principal and surety on note are jointly and severally liable, and one need not sue them jointly. Hurt v. Citizens Trust Co., 128 Ga. App. 224, 196 S.E.2d 349, 1973 Ga. App. LEXIS 1443 (1973) (decided under former Code 1933, § 109A3-414).

RESEARCH REFERENCES Am. Jur. 2d. 11 Am. Jur. 2d, Bills and Notes, §§ 207, 218 et seq., 233, 459 et seq., 470 et seq. 12 Am. Jur. 2d, Bills and Notes, §§ 515, 647, 648, 671 et seq. C.J.S. 10 C.J.S., Bills and Notes, § 160 et seq. U.L.A. Uniform Commercial Code (U.L.A.) § 3415. ALR. Undertaking of one who endorses a note without recourse, 2 A.L.R. 216; 91 A.L.R. 399. Necessity of protest and notice as between coendorsers of negotiable paper, 32 A.L.R. 190. Endorsement of bill or note in form of guaranty of payment, 33 A.L.R. 97; 46 A.L.R. 1516. Seller’s rights in respect of the property,

or its proceeds, upon dishonor of draft or check for purchase price, on a cash sale, 54 A.L.R. 526. Words, “credit the drawer,” on note, as affecting liability of one who signs before delivery, 56 A.L.R. 232. Necessity of express agreement between endorsers to be jointly and not successively liable in order to give a right of contribution as between themselves, 90 A.L.R. 305. Rights, liabilities, and remedies of endorsers and endorsees in respect of stipulation in paper for attorneys’ fees or costs of collection, 117 A.L.R. 1236. Necessity of notice of nonpayment of note or bill upon which corporation is primary obligor, in order to hold officer, director, or stockholder as indorser, 123 A.L.R. 1367. Necessity, in order to overcome pre-

sumption of consideration where one signed note as additional maker or as endorser after its delivery by maker to payee, of evidence negativing promise of by maker to payee at or before delivery that it would be so signed or endorsed by the former, 124 A.L.R. 717.

Liability of intermediate endorser where negotiable instrument is reacquired and renegotiated by prior party, 169 A.L.R. 1410.

Notes of Decisions
Cited in 10 cases, 1986–2009 · leading case: Tidwell v. Amsouth Bank, N.A. (In Re Cavalier Homes of Georgia), 102 B.R. 878 (Bankr. M.D. Ga. 1989).
Sort: Relevance Newest Treatment
Tidwell v. Amsouth Bank, N.A. (In Re Cavalier Homes of Georgia), 102 B.R. 878 (Bankr. M.D. Ga. 1989). · cites it 8× “O.C.G.A. § 11-3-415(5) (1982). Individual Defendants claim that Plaintiff is not entitled to subrogation because part of their debt to AmSouth Bank is still outstanding.”
Bank South v. Jones, 364 S.E.2d 281 (Ga. Ct. App. 1987). · cites it 8× “" To determine if Jones was an accommodation maker we turn to OCGA § 11-3-415 (1), which states: "(1) An accommodation party is one who signs the instrument in any capacity for the purpose of lending his name to another party to it.”
Scott v. Citizens Bank of Americus, 373 S.E.2d 633 (Ga. Ct. App. 1988). · cites it 8× “Instead, this evidence establishes that appellant occupies the status of an accommodation party.”
Brice v. Nw. Georgia Bank, 368 S.E.2d 816 (Ga. Ct. App. 1988). · cites it 4× “Moreover, Georgia courts have held that the payee’s knowledge of the accommodation does not relieve the accommodation party of liability in the capacity in which he has signed the instrument.”
Bank of Terrell v. Webb, 341 S.E.2d 258 (Ga. Ct. App. 1986). · cites it 2× “OCGA § 11-3-415 (3). Webb could offer parol proof that he was an accommodation party and thereby establish his rights as a surety.”
Richards v. First Union Nat'l Bank of Georgia, 405 S.E.2d 705 (Ga. Ct. App. 1991). · cites it 2× “See OCGA § 11-3-415. Th $189,819.63 note was a consolidation and renewal of prior notes fo personal loans made by the bank to Richards.”
Consum. Solutions Fin. Servs., Inc. v. Heritage Bank, 684 S.E.2d 682 (Ga. Ct. App. 2009). · cites it 2× “The obligation is owed to a person entitled to enforce the draft or to an indorser who paid the draft under Code Section 11-3-415. In turn, the bad check statute, OCGA § 13-6-15 (a), provides in relevant part: Notwithstanding any criminal sanctions which may apply, any person…”
Darien Bank v. Miller, 431 S.E.2d 165 (Ga. Ct. App. 1993). · cites it 2× “Evidence showed Mclver paid several thousand dollars of the proceeds of the original note to Miller as repayment on a previous debt, but Miller also testified that he signed as a co-maker on the note merely as an accommodation party with the understanding that Mclver remained…”
Aultman v. United Bank of Crawford, 378 S.E.2d 302 (Ga. 1989). · cites it 2× “OCGA § 11-3-415 (3). 1 2. Aultman follows up his first argument by asserting that even if Stackler were a surety, payment of the note by one who, like Stackler, was primarily responsible to the payee, extinguished the debt and the security was automatically released.”
Callicott v. Reeves & Wagner Constr. Co., 405 S.E.2d 116 (Ga. Ct. App. 1991). · cites it 2× “Held: The note in question recites that it was given in lieu of a lien being filed and for payment of work performed by plaintiff for North Atlanta Homes, Inc. Defendant signed the note twice, first as president of North Atlanta Homes, Inc.”
— 11-3-415(5) — 1 case
Tidwell v. Amsouth Bank, N.A. (In Re Cavalier Homes of Georgia), 102 B.R. 878 (Bankr. M.D. Ga. 1989). “O.C.G.A. § 11-3-415(5) (1982). Individual Defendants claim that Plaintiff is not entitled to subrogation because part of their debt to AmSouth Bank is still outstanding.”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.