Albany Federal Savings C. Assn. v. Henderson , 200 Ga. 79 ( 1945 )

The sole basis upon which recovery was sought and obtained was an alleged breach of that portion of a written contract comprising an alleged mutual verbal departure. Unless the original contract has been modified by the alleged mutual departure, then the petitioner, in view of the former decision by this court in Albany Federal c. Assn. v.Henderson, 198 Ga. 116 (31 S.E.2d 20), would have no case, and no valid judgment in his favor could be rendered. The general contract between the parties comprises a written application for a loan, a security deed, two notes for $8000 each, and a loan-settlement statement. The alleged departure, upon which the petitioner's entire case must rest, is petitioner's exhibit 10, which under the testimony of the petitioner's father and general agent, who has handled the entire matter for the petitioner, is nothing more or less than a floor plan or working plan of the identical structures represented by exhibits 8 and 9 which, according to the undisputed evidence, were before the parties and were agreed upon by them at the time the loan was closed on August 25, 1941. The fallacy, as I see it, in the petitioner's pleadings, his evidence, and the majority opinion of this court lies in the fact that the original contract is treated as a single and inseparable unit, whereas it is obvious that the contract contains separate, independent, and complete clauses or contracts. This appears beyond any reasonable doubt when it is observed that in one portion of the general contract there is a provision for an unconditional loan of $8000 represented by a note, the proceeds from which were, under the terms of the contract, made available to the borrower immediately upon the execution of the contract, while another portion of the contract provides for a note for $8000 conditioned upon the approval by the lender of plans and specifications for the erection of a four-unit apartment on lots 54 and 56. Is it not very plain indeed that any alteration or departure from the terms and provisions of the contract relating to the first $8000 note will in no wise touch or alter the terms and conditions of the contract that relate solely to the second or conditional note, or vice versa? It is submitted that regardless of what use is made of the proceeds of the first loan, whether it be for the erection of a structure in front of the Godwin home, as was done by the petitioner, or for alterations exclusively inside of the Godwin home, the other portion of the general contract relating to the conditional $8000 loan remains as written, unaltered and unaffected. What is the mutual departure upon which this suit is based? Mr. Henderson, the father and general agent of the petitioner, in his testimony gives the only answer to this question to be found in the record. At page 71 is the following excerpt of his testimony: "Now, the plaintiff's exhibit No. 10 is what might be known as a floor plan. I referred to it as a working plan. I say that exhibit is the exhibit which I worked out after the contract was signed and which I brought to Mr. Leader's office a week or ten days after the contract was executed. As to whether that is the only change that was made in any of these plans, that is all I know of or can think of right now. . . It does not change the location [as shown by petitioners' exhibits 8 and 9], only the front part of the house is sitting back about two feet. . . I say if any change was made the only change that was made was made in the floor plan." This same witness testified that the petitioner's exhibits 8 and 9 were pictures of the structures to be erected and as they would appear when completed, and represent four new apartments in front of the Godwin home and four apartments within the Godwin home, that they were in Mr. Leader's office at the time the contract was signed, that they were agreed upon at the time, and represent what the petitioner was going to do under the contract. Thus it is undeniable that under the evidence in this case the only thing which the petitioner contends was a departure from the original contract is the agreement of the parties to exhibit 10, which is nothing more or less than the floor plan of the structure represented by exhibits 8 and 9 to which the parties had agreed simultaneously with the execution of the contract. This exhibit admittedly makes no attempt to fix the location. Therefore, by agreeing to it there is no semblance of an agreement to change the location of the four-unit apartment which the contract requires to be located on lots 54 and 56. How then can it be said that by agreeing to exhibit 10 the parties mutually agreed to alter the clause of the contract relating to the second or conditional note for $8000? Instead of there being evidence, circumstantial or otherwise, to authorize a finding of, or to intimate, a mutual intention of the parties to apply the proceeds from the conditional loan to the erection of the structure represented by exhibit 10, there is positive proof that neither party intended such. This proof is found in a letter addressed to the lender and signed by the general agent of the petitioner, dated September 1, 1941, and reading as follows: "For the sum of $8000 I propose to make the following changes and additions to that property known as the Godwin Home Place, corner of Jackson and Flint Streets, being No. 229 Jackson Street, Albany, Ga., as follows: Build 4 separate apartments in front of the present structure, each one complete with separate bath, kitchen, living room, dinette, 2 bedrooms. I propose to change the rear of the present structure so as to make living quarters of 8 rooms, being 4 rooms downstairs and 4 rooms upstairs; 1 bath upstairs; toilet and lavatory downstairs; entrance to be from Flint Street." The uncontradicted testimony at the trial shows that the substance of this letter was stated verbally to the lender, and the lender stated that, while he and the borrower knew that such was the opinion of the borrower, others did not know it, and he requested that the statement be reduced to writing in the form of a letter, and thereupon Mr. Leader wrote the letter as dictated by the petitioner's general agent. This letter states that the separate four-unit apartment in front of the Godwin home and certain alterations in the Godwin home would be completed with the sum of $8000 (not $16,000). In the face of this express intention of both parties, which is not and can not be denied, this suit claims, the jury found, and the majority of this court approved that finding, that the parties intended to use $16,000 instead of $8000, and all of this despite the fact that the undisputed evidence shows that neither party to the contract ever at any time as much as mentioned to the other the conditional $8000 note, the proposed four-unit apartment to be erected with the proceeds of that note on lots 54 and 56 or the approval by the lender of the plans and specifications for such structure. Admittedly the only funds ever made available to the borrower were the proceeds from the unconditional note, and it was with these funds and these alone that the structures begun by the petitioner were partially erected. Not one dime of the proceeds from the conditional note has been used for that purpose, nor is there a single word of evidence in this record to show that either party ever agreed or intended that any proceeds from this note should be applied to such structure. The general contract clearly shows that the proceeds from the $8000 unconditional note were intended by the borrower to be used for the erection of a four-unit apartment, either in the front portion of the old Godwin home or in front of the old Godwin home and for living quarters in the rear. Whether it be said that the contract as to the exact location of the structures intended by this portion of the contract is uncertain and ambiguous, or that the parties agreed to depart from the original plan in this connection, it is nevertheless clear beyond dispute that the parties had before them exhibits 8 and 9 and agreed to such exhibits simultaneously with the execution of the contract. These exhibits provide for a new structure in front of the Godwin Home Place. The work begun conforms to these exhibits, and is in harmony with the contract and the intention of the parties as relates exclusively to the first or unconditional note. These documents, exhibits 8 and 9, having been before the parties and agreed upon simultaneously with and as a part of the contract must be read and construed together with the contract itself. Read v. Gould, 139 Ga. 499 (77 S.E. 642); Dyal v. Foy Shemwell Inc., 159 Ga. 848 (126 S.E. 783); Mathewson v. Brigman Motors Co., 23 Ga. App. 304 (98 S.E. 98).

Were there nothing in the evidence to indicate a contrary intention, the fact that a separate four-unit apartment in front of the Godwin home was assented to by the parties after the execution of the contract might possibly have authorized the jury to draw an inference that they intended for this to take the place of the apartment in the rear as provided by the contract. But something very definitely does appear, showing conclusively a contrary intention, to wit: the borrower by his letter of September 1, 1941, specified this apartment as the structure he intended to build with the proceeds of the unconditional loan which was then available and none of which had been used. Then, when five days thereafter he presented to the lender the floor plan shown by exhibit 10, which is a floor plan of the structure he had described in such letter, there is no room for any reasonable inference except that both parties, by agreeing to the floor plan shown by exhibit 10, intended that it conform to the letter of September 1, 1941, and be erected with the first loan, and that neither thereby intended to alter the terms of the conditional loan.

The majority opinion quotes the Code, § 38-507. I think that section has no application here. The applicable statute is § 20-116, but under this latter section a departure that will work a novation of the original contract must be mutually intended and assented to. Bearden Mercantile Co. v. Madison Oil Co.,128 Ga. 695 (58 S.E. 200); Southern Feed Stores v. Sanders,193 Ga. 884 (20 S.E.2d 413); Jones v. Lawman, 56 Ga. App. 764 (194 S.E. 416); Pittsburgh Plate Glass Co. v. Jarrett,42 F. Supp. 723. Can this court, when the evidence shows no mutual departure, hold that the jury was authorized to find that the lender in this case agreed with the borrower and consented that the proceeds from the conditional loan of $8000 should be diverted from the original purpose of erecting an apartment on lots 54 and 56, and be applied to an apartment in front of the Godwin Home Place, in the face of the precaution that the lender took to avoid just such a predicament by requiring the borrower to state in writing over his own signature that the structure in front of the Godwin Home Place, together with the alterations of the old building, would be completed with the sum of $8000, which is exactly the amount of the unconditional loan? If this precaution on the part of the lender will not protect him against the claims asserted here, then I submit that it would be difficult for one to reduce his agreement to writing in any form and thereby avoid unfounded claims in contradiction to that writing. We have here the borrower stating over his own signature that the structure which he has stating was to be completed with an expenditure of $8000. We have documents to which both parties agreed providing for the same thing. We have the lender testifying under oath to the same thing, and the only thing upon which this overwhelming evidence is set aside is the testimony of Henderson's general agent that a departure and alteration of the writing had been agreed upon subsequently to the contract, and then testifying that the only departure or alteration agreed upon subsequently to the contract was the petitioner's exhibit 10, which is simply a floor plan for the structure shown by the petitioner's exhibits 8 and 9 and which was contemplated by the contract and agreed upon by the parties at the time of its execution. To allow a party to stand in the face of this overwhelming evidence and assert a claim upon such utterly baseless ground, should not have the sanction of law.

Undoubtedly the ugly picture of the incomplete building, leaving as it does the entire structure exposed to the weather, which will cause rapid deterioration, and also rendering all of it untenantable, thus depriving the owner of any income therefrom, makes a strong appeal to the human heart and causes deep sympathy to go out to the unfortunate owner. In the absence of legal obstacles, the natural and human reaction would be to help such owner and protect him against such loss. If another inflicted it, then such other one should be required to compensate him in damages. Then, with the petition and the testimony on behalf of the petitioner stating a general conclusion of the witness, saying to the jury that the lender caused the damage by a breach of the contract to lend money with which to complete the work, the jury evidently made its verdict upon this alone, without taking note of the fact that: (a) there was no evidence to show a mutual departure from the contract; (b) if there was any departure, it related solely to that portion dealing with the loan actually made; and (3) there was no semblance of a breach of the contract by the lender shown by any evidence whatsoever. The jury might easily have overlooked these insurmountable legal obstacles to any recovery, but this court can not overlook them. Indeed one of the purposes for allowing a review by this court is to insure that every case terminate in a judgment arrived at by observing all applicable rules of law, and thus subject evidence to careful scrutiny for its legal import. We know that, although the petitioner has suffered great injury, he can not lawfully require the lender to compensate him for that injury unless the lender caused the injury by a breach of the contract in the manner alleged in the petition. We know that, when given its full legal meaning, the petitioner's evidence fails to show such a breach, and hence it becomes our duty to reverse the judgment. The undisputed evidence shows that the petitioner's entire injury resulted from his faulty judgment in thinking that he could complete the building started with the $8000 he obtained with the first note, just as he said he could do in the letter of September 1, 1941, addressed to the lender. His signed statement that it would be done with $8000 is irreconcilable with the jury's finding that the parties had agreed to do it with $16,000. By that letter both parties state what their intentions were, what they mutually agreed to as to the total amount of money they intended to use in completing the structure the petitioner started. It does not come within the lawful power of the jury to disregard what both parties thus say was their intention, and in the absence of a scintilla of other evidence find their intention to have been to expend double the amount the parties state, and spend $16,000 instead of $8000. Such a finding by the jury being essential to authorize the verdict rendered, and the evidence demanding a different finding, the verdict is contrary to both the law and the evidence, and the court erred in overruling the general grounds of the motion for new trial.

I have not discussed the rulings upon the exceptions to the charge of the court, but in view of the clear error, as I see it, in the ruling on the general grounds, the case should be reversed, and I am unable to concur in any of the rulings made in the majority opinion.