Henson v. Columbus Bank & Trust Co.

• Decision Date: 02 November 1977
• Docket Number: No. 3,No. 54482,54482,3
• Citation: 240 S.E.2d 284,144 Ga.App. 80
• Court: Georgia Court of Appeals
• Parties: K. M. HENSON v. COLUMBUS BANK & TRUST COMPANY

Page 284

240 S.E.2d 284

144 Ga.App. 80

K. M. HENSON v. COLUMBUS BANK & TRUST COMPANY.

No. 54482.

Court of Appeals of Georgia, Division No. 3.

Nov. 2, 1977.

Rehearing Denied Nov. 22, 1977.

Aultman, Hulbert, Daniel & Lawson, Tom Daniel, Perry, Henson & Cheves, P. C., Cecil M. Cheves, James E. Butler, Jr., Columbus, for appellant.

Page, Scrantom, Harris, McGlamry & Chapman, W. M. Page, Columbus, Hansell, Post, Brandon & Dorsey, Hugh M. Dorsey, Jr., W. Rhett Tanner, Atlanta, for appellee.

BIRDSONG, Judge.

Appellant Henson brings this appeal from the grant by the trial court of the motion by Columbus Bank & Trust Co. (CB&T) to dismiss Henson's action and complaint with prejudice.

The facts giving rise to this litigation show that for a number of years CB&T had made loans to Henson. The actual number of these loans is not shown, but apparently each was represented by a demand note at varying rates of interest, depending upon the rate of interest prevailing at the time of the loan. It is uncontested that prior to the suit filed by CB&T in May, 1975, upon the 11 unpaid demand notes, CB&T had not demanded payment of any of Henson's notes. Henson had paid off a number of the notes and maintained the remaining 11 demand notes by paying quarterly interest payments. At the time of the filing of the suit by CB&T, Henson owed in excess of $117,000 in aggregate on the 11 notes. Each note as executed called for payment of interest at a set and certain rate, but it appears that it was established practice for the bank to bill the quarterly interest at the prime rate existing at the time of the billing. These interest payments as billed were paid by Henson for a number of years though it appears that he complained increasingly over the interest costs and finally refused to pay further interest costs after the fall of 1974. Moreover, Henson did not pay the principal in 1974. The quarterly interest payments were set at rates ranging from 6% To a high of 131/2%. After Henson refused to make additional interest payments except at the rate specified in each note, CB&T and Henson negotiated unsuccessfully. In May, 1975, CB&T filed suit upon the notes, each being a demand note, maintaining that Henson refused to pay the notes. Henson, for the avowed purpose of avoiding the payment of attorney fees, amounting to more than $18,000, immediately paid off all 11 notes without filing any defensive pleadings to the complaint by CB&T. The bank dismissed its suit.

Henson then filed suit against CB&T in a federal district court, alleging a violation of the truth in lending act, collection of usurious interest, and breach of contract in that the bank charged more interest than that called for by each note, plus a demand for attorney fees. After the passage of 18 months, the federal district court concluded that all but the truth in lending count were more properly brought in a state forum, and accordingly dismissed them without prejudice. Henson, relying on the renewal statute, Code Ann. § 3-808, then brought this suit in the Superior Court of Muscogee County containing the same counts as in the federal suit, with an additional count alleging defamation in that the bank had wrongfully alleged in its complaint that Henson refused to pay his just debts.

CB&T moved the state court to dismiss Henson's complaint alleging that by his voluntary payment of the indebtedness without filing defensive pleadings, Henson was barred from seeking the return of the voluntary payments; that by paying the interest installments he waived or was estopped from claiming a breach of contract; that, as demand notes, each note was "past due," thus the bank had a right to sue thereon; and, that the Georgia renewal statute does not apply to a suit first filed in a federal court, therefore, for that reason, the statute of limitations had run on the recovery of the alleged usurious interest as well as on the defamation count sounding in tort. Upon the grant of the motion to dismiss the action upon each ground asserted by CB&T, Henson brought this appeal. Held :

1. We affirm. Though the record in this case extends only to 76 pages, the combined briefs of counsel amounted [144 Ga.App. 82] to 128 pages and appellant has enumerated 22 errors. Nevertheless, as we view the record, the issues ultimately resolve themselves into the legal effect of the voluntary payment of the indebtedness by Henson and whether the Georgia renewal statute is applicable under the circumstances of this case. It would appear that the claim for return of interest charged by the bank would have merit and an action therefor would lie, only if the renewal statute tolled the statute of limitations.

2. In his brief in support of his enumerations of error, Henson alleges facts tending to show the coercive forces of the bank, including another very large indebtedness upon which Henson was secondarily liable. These facts do not appear anywhere in the record of the pending appeal. "This court is a court for the correction of errors and its decision must be made on the record sent to this court by the clerk of the court below and not upon the briefs of counsel. See Greene v. McIntyre, 119 Ga.App. 296, 167 S.E.2d 203; Palmer v. Stevens, 115 Ga.App. 398(8), 154 S.E.2d 803; Meltzer v. C. Buck LeCraw & Co., 225 Ga. 91(1), 166 S.E.2d 88." Jenkins v. Board of Zoning Appeals, 122 Ga.App. 412(2), 177 S.E.2d 204 (1970). Accordingly, we will limit our consideration to the record before us.

3. We first examine Count II in Henson's complaint alleging breach of contract. We have considered the implied arguments that the notes are clear and unambiguous and are not subject to amendment by parol, or that a breach has occurred; the argument that Henson is estopped to urge breach of contract because by his conduct he has accepted changes in the terms; as well as the other arguments proffered by the parties in regard to this count. We are satisfied, however, that by his voluntary payment of the interest demanded by CB&T on a quarterly basis, as well as the voluntary payment of the entire indebtedness as demanded in May, 1975, Henson cannot demand the return of the interest based upon an alleged breach of contract. Where a party pays an illegal demand with full knowledge of all the facts which render such demand illegal, without an immediate and urgent necessity therefor, or unless to release his person or property from detention, or to prevent an immediate seizure of his person or property, such payment must be deemed voluntary, and cannot be recovered. And even if the party at the time of making the payment should file a written protest, this does not make the payment involuntary. Strange v. Franklin, 126 Ga. 715, 717, 55 S.E. 943 (1906); Hoke v. City of Atlanta, 107 Ga. 416, 420, 33 S.E. 412 (1899); Savannah Savings Bank v. Logan, 99 Ga. 291, 25 S.E. 692 (1895); Crisler v. Bank of Canton, 58 Ga.App. 485, 490, 199 S.E. 252 (1938); Eibel v. Royal Indemnity Co., 50 Ga.App. 206 (1), 177 S.E. 350 (1934). See also Flanders v. Columbia Nitrogen Corp., 135 Ga.App. 21, 22, 217 S.E.2d 363 (1975). In this case, Henson not only did not file a written protest but he also consistently paid quarterly the interest rate charged by the bank for a period extending over several years. While Henson argues that the usurious nature of the interest charged circumvents the application of the rule precluding the recovery of voluntary payments, for the reasons shown hereinafter, the statute of limitations thwarts Henson's recovery of the interest based upon usury. Thus in this phase of the opinion, we are dealing only with an alleged breach of contract. Furthermore, Henson has not shown that there was an urgent necessity to pay the claim for interest to avoid the payment of attorney fees or to preclude the loss of other property or the loss of his own freedom. Henson had to know that the simple device of filing defensive pleadings and demanding the return of all interest because of usurious rates would have either indefinitely delayed or precluded the loss of his property. For the reasons stated there was no ground upon which Henson could recover the voluntarily paid interest; accordingly, the trial court did not err in dismissing Count II of the complaint.

4. In Counts I and III of the complaint, Henson alleged that CB&T violated the Truth in Lending Act (Count I) and defamed him by erroneously alleging that he "wrongfully refused" to pay his just debts (Count III). Henson admits that he did not file his complaint in the Superior Court of Muscogee County until more than one year had expired following the last alleged violation of the Truth in Lending Act and from the time that the alleged defamatory allegation had been published in CB&T's pleadings. Henson attempts to avoid the effect of the statute of limitation imposed by the Truth in Lending Act, for actions involving torts directed to the reputation, as well as recovery of usurious interest, by reliance upon the Georgia Renewal Act, Code Ann. § 3-808. It is uncontested that the statute of limitation as to each of the mentioned causes of action is one year. See Section 130 of the Federal Truth in Lending Act (15 U.S.C. § 1640); Code Ann. § 3-1004 concerning torts; and Code Ann. § 57-115, together with Camp Lumber Co. v. Citizens Bank, 142 Ga. 84(2), 82 S.E. 492 (1914) concerning usury.

Though Henson questions the cogency of the reasoning in the cases, it is clear that the law of this state denies Henson the use of the renewal statute to toll the running of the statute of limitations. As was said in Constitution Publishing Co. v. DeLaughter, 95 Ga. 17, 21 S.E. 1000 (1894) in a discussion of the renewal statute, at p. 18, 21 S.E. at p. 1000: "It seems to us to have been the manifest intention of the legislature that it should apply only to state courts, for in the act of 1847 it uses the words 'courts of this State,' meaning, in our opinion, courts created by the constitution...