Barton v. Scott Hudgens Realty & Mortg., Inc., 51231
| Decision Date | 14 November 1975 |
| Docket Number | No. 3,No. 51231,51231,3 |
| Citation | 136 Ga.App. 565,222 S.E.2d 126 |
| Parties | , 18 UCC Rep.Serv. 982 C. B. BARTON et al. v. SCOTT HUDGENS REALTY & MORTGAGE, INC |
| Court | Georgia Court of Appeals |
Raiford, Hills, Billington & McKeithen, Richard A. Hills, Jr., Decatur, for appellants.
Jones, Bird & Howell, Arthur Howell, III, Atlanta, for appellee.
Appellee relies upon Freezamatic Corporation v. Brigadier Industries Corporation, 125 Ga.App. 767, 189 S.E.2d 108, wherein it was held that under our Uniform Commercial Code when execution of a promissory note is admitted but an affirmative defense is not raised, judgment on the pleadings in favor of the holder is proper. While it is true that Code Ann. § 109A-3-307(2) provides for such a circumstance, what the appellee (and also the appellants) overlooked is that the provisions of Code Ann. Ch. 109A-3 apply only to negotiable instruments and the 'promissory note' here in issue does not so qualify. This 'promissory note' by its terms was made payable 'upon evidence of an acceptable permanent loan . . . and upon acceptance of the (loan) commitment'; however under Code Ann. § 109A-3-104(1)(c) a negotiable instrument must 'be payable on demand or at a definite time.' The 'note' here was not payable on demand under the language of § 109A-3-108 and under § 109A-3-109(2) '(a)n instrument which by its terms is otherwise payable only upon an act or event uncertain as to time of occurrence is not payable at a definite time even though the act or event has occurred.' The language of the 'promissory note' therefore reveals that it was not payable on demand or at a definite time, was therefore not negotiable, is not subject to Code Ann. § 109A-3-307(2) and thus the Freezamatic Corporation case is not controlling authority. See Geiger Finance Company v. Graham, 123 Ga.App. 771, 182 S.E.2d 521.
The 'promissory note' is rather a contract to pay money when certain contingencies are satisfied-'upon evidence of an acceptable permanent loan . . . and upon acceptance of the (loan) commitment.' There is no dispute that the loan commitment was accepted by the appellants. Appellee contends that this commitment itself, without more, wherein one of its investors agreed to make the loan in the desired amount, satisfied the requirement of evidence of an acceptable permanent loan. Appellant, apparently relying on the fact that the loan was never finally consummated, denies that 'an acceptable permanent loan was obtained.' Thus the controversy between the parties turns upon the construction of the contract language making the amount due and payable 'upon evidence of an acceptable permanent loan.'
Under Code Ann. § 20-704(4) the whole contract should be looked to in arriving at the construction of any part. The contract provides specifically that it is for a loan...
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...23, 25-26 (1976); Sorenson v. Connelly, 36 Colo.App. 168, 170-71, 536 P.2d 328, 330 (1975); Barton v. Scott Hudgens Realty & Mortgage, Inc., 136 Ga.App. 565, 566-67, 222 S.E.2d 126, 127-28 (1975); Johnston v. State Bank, 195 N.W.2d 126, 127-29 (Iowa 1972); Bushmiller v. Schiller, 35 Md.App.......
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