Bostwick Banking Co. v. Arnold
| Decision Date | 12 November 1970 |
| Docket Number | No. 25755,25755 |
| Citation | 178 S.E.2d 890,227 Ga. 18 |
| Parties | , 8 UCC Rep.Serv. 869 BOSTWICK BANKING COMPANY v. James A. ARNOLD et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court
The Court of Appeals erred in reversing the judgment of the trial court which had granted a summary judgment to the plaintiff in this suit on two promissory notes under seal.
Fred Bartlett, Jr., Albany, Twitty & Twitty, Frank S. Twitty, Camilla, for appellant.
E. Louis Adams, Albany, for appellees.
This case originated in the Superior Court of Calhoun County when Bostwick Banking Company filed suit against James A. Arnold and Marvin D. Smith on two promissory notes under seal. One note was dated July 2, 1968 in the principal sum of $15,000. The other note was dated October 26, 1968, in the principal sum of $10,000. This note was in renewal of a note dated July 30, 1968 for $12,000. The defendants filed their joint answer which, as amended, alleged that P. T. Bostwick of the banking company, plaintiff, was to type in each of the notes above their individual signatures, 'Sunshine Sales Corporation', claiming that said notes were intended to be the obligation of the Sunshine Sales Corporation and that the bank official, by failing to type 'Sunshine Sales Corporation' above the defendant's signatures, so altered the notes as to relieve said Smith and Arnold from liability thereon.
Bostwick Banking Company filed a motion for a summary judgment. The trial judge passed an order thereon which stated, 'after consideration of the issue made by pleadings, affidavits, deposition and interrogatories, it being agreed by the parties that all of same were made part of the record in this motion, and after submission of briefs by both parties, and having taken the matter under advisement until this date, it is considered, ordered and adjudged that the motion of plaintiffs for summary jdugment is granted and judgment is rendered for the plaintiff as prayed, for the amount sued for.' Thereafter, an order and judgment was entered for the plaintiff in the amount sued for plus interest, attorneys' fees and costs. From this order and judgment the defendants appealed to the Court of appeals wherein they contended that the granting of the motion for a summary judgment was contrary to the pleadings and evidence and that said judgment was contrary to law.
The Court of Appeals held, in part, that where it appears from the evidence that there remains a genuine issue as to any material fact, in motion for summary judgment should be denied, and that the conflicting testimony as to the material alteration of the instrument makes a question for jury determination, and the trial court erred in granting a summary judgment.' Motion for rehearing having been denied, Bostwick Banking Company made application to this court for certiorari.
The appellant in this court, the plaintiff in the trial court, contends that the Court of Appeals erred in ruling that under Code Ann. § 109A-3-403 (Ga.L.1962, pp. 156, 257) if the representative does not show he signed in a representative capacity he is personally obligated, and in then going further and holding that defendants could show that the notes were intended to be the obligations of the corporation and not obligations of the individuals who signed the notes.
Believing, as has often been held, that the four corners or the face of a note tell the story and that the instrument itself is the best evidence of the intent of the parties, we set forth the substance of the two notes sued on as follows:
Arlington Ga., 7-2-68
$15,000.00 6 months-3-2-69 pay to after date we jointly and severally promise to
The order of Bostwick Banking Co.
Fifteen Thousand Dollars with interest from maturity * * * (body of note omitted) Value received.
Given under the hand and seal of each party.
Due 3-2-69
Marvin D. Smith (Seal)
James A. Arnold (Seal)
_ _ (Seal)
This was the first note signed by Smith and Arnold.
$10,000.00 3 Mo. 1-30-69 after date, we jointly and severally promise to pay to the order of Bostwick Banking Co.
At Bostwick Banking Co., Arlington, Ga.
Ten Thousand Dollars with interest from maturity * * * (body of note omitted) Value received.
Given under the hand and seal of each party.
No.
Due 1-30-69
Marvin D. Smith (Seal)
James A. Arnold (Seal)
This latter note was given in renewal of the following note.
$12,000.00 3 Mos. 10-30-68 after date We, jointly and severally promise to pay to the order of Bostwick Banking Co.
At Bostwick Banking Co., Arlington, Ga.
Twelve Thousand and no/100 _ _ Dollars with interest from maturity * * * (body of note omitted) Value received.
Given under the hand and seal of each party.
Due 10-30-69
J. A. Arnold (Seal)
Marvin D. Smith (Seal)
There really is no genuine issue as to any of the material facts. The defendants admit that they signed the notes. There is no evidence that anything has been paid on said notes and they acknowledge that they received notice from plaintiff's attorney of intention to file suit and claim attorney's fees. Bostwick Banking Company contends that it agreed to lend $25,000 to Arnold and Smith, but that the loans were to be made to them individually and that it was only on this basis that the board of directors approved the loans. The defendants' defense to the suit on the notes was based solely on their contention that they had an agreement with the plaintiff's Mr. P. T. Bostwick that when the notes were received by the bank he was to write above and opposite their individual signatures the words 'Sunshine Ford Sales Company, By:' This was denied by Mr. Bostwick.
The record shows that on May 1, 1968, Marvin D. Smith was issued 285 shares of stock in the Sunshine Sales Corporation. Mr. Arnold, on the same date, was issued 190 shares. Mr. Arnold's wife owned 10 shares and Mr. Smith's wife owned 15 shares. The fact that this stock was put up as collateral for the loan is no evidence that it was considered a corporate loan. Had the note been signed in the name of the corporation with a corporate seal with a resolution of the board of directors authorizing the officers to negotiate the loan, a pledge of the stock would not have been necessary since the affixing of the corporate name and seal to the instrument would cover the total assets of the corporation. But there was no corporate resolution authorizing the negotiation of these loans on file with the bank. The only authorization on file with the bank was with respect to the commercial account of Sunshine Ford Sales, Inc., which authorized the bank to recognize the signatures of Marvin D. Smith, as president, and Mrs. Marvin D. Smith, as secretary and treasurer.
The physical evidence as exhibited by the notes shows that it would have been impossible to write in the name 'Sunshine Sales Corporation' above the signatures of the defendants affixed...
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