Chewning v. Huebner

• Decision Date: 12 April 1977
• Docket Number: No. 53493,No. 3,53493,3
• Citation: 142 Ga.App. 112,235 S.E.2d 573
• Parties: P. R. CHEWNING et al. v. R. A. HUEBNER et al
• Court: Georgia Court of Appeals

Page 573

235 S.E.2d 573

142 Ga.App. 112

P. R. CHEWNING et al. v. R. A. HUEBNER et al.

No. 53493.

Court of Appeals of Georgia, Division No. 3.

April 12, 1977.

Rehearing Denied April 28, 1977.

Davis & Stringer, Robert H. Stringer, Decatur, Jim Hudson, Athens, Ernest J. Nelson, Jr., Decatur, for appellants.

Fortson, Bentley & Griffin, Edwin B. Fortson, Gene Mac Winburn, Athens, for appellees.

MARSHALL, Judge.

Appellants Chewning, Wilson and Wilson, appeal the jury verdict and judgment for Dr. and Mrs. Huebner, defendants below, appellees herein, based upon a suit to recover allegedly usurious interest paid upon a note given as payment for certain real property.

The facts show that Dr. Huebner and his wife sold a certain tract of land to a real estate corporation in Athens, Georgia, for $92,000. The Huebners took a note and security deed as part payment for the purchase price, accepting $32,000 down and the note for the remaining $60,000 protected by the security deed. These documents were valid on their face and are not contested. The present appellants purchased the property from the corporation (apparently without knowledge of the Huebners). The appellants assumed the note and mortgage of the Athens corporation with the ultimate consent of the Huebners. However, because of a misunderstanding, the appellants missed the next interest payment on the note when due. Dr. Huebner through his attorney exercised his right under the original note and security deed to escalate the indebtedness, and served notice of such escalation and made demand for attorney fees. The appellants, in order to protect their investment, having paid the corporation $32,000 to assume the obligation, negotiated with Dr. Huebner and arranged to enter into a new and satisfactory agreement with him. The appellants signed a new note and security deed. This required the immediate payment of $20,000 in principal, as well as shortening the repayment time and changing the rate of interest. Also by this note and deed, the Huebners looked to the appellants for satisfaction of the indebtedness. The appellants have paid the entire indebtedness, including interest upon the remaining $40,000 indebtedness at the rate of 91/2% interest. Upon the execution of the new note and indebtedness, the original note and deed were stamped as having been canceled by renewal, and both documents were acknowledged as having been canceled as indicated by the signatures of the Huebners. The appellants brought this suit seeking the return of all interest paid upon the $40,000 as being usurious. The trial court rejected a motion for summary judgment, a motion for directed verdict following the presentation of evidence by the defendant, and entered judgment upon the jury's verdict in favor of the Huebners. The appellants enumerate as error the denial of their subsequent motion for new trial, or alternatively judgment n. o. v., the denial of their motion for directed verdict and certain instructions given by the trial judge. Held :

In this case there was, by mutual agreement, a substitution for the original debtor, the Athens corporation, by the appellants herein. A new note was executed between the Huebners and the appellants, and it was the clear and expressed intention of the Huebners that the new note acted as a cancellation of the original debt. This constituted a novation. Acree v. Kay, 188 Ga. 783, 787, 4 S.E.2d 820 (1939); Yancey Brothers Co. v. Bowling, 92 Ga.App. 291, 293(2)(3), 88 S.E.2d 566 (1955). An existing contract is superseded and discharged whenever the parties subsequently enter upon a valid and inconsistent agreement completely covering the subject matter embraced by the original contract. Hennessy v. Woodruff, 210 Ga. 742, 744, 82 S.E.2d 859 (1954). See American Iron & Co. v. Nat. & Gas Co., 105 Ga.App. 458, 462, 125 S.E.2d 106 (1962). It follows that we will look to the terms of the last note as executed between the Huebners and the appellants herein to determine if the terms thereof provided for usurious interest.

If a grantor and grantee agree upon a cash price of property which is the subject matter of the sale, but the sale itself is not for cash, but is distinctly on a credit until a particular time in the future, the transaction will not be rendered usurious because the grantor, in order to make a time price on the property, adds to the cash price another sum, and includes the total amount thus arrived at in a promissory note which the purchaser gives, securing the same by a mortgage on the realty. The law recognizes the right of a seller to make a difference in his cash price for his property; and though in a given instance this difference may exceed eight percent (or in the case...