Commonwealth Land Title Ins. Co. v. Miller, A90A0462

Decision Date17 May 1990
Docket NumberNo. A90A0462,A90A0462
Citation195 Ga.App. 830,395 S.E.2d 243
PartiesCOMMONWEALTH LAND TITLE INSURANCE COMPANY v. MILLER.
CourtGeorgia Court of Appeals

Ford & Harrison, F. Carlton King, Jr., John L. Monroe, Jr., Atlanta, for appellant.

Michael Mears & Associates, Michael Mears, Decatur, Towery, Thompson, Gulliver & Bunch, David Gottlieb, Matthew A. Towery, Atlanta, for appellee.

McMURRAY, Presiding Judge.

In February of 1979, Albert Raymond Miller and Linda Miller purchased a residence from Hazel Bartow by delivering a promissory note and deed to secure debt to Mrs. Bartow in the amount of $48,000. On April 29, 1980, Mr. Miller wrote Mrs. Bartow to advise her of their intent to sell the property, further stating that "[p]ursuant to our agreement, any prospective buyer must be approved in writing by you if the prospective buyer wishes to assume the mortgage that you hold." No sale was made to a third party at that time, but after they divorced in 1982, Mr. Miller deeded the property to Mrs. Miller, who then began making the monthly payments to Mrs. Bartow. Mr. Miller testified at trial that Mrs. Bartow had orally agreed to the title transfer, but no written approval was obtained. Subsequently, because of financial troubles, Mr. Miller bought the property back from Mrs. Miller, with Mrs. Bartow's knowledge but without her written approval. In February of 1985 Mr. Miller conveyed the property to Sam F. Woodley, Jr., "contingent upon purchaser being able to assume the existing first mortgage in favor of Hazel Bartow." Mr. Woodley began making payments on the promissory note but he defaulted in August of 1985, after which Mrs. Bartow assigned the note to appellant Commonwealth Land Title Insurance Company ("Commonwealth").

Commonwealth brought the instant action against Mr. and Mrs. Miller, seeking to recover all principal and accrued interest plus attorney fees as provided in the note. Mr. Miller filed a third party complaint against Sam F. Woodley, Jr. Mrs. Miller did not answer or defend and default judgment was entered against her prior to trial. At trial, the amount of the deficiency was uncontested, but Mr. Miller defended on the ground that Mrs. Bartow's actions constituted a release by novation, waiver or equitable estoppel sufficient to relieve him of liability on the note. The trial judge overruled Commonwealth's motion for directed verdict and the jury found in favor of Mr. Miller. Commonwealth appeals from the denial of its motion for directed verdict and certain of the trial court's jury charges. Held:

" 'A novation ... has four essential elements: (1) a previous valid obligation, (2) the agreement of all the parties to the new contract, (3) the extinguishment of the old contract, (4) the validity of the new one. (Cits.) ... There may be a novation of debtors, but the novation must be such as to release the original debtor and substitute a new debtor in his place.' [Cit.] In the case at bar there is no dispute that a previous valid obligation existed between [Mr. Miller] and [Mrs. Bartow]. However, the evidence also established that [Mr. Miller] remained obligated on the [Woodley mortgage], and no other debtor was substituted for his obligation. Thus, no novation occurred here." Randall v. Norton, 192 Ga.App. 734, 736(2), 386 S.E.2d 518 (1989).

More than two months after the sale to Sam F. Woodley, Jr., Mrs. Bartow's attorney wrote him requesting prompt payments in accordance with the note and advising him that the note had been transferred without the consent of Mrs. Bartow, the holder, who did not waive any rights she had under the deed to secure debt. The fact that Mrs. Bartow accepted, or even demanded, payments from Sam F. Woodley, Jr., did not create a novation so as to substitute him as obligor on the note because: "there was no agreement of all parties to create a new contract and extinguish the old contract, and [Mr. Miller's] valid obligation to pay the indebtedness remained. [Cits.]" Gosnell v. Waldrip, 158 Ga.App. 685, 687(3), 282 S.E.2d 168 (1981). Accord Hall v. Robertson, 168 Ga.App. 582, 309 S.E.2d 690 (1983). "In order for [Mr. Miller] to be released, there must be clearly shown both the intention of the creditor to release the first obligor as well as the extinguishment of his liability. (Cits.) No such evidence was presented here." Motel Mgmt. Systems v. Billing, 143 Ga.App. 702, 703(1), 240 S.E.2d 173 (1977). See also Hall v. Bank South, Washington County, 186 Ga.App. 860, 368 S.E.2d 810 (1988).

Nor was any waiver or estoppel shown by the initial transfers of the property between Mr. and Mrs. Miller. They both executed...

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15 cases
  • Harrison v. Martin
    • United States
    • Georgia Court of Appeals
    • May 27, 1994
    ...in favor of [the estate]." Truck Parts, etc., v. Rutledge, 211 Ga.App. 166(2), 438 S.E.2d 404. See Commonwealth Land Title Ins. Co. v. Miller, 195 Ga.App. 830, 833, 395 S.E.2d 243; Ohoopee Prod. Credit Assn. v. Aspinwall, 183 Ga.App. 306(1), 358 S.E.2d In the case sub judice, Martin testifi......
  • Richardson v. Phillips
    • United States
    • Georgia Court of Appeals
    • February 11, 2010
    ...and it is undisputed that Phillips remained liable on the original promissory note. See, e.g., Commonwealth Land Title Ins. Co. v. Miller, 195 Ga.App. 830, 832, 395 S.E.2d 243 (1990). Two days later, on October 4, 2000, Union entered into a Capital Lease Agreement with Miller County under w......
  • Hovendick v. Presidential Financial Corp.
    • United States
    • Georgia Court of Appeals
    • February 10, 1998
    ...Presidential had a prima facie right to recover the face value due on the Note. OCGA § 11-3-308(b); Commonwealth Land Title Ins. Co. v. Miller, 195 Ga.App. 830, 833, 395 S.E.2d 243 (1990) (decided under former Code section 11-3-307). Having established this right, Presidential was entitled ......
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