Crawford v. First Nat. Bank of Rome

• Decision Date: 16 January 1976
• Docket Number: No. 51496,No. 1,51496,1
• Parties: Virginia C. M. CRAWFORD v. FIRST NATIONAL BANK OF ROME
• Court: Georgia Court of Appeals

Page 488

223 S.E.2d 488

137 Ga.App. 294

Virginia C. M. CRAWFORD v. FIRST NATIONAL BANK OF ROME.

No. 51496.

Court of Appeals of Georgia, Division No. 1.

Jan. 16, 1976.

W. Gene Richardson, Rome, for appellant.

Walton, Smith, Shaw, Maddox & Davidson, Raymond A. Majors, Jr., Rome, for appellee.

MARSHALL, Judge.

This is an appeal from a directed verdict in favor of the defendant Bank below at the conclusion of the presentation of plaintiff Crawford's evidence on a case sounding in tort.

The Bank foreclosed on property owned by Crawford pledged by security deed to the Bank upon a note in the amount of $2,739.24 from the Bank to Crawford for the purchase of a home. The note was issued in July, 1972. In October, 1974, the pledged property was sold at a properly conducted foreclosure sale. Crawford alleged in her suit that the default declared by the Bank and subsequent foreclosure sale was unlawful and in violation of the rights between the parties. These unlawful acts were alleged to have caused Crawford moving expenses of $4,000 when she was required to vacate the house foreclosed, loss of community reputation and credit standing, damaging her to the extent of $10,000, and mental strain and aggravation of a value of $10,000.

Crawford contends there was an alleged novation. She testified that during the life of the ostensible 36-month note, payments were due on the first of each month. During 1973 and 1974, Crawford missed payments on some months but paid extra payments in order to bring the note to a current status. These payments were accepted by the bank. Commencing in April, 1974, Crawford missed monthly installment payments in April and June. She made payments in May, July and August. On August 22, 1974, the Bank exercised the note option of declaring the note in default because the monthly payments were not current. Crawford requested a waiver of default in September, 1974, and the bank agreed to reinstate the note if Crawford would make the note current. While Crawford made two installment payments in September, she admitted the note still was not current, being in arrears in an amount in excess of $300.

In essence Crawford maintains that when the Bank accepted installment payments on the note after the due date, this effected a departure from the original contract. Where the parties have departed from the terms of the contract, she maintained reasonable notice must be given of an intention to rely upon the exact terms of the contract before there can be any recovery for failure to rely upon its exact terms. It is the failure of the Bank to give such notice to Crawford that forms the basis of this suit. Held:

Georgia Code § 20-116(4227) provides: 'Where parties, in the course of the execution of a contract, depart from its terms and pay or receive money under such departure, before either can recover for failure to pursue the letter of the agreement, reasonable notice must be given the other of intention to rely on the exact terms of the agreement. Until such notice, the departure is a quasi new agreement.' See Few v. Automobile Financing, Inc., 101 Ga.App. 783, 115 S.E.2d 196.

In order to create such a quasi new agreement, the parties to the original agreement must mutually consent to the departure. Selman v. Manis, 100 Ga.App. 422, 111 S.E.2d 747. The provisions of a written contract may be waived by acts or conduct which justify the other party to believe the express provisions are waived, and even a contractual provision against waiver may be waived by conduct. Commercial Cas. Ins. Co. v. Campbell, 54 Ga.App. 530, 188 S.E. 362. Thus, the question of whether the conduct of the parties causes a waiver of contract provisions, and a quasi new agreement effected, ordinarily, is a question of fact for a jury. Ward v. Watkins, 219 Ga. 629, 135 S.E.2d 421; McLarty v. Verner, 213 Ga. 472, 99 S.E.2d 890.

The evidence in this case reflects that Crawford made numerous late payments. She admitted that she was required to pay penalty payments as late charges. Furthermore, when she received the notification of default, she obtained the Bank's agreement to waive default only is she brought the note to a current status....