Robinson v. Reynolds

• Decision Date: 18 June 1942
• Docket Number: 14127.
• Citation: Robinson v. Reynolds, 194 Ga. 324, 21 S.E.2d 214 (Ga. 1942)
• Parties: ROBINSON v. REYNOLDS.
• Court: Georgia Supreme Court

21 S.E.2d 214

194 Ga. 324

ROBINSON v. REYNOLDS.

No. 14127.

Supreme Court of Georgia

June 18, 1942

Rehearing Denied July 16, 1942.

Answer to Certified Question Conformed to Oct. 1, 1942.

See 22 S.E.2d 179.

The Court of Appeals certified to this court the following question: 'A debtor owed his creditor $2319.09 the balance due on the purchase-price of land lot No. 171 in the 14th district of Seminole County, Georgia. Both signed an application for a loan from the Federal Land Bank of Columbia, to enable the debt to be paid. The bank agreed to make a loan for $2200, which was insufficient to pay the debt and the expenses of the loan. To induce the creditor to agree to the loan, the debtor agreed to execute a new note for the balance of his debt after the payment to the creditor of the net proceeds of the loan, the new note to be secured by a bill of sale to certain personal property of the debtor and by a second security deed to the above-described land. The creditor's consent to the loan was further induced by the statement of the lawyer who prepared the loan application that, in his opinion, if the creditor informed the bank that he was not accepting the net amount of the loan in full settlement of the debt, he would not be prevented from thereafter collecting the balance thereof. Subsequently the creditor and debtor signed 'a creditor's agreement' and sent it to the bank, together with the following letter from the lawyer: 'We also call your attention to the fact that the lien-holder will not accept the amount of the commitment, but the applicant [debtor] expects to raise the difference from another source.' Upon receipt of said agreement and letter, the bank made a loan of $2200. After deducting the expenses of the loan, the net proceeds amounted to $1914.50. The bank sent a draft for that amount payable to the debtor and the creditor, and the debtor indorsed the draft over to the creditor. The draft recited on its face that 'this amount is accepted in full settlement of the indebtedness represented by a certain security deed against a lot of land No. 171 in the 14th district of Seminole County, Georgia.' The debtor executed his new note, bill of sale, and the second security deed after he had indorsed over the draft, but these papers were delivered to the creditor at the same time that he received and accepted the draft. The only indebtedness listed in the creditor's agreement was the sum of $2313.09 owed by the debtor to the creditor as the unpaid balance on the purchase-price of the land in question.

In that agreement it is recited as follows: 'The undersigned has agreed and does hereby agree to accept in full and complete settlement in payment of all indebtedness and obligations of and claims and liens against applicant and property offered by applicant as security for a loan, in favor of, owned, or held by the undersigned, of any kind or nature, whether secured or unsecured, liquidated or unliquidated, whether or not scheduled above, and whether or not the same be now due and payable, the sum of $2313.09. Upon receipt of said amount applicant will not be indebted to or owe to the undersigned any sum or thing whatsoever, and the undersigned will mark paid, cancel, and satisfy all instruments, papers, and records representing, evidencing, and securing any and all indebtedness and obligations of and claims and liens against applicant and property offered by applicant as security for a loan in favor of or owned or held by the undersigned. * * * Any claim, lien indebtedness, or obligation omitted from the foregoing schedule, or inaccurately described therein, is covered by and included in the terms of this agreement. There is no understanding or agreement that the undersigned, or any one whomsoever, is to be paid an additional amount upon the indebtedness, claims, liens, and...