S. & S. Builders, Inc. v. Equitable Inv. Corp., 22145

• Decision Date: 14 January 1964
• Docket Number: No. 22145,22145
• Citation: 219 Ga. 557,134 S.E.2d 777
• Court: Georgia Supreme Court
• Parties: S. & S. BUILDERS, INC. v. EQUITABLE INVESTMENT CORPORATION.

Page 777

134 S.E.2d 777

219 Ga. 557

S. & S. BUILDERS, INC. v. EQUITABLE INVESTMENT CORPORATION.

No. 22145.

Supreme Court of Georgia.

Jan. 14, 1964.

Syllabus by the Court

1. The allegations of the petition, as amended, clearly establish that the oral construction loan agreement was one of three provisions of a single verbal agreement, the other two of which were later reduced to writing.

2. The oral construction loan agreement, a privision or part of an oral agreement, which was later reduced to writing, merged into the valid, complete, and unambiguous written contract, and is not subject to pleading and proof.

3. a. Where, as here, the consideration for the $150,000 note and agreement, was so stated therein as to make it one of its terms and conditions, and consists of mutual promises expressed in the contract, a different consideration, whether variant or additional, can not be shown by parol.

b. The allegations that the defendant has performed none of the services which are the consideration are insufficient to show a failure of consideration or that the note is usurious because by the terms of the contract defendant was only required to furnish the services upon request and there is no allegation that the defendant has refused to furnish any services requested.

4. Allegations that defendant fraudulently induced plaintiff to sign the written agreement by promising to later reduce the oral agreement as to construction loans to writing are insufficient to authorize an action for fraud, as 'fraud can not be predicated upon statements which are promissory in their nature as to future acts.'

5. Parol evidence of the alleged verbal agreement to make construction loans is not admissible to prove same, where as here, the written agreement is valid, complete and unambiguous.

6. The trial court properly sustained the general demurrer and dismissed the petition.

The exception is to a judgment sustaining general demurrers and a motion to dismiss to a petition brought by S. & S. Builders, Inc., against Equitable Investment Corporation, seeking to have declared null and void and canceled a note for $150,000 and an agreement which is a part thereof, and to recover damages resulting from the alleged breach of a contract wherein defendant agreed to make available to plaintiff construction loans, and for temporary and permanent injunction against transferring plaintiff's notes.

The petition alleges that after negotiations by telephone, plaintiff and defendant, acting through named officials, agreed that the vice-president of defendant would come to Columbus, Ga., and enter into a contract with plaintiff concerning lending of money by defendant to plaintiff and development of real estate owned by plaintiff; that pursuant to that agreement the vice-president of defendant came to Columbus, and on behalf of defendant entered into a verbal agreement with plaintiff to do three things: (1) that defendant would lend $350,000 to plaintiff and would advance an additional $100,000 for development of lots and plaintiff would give a note and security for the same on described property on described terms; (2) that defendant would make available to plaintiff construction loans for construction of as many as 100 houses per year, so long as not more than 50 were unsold, in the amount of 75 percent of the appraised value of the completed houses as fixed by the VA or FHA, for as long as 9 months, with allowable extensions of 90 days, at 6 percent interest, and that defendant would release from the security deed each lot upon payment of $1,200; (3) that plaintiff would give defendant a note for $150,000 on terms set out in the note and an agreement made a part of the note; that on June 8, 1961 the president of plaintiff went to Columbus, Ohio, and with defendant agreed on the execution of necessary described papers for implementation of their oral agreement; that pursuant thereto, they met in Columbus, Ga., on June 14, 1961 and the papers for the $350,000 loan and $150,000 transaction were presented to plaintiff for execution but not the construction loan papers; that when asked about the construction loan papers, defendant assured plaintiff that the plaintiff would receive all the construction money it would need to carry out the development plans and that this construction loan agreement was a separate and distinct agreement from the $350,000 and $150,000 transactions; that defendant wished it that way because defendant might want to sell those notes; and, upon assurance that the construction loan agreement would be executed at a later date, and relying on that assurance and as an inducement therefor, plaintiff signed the notes and other writings connected with the $350,000 and $150,000 transactions; that defendant failed to forward to plaintiff the agreed upon construction loan agreement; that plaintiff has repeatedly called upon defendant to make available to plaintiff construction loans pursuant to their agreement but plaintiff has never received the construction loans pursuant to the agreement. Plaintiff does allege that defendant made available to plaintiff construction loans for 16 houses and follows that with an allegation that the only construction loans made available to plaintiff by defendant are limited to a line of credit of $200,000 , each loan not to exceed 60 percent of the appraised value of the respective house, with a maximum of 5 unsold houses in any one subdivision, all in violation of the construction loan agreement between plaintiff and defendant.

Willis & Carter, Grover C. Willis, Jr., William S. Cain, Columbus, for plaintiff in error.

Swift, Pease, Davidson & Chapman, W. M. Page, Columbus, for defendant in error.

MOBLEY, Justice.

1. The allegations of the petition, as amended, (summarized above) clearly show that the oral construction loan agreement was one of three provisions of a single verbal agreement, the other two of which were later reduced to writing, as the petition alleges plainly and unequivocally that the parties, after considerable negotiations, entered into a verbal agreement to do the three things enumerated and that upon the execution of the written contract, two were reduced to writing but the third was not. The stated objectives of the parties, agreed upon after considerable negotiations by telephone, was the lending of money by defendant to plaintiff for the development of property owned by plaintiff. Further negotiations led to the oral agreement to do three things, which the parties agreed were necessary to accomplish those purposes, the three things being: (1) lending of money by defendant to plaintiff for clearing the real estate of liens, (2) making of construction loans by defendant to plaintiff, and (3) furnishing consultation and expert advice in development and financing of the property. The ultimate goal of the parties was to sell houses erected by plaintiff on lots developed by him, with consulting service and advice furnished by defendant, on property owned by plaintiff to be cleared of encumbrances with money furnished by defendant. To achieve the established goal required performance by the parties of all of their obligations as fixed by the oral agreement. Thus it is clearly demonstrated that the contract was entire with one agreement covering all the terms. 'The primary criterion for determining the question [whether a contract is entire or severable] is the intention of the parties, as determined by a fair construction of the terms and provisions of the contract itself, by the subject matter to which it has reference, and by the circumstances of the particular transaction giving rise to the question.' 12 Am. Jur. § 315, p. 870. Applying that principle to the allegations of the petition, clearly the petition alleges an oral agreement to do three things, which when reduced to writing did not contain one provision about which they had negotiated and orally agreed. If the allegations, that upon the execution of the written contract the defendant assured the plaintiff that the construction loan agreement was a separate and distinct agreement and would be later reduced to writing, are considered as contradictory of the allegation that they entered an oral agreement to do three things, two of which were later reduced to writing, then construing the petition most strongly against the pleader, as must be done on general demurrer, Ed. Smith & Sons, Inc. v. Mathis, 217 Ga. 354, 355, 122 S.E.2d 97, the petition must be construed as alleging that the oral construction loan agreement was a provision or part of a verbal contract which was reduced to writing.

2. The case is controlled by the principle, known as the 'PAROL EVIDENCE RULE,' THAT A VALID, WRItten contract which is complete, and the terms of which are not ambiguous, can not be contradicted, added to, altered, or varied by parol agreements. Stonecypher v. Georgia Power Company, 183 Ga. 498, 501, 189 S.E.2d 13; see also Code §§ 20-704, 38-501; Rogers v. Atkinson, 1 Ga. 12; Brosseau v. Jacobs' Pharmacy Company, 148 Ga. 651(1), 98 S.E. 79; Thomas v. Eason, 208 Ga. 822(2), 69 S.E.2d 729. As stated in the Stonecypher case, supra, there is a line of cases in which parties have been permitted to establish and enforce oral agreements relating to and made in connection with written contracts and, therefore, it becomes necessary in cases of this sort to differentiate between the two classes of decisions. Examples of cases wherein parties have been permitted to establish the oral contract are: Brinson v. Franklin, 177 Ga. 727(1), 171 S.E. 287; Langenback v. Mays, 205 Ga. 706(1), 54 S.E.2d 401, 11 A.L.R.2d 1221. The test to determine whether the oral agreement is one which the law will permit to be plead and proved is whether the oral agreement constitutes a part of the written contract or whether, instead, it is a separate and distinct, oral contract which is not inconsistent with the written contract. If the latter, it...