Sapp v. ABC Credit & Inv. Co.

• Decision Date: 15 February 1979
• Docket Number: No. 34306,34306
• Citation: 253 S.E.2d 82,243 Ga. 151
• Court: Georgia Supreme Court
• Parties: SAPP v. ABC CREDIT & INVESTMENT COMPANY et al.

Page 82

253 S.E.2d 82

243 Ga. 151

SAPP v. ABC CREDIT & INVESTMENT COMPANY et al.

No. 34306.

Supreme Court of Georgia.

Argued Jan. 8, 1979.

Decided Feb. 15, 1979.

Melinda P. Agee, Columbus, L. Lyn O'Berry, Douglasville, for appellant.

Gershon, Rudin, Pindar & Olim, Jay E. Loeb, Atlanta, for appellees.

BOWLES, Justice.

This case is here on direct appeal from an order of the Superior Court of Meriwether County which granted appellee's motion for summary judgment on nine counts of appellant's eleven count amended complaint and granted appellee's motion for partial summary judgment on one of its counterclaims.

Appellant, Irma Jean Sapp, filed an equitable petition in the Superior Court of Meriwether County against appellee, ABC Credit and Investment Company, hereinafter ABC, seeking to enjoin the foreclosure sale of property on which she lived. Appellant was either the principal obligor or a co-signer on several notes evidencing loans made by Greenville Credit. ¹ Another Greenville Credit note was executed by one of appellant's daughters alone. Appellant contends that all of the Greenville Credit loans were void because of violations of the Georgia Industrial Loan Act including the making of one loan after the ILA Commissioner had revoked Greenville Credit's license. Appellant asserts that these loans were consolidated in a loan from ABC, which appellant contends is essentially the same entity as Greenville Credit. It is the note and security deed of ABC's loan from which appellant seeks relief.

Appellant's eleven count amended complaint requested injunctive and declaratory relief as to the note and security deed, cancellation of the note and security deed for fraud, usury, lack of and illegal consideration, a constructive trust on monies wrongfully disbursed to Greenville Credit, damages for fraud, and rescission and damages under the Federal Truth-In-Lending Act. Appellee ABC, filed an answer denying appellant's allegations and two counterclaims for unpaid principal still due. One counterclaim requested judgment for $7,138.88 plus 15 per cent attorney's fees waiving claim to interest from date of default. The other counterclaim requested judgment for $5,851.58 actual damages, reasonable attorney's fee and $15,000 punitive damages for deceit.

After depositions were taken and an affidavit filed by appellant, summary judgment was granted against appellant on all counts of her amended complaint except those counts seeking relief under the Truth-In-Lending Act. ABC was awarded $7,138.88 for unpaid principal on its counterclaim.

We affirm the grant of summary judgment dismissing counts 3 and 10 of appellant's amended complaint and dismissing her requests for declaratory relief. We reverse the grant of summary judgment dismissing counts 1, 2, 6, 7, 8, 9, 11 and dismissing appellant's claims for equitable relief.

1. We must first deal with ABC's contention in its brief that appellate jurisdiction is inappropriate at this time. It argues that since the trial court's order granted partial summary judgment as to just one of ABC's counterclaims and summary judgment as to less than all of appellant's claims, the case is still pending below and that any appeal should have been according to Code Ann. § 6-701-(a)-2. Culwell v. Lomas & Nettleton Co., 242 Ga. 242, 248 S.E.2d 641 (1978), makes it clear that Code Ann. § 81A-156(h) gives a losing party the right to a direct appeal from an order granting summary judgment on any issue even though the judgment is not final (as when it disposes of fewer than all the claims). This is also true where the appeal is from a grant of partial summary judgment. Marietta Yamaha, Inc. v. Thomas, 237 Ga. 840, 229 S.E.2d 753 (1976). Consequently, appellant's appeal is properly before this court at this time and the merits of her case will be examined.

2. Appellant first contends that the trial court erred in finding that the loan in issue was made pursuant to Code Ann. § 57-116 and not subject to Code Ann. § 57-201 et seq., The Secondary Security Deed Act, hereinafter the SSDA. The significance of this point is that if the loan is usurious, only interest would be forfeited under Code Ann. § 57-116. If the loan is subject to the SSDA, both principal and interest could be forfeited if the loan were found usurious. Code Ann. § 57-203(a)(i).

A loan is within the ambit of the SSDA if it is: ". . . a loan secured in whole or in part by a security deed, mortgage, or other security instrument, other than a first security deed, first mortgage or other security instrument, on residential real estate improved by the construction thereon of housing consisting of four or less family dwelling units, executed by an individual or individuals . . . ." Code Ann. § 57-201.

The evidence which appears in the record shows that one of the purposes of the loan in issue was to supply money to pay off a note to Greenville Credit, which note was secured by a deed to secure debt. It is undisputed that the money was applied to that purpose. We conclude that this was done in a simultaneous transaction. See Division 3 of this opinion.

"A security deed, although conveying the legal title, does so for the purpose of security only, and, upon the satisfaction of the obligation which it is given to secure, is automatically extinguished in effect and can be canceled of record without any reconveyance by the grantee in accordance with the provisions of the Code, § 67-1306." Hennessy v. Woodruff, 210 Ga. 742, 82 S.E.2d 859 (1954). This being the case, and the obligation underlying the deed to secure debt being satisfied, there was no prior security deed to which the security deed in issue could be secondary. Since the instrument in question was a first security deed, it is not subject to the SSDA.

The trial court correctly determined that the subject loan was made pursuant to Code Ann. § 57-116. Therefore, if the note is usurious, only interest would be forfeited and the principal would still be due unless the note, for other reasons, was subject to and violated the Georgia Industrial Loan Act.

3. Appellant next contends that the trial court erred in finding no issues of material fact and in denying any basis of relief in her claims that the earlier instruments were void, illegal and unenforceable (Counts 7-11 of her amended complaint). The gist of her argument is that if ABC and Greenville Credit are one and the same entity, the note evidencing the loan made by ABC was in fact a Renewal or consolidation of the earlier notes by Greenville Credit. If this note was a renewal and the prior notes were void because they violated the Georgia Industrial Loan Act, then, she contends, the renewal note would also be void and unenforceable under the rule in Douglas v. Dixie Finance Corp., 139 Ga.App. 251, 228 S.E.2d 144 (1976). Thus it is apparent that a key issue in this contention is that of the corporate distinctiveness of ABC and Greenville Credit. We hold that the trial court erred in finding as a matter of law that the corporations were distinct.

On a motion for summary judgment, the pleadings of the opposing party must be taken as true, unless by the admissions, depositions or other material introduced it appears beyond controversy otherwise. There is a duty on the party opposing a motion for summary judgment to present relevant evidence in rebuttal of the movant's evidence but there is no duty upon an opposite party to produce evidence unless the movant successfully pierces the allegations of the petition by competent evidence to show that no fact issue exists. Bagley v. Firestone Tire & Rubber Co., 104 Ga.App. 736, 123 S.E.2d 179 (1961). ABC, the movant, did not pierce the allegations of appellant's petition.

In the case at bar, appellant affirmatively alleged that the two corporations were in fact one. Although appellee denied this in its answer it produced no competent evidence sufficient to pierce the allegations. The only testimony touching on the matter came from ABC's employee who Stated that there were two corporations but then went on to say that Greenville Credit owned all the stock and assets of ABC and that Greenville Credit's accounts were being collected in the name of ABC as well as in the name of Greenville Credit. The evidence also showed that when appellant received her check from ABC's employee to pay off the prior loans to Greenville Credit, she endorsed it on the spot and handed it back to the same employee. The other endorsements on the check are a stamp by Greenville Credit and a stamp by ABC "For Deposit Only." Thus the check written by ABC was returned to ABC without leaving its office.

ABC had it within its power to come forward with facts to show that these corporations were separate and distinct and did not do so. Furthermore, ABC refused to furnish a list of its stockholders in its answer to appellant's interrogatories.

These facts present an issue for a jury determination. A jury must decide if the two corporations are in fact one or if Greenville Credit used ABC as its instrument to perpetrate a fraud on appellant. The jury must decide whether or not a "renewal" note is involved in this case and thus will determine if a legal consideration was received by appellant in return for the execution of the subject note.

As there were issues of fact to be determined in conjunction with counts 7, 8, 9 and 11 of appellant's amended complaint the trial court erred in granting summary judgment against appellant as to those counts. Dunbar v. Green, 229 Ga. 829, 194 S.E.2d 435 (1972); Bagley v. Firestone Tire & Rubber Co., supra.

In her count 10, appellant asserted that she did not assent to the terms of the note and security agreement, that they are harsh and one-sided, and that they should be canceled to prevent oppression and unfair surprise. The record shows that the terms of the documents are common and that appellant had prior experience in signing such documents. Appellant...