Strickland v. Foundation Life Ins. Co., 48325

• Decision Date: 12 September 1973
• Docket Number: No. 48325,No. 2,48325,2
• Citation: 129 Ga.App. 614,200 S.E.2d 306
• Parties: Eustace T. STRICKLAND et al. v. FOUNDATION LIFE INSURANCE COMPANY
• Court: Georgia Court of Appeals

Page 306

200 S.E.2d 306

129 Ga.App. 614

Eustace T. STRICKLAND et al. v. FOUNDATION LIFE INSURANCE COMPANY.

No. 48325.

Court of Appeals of Georgia, Division No. 2.

Sept. 12, 1973.

William P. Smith, III, Decatur, for appellants.

Heyman & Sizemore, George H. Myshrall, Jr., Atlanta, for appellee.

Syllabus Opinion by the Court

HALL, Presiding Judge.

Defendants Strickland and Schultz owned at least the majority of shares of Piedmont-Tenth Finance Company, which on July 19, 1968, executed a senior subordinated note payable to Foundation Life Insurance Co. in exchange for a $20,000 loan. Contemporaneously therewith, Strickland and Schultz executed a personal guaranty of the loan. The note bears the heading 'Atlanta, Ga.' The guaranty is headed 'State of Georgia County of Fulton.' Some time later, Schultz moved to Florida. Following default on the note and failure by the guarantors to pay, Foundation brought suit against them in DeKalb County, Georgia, where service was properly perfected in the county upon Strickland and personal service was made upon Schultz in Florida pursuant to the provisions of the Georgia Long Arm Statute, Code Ann. § 24-113.1(a). In his answer and throughout proceedings below, Schultz maintained that he was not subject to the jurisdiction of the Georgia courts because he was a Florida resident and he had done nothing to subject himself to Long Arm Jurisdiction.

At trial, Schultz did not personally appear, and following plaintiff's presentation and Strickland's defense, Schultz's attorney moved for a directed verdict on the jurisdiction point. This motion was denied, and the judge directed a verdict for plaintiff on the issue of liability of both defendants, subject only to jury consideration of certain claimed set-offs.

Both defendants appeal, raising two arguments: first, that the lower court erred in refusing a directed verdict for Schultz on the jurisdiction point; and secondly that certain documentary evidence was improperly admitted.

1. Concerning the jurisdiction point, Schultz argues that nothing in the record shows where the guaranty agreement was executed, and therefore there is no evidence that he transacted any business in Georgia rendering the Long Arm Statute applicable. We think this contention is answered by the headings noted above on the two documents, and by the additional fact that there is no other evidence of any kind in the record tending to show where execution of the agreements took place. In the absence of evidence to the contrary, the inference is authorized that the place of execution of a document is the place identified in the heading. Lee v. Moseley, 40 Ga.App. 371(1), 149 S.E. 808. We must infer that these contracts were executed in Georgia, and additionally we will infer in the absence of evidence to the contrary that they were delivered in Georgia. See Lee v. Moseley, supra. Moreover the evidence showed that the guaranty secured a loan to a Georgia business enterprise; it was executed by two Georgia residents; and it contemplated payment at the principal office of the lender which was stated in the note to be in Atlanta, Georgia. Therefore, we do not have been the question we sometimes have of whether the transaction had sufficient minimum contacts with the State of Georgia to justify this state's exercise of jurisdiction. Indeed, the record fails to show that any state other than Georgia had any significant contacts with this transaction.

For these reasons, the law of Georgia applies to the construction of these contracts, even though the contracts themselves contain no specific provision to that effect. See McKie v. McKie, 213 Ga. 582, 100 S.E.2d 580; Gunn v. A. L. Wilson Co., 20 Ga.App. 14, 92 S.E. 721.

Viewed in the light of our comments above, this case is entirely controlled by the recent decision of the Georgia Supreme Court in Davis Metals, Inc. v. Allen, 230 Ga. 623, 198 S.E.2d 285, and exercise of the Georgia Long Arm Statute was proper.

In Davis Metals, the facts showed that a Georgia resident had executed in Georgia an employment contract containing a noncompetition clause, which itself provided that the law of Georgia applied; and that after some work done under the contract, the employee quit, moved to Alabama, and began competing, thereby breaching the contract. Suit against him was begun in a Georgia court and in personam jurisdiction over him was obtained under the Long Arm Statute. The court decided that the cause of action alleged against the nonresident arose from his transaction of business within the state, and therefore that the Long Arm Statute applied because 'the competition by the appellee in Alabama in and of itself would not give rise to a cause of action in favor of the appellant. If there was no contract in existence between the parties, then the appellee would be completely free to compete with the appellant in Alabama and anywhere else. The act that gives birth to a cause of action because of the competition carried on in Alabama is the contract entered into by the parties in the State of Georgia.' (Emphasis supplied.) Davis Metals v. Allen, 230 Ga. 623, 625, 198 S.E.2d 285, 287, supra.

Here, the act giving rise to plaintiff's cause of action against defendants for non-payment of the loan was defendants' execution of the Georgia guaranty contract....