Turpin v. North Am. Acceptance Corp., 44277

• Decision Date: 17 February 1969
• Docket Number: No. 44277,No. 2,44277,2
• Citation: 166 S.E.2d 588,119 Ga.App. 212
• Parties: Willie B. TURPIN v. NORTH AMERICAN ACCEPTANCE CORPORATION
• Court: Georgia Court of Appeals

Page 588

166 S.E.2d 588

119 Ga.App. 212

Willie B. TURPIN v. NORTH AMERICAN ACCEPTANCE CORPORATION.

No. 44277.

Court of Appeals of Georgia, Division No. 2.

Feb. 17, 1969.

Syllabus by the Court

1. An agreement on the part of a creditor to withhold proceeding with a foreclosure of a security deed and to allow the debtor additional time in which to pay arrearages on the debt, unless supported by some new consideration, is a nudum pactum and unenforceable. Failure to observe an agreement by which one is not bound and which is unenforceable does not amount to fraud.

2. The judgment in a dispossessory proceeding brought by the grantee in a security deed who had purchased the property at the foreclosure sale against the grantor is res judicata as to all issues which might have been made in that proceeding, including the matter of whether there had been a valid exercise of the power of sale.

First Federal Savings & Loan Association of Atlanta held a security deed on the house and lot of Willie Belle Turpin, and North American Acceptance Corporation held a second security deed on it. She was injured in an automobile accident in November, 1960, and because of her injuries was unable to work for some time. She became in arrears with her payments, both to First Federal and North American, and North American threatened to foreclose. She went to its office in December, 1960, told them of her accident and consequent inability to make payments, asked for some time and promised to catch up the payments in February or March, 1961, and asserted that if required she would pay 5 percent interest on the arrearages until they were caught up. She testified that the manager of North American agreed to grant her the additional time and she thought that all would be well.

However, North American purchased the First Federal obligation and after advertisement during January, 1961, proceeded to foreclose the second security deed on the first Tuesday in February.

The foreclosure did not come to Mrs. Turpin's attention (though she admitted that she had received a notice that it would be done) until in June, 1962, and in the meantime she made payments both to North American and First Federal and paid insurance premiums on the house. When she learned in June, 1962, that the foreclosure had taken place she refrained from making any further payment on either obligation, but remained in possession.

A dispossessory proceeding was filed against Mrs. Turpin in December, 1962, to which she filed counteraffidavit and bond, and upon the trial a judgment resulted in favor of North American.

On February 18, 1963, she filed suit against North American, alleging that it had wilfully concealed the fact of foreclosure and had thus defrauded her in that she had made payments on both the first and second mortgages when she no longer owned the property. She alleged that the assurance made to her in December by North American's manager that she would be allowed to catch up the arrearages and that the property would not be foreclosed upon was knowingly false when made and was made for the purpose of defrauding her, that she had acted upon it and had been defrauded. She charged that these acts of North American were 'tortuous conduct' within the purview and scope of Code § 105-2003 (providing for the recovery of vindicative damages) and sought recovery of $25,000.

Upon trial of the case a verdict was directed for the defendant and plaintiff appeals, enumerating as error the direction of the verdict.

William T. Brooks, Atlanta, for appellant.

Arnall, Golden & Gregory, H. Fred Gober, Atlanta, for appellee.

EBERHARDT, Judge.

The only enumeration of error is as to the direction of the verdict. Hence the only question for determination is whether, under the pleadings and the evidence, plaintiff was entitled to recover under any theory.

1. Conceding that the manager of North American promised plaintiff in December, 1960, that she would be afforded time in which to bring her payments to a current condition and that the contemplated foreclosure would be held up pending her doing so, we do not find the necessary elements of certainty (as to when the arrearages would be paid), mutuality (plaintiff was bound to do no more than she was already bound by law to do), or consideration (plaintiff neither gave nor received any new consideration for the alleged promise) which constitute a valid agreement for an extension of time. Lee v. Wilmington Savings Bank, 31 Ga.App. 327(1), 120 S.E. 689. The promise to extend the time for payment of the arrearages, as well as that to forbear foreclosure of the security deed were mere naked ones, unenforceable in any court of law. Bennett v. Williams, 54 Ga. 525; Cox v. Henry, 172 Ga. 609, 158 S.E. 296; Byrd v. Equitable Life Assur. Society, 185 Ga. 628, 635, 196 S.E. 63; Holmes v. First National Bank of Arcadia, Florida, 19 Ga.App. 810(2), 92 S.E. 298; Jones v. Lawman, 56 Ga.App. 764, 772, 194 S.E. 416; Quillian v. Mabry, 88 Ga.App. 817, 818, 78 S.E.2d 97. Cf. Druid Hills v. Doughman, 171 Ga. 521, 156 S.E. 229; Holliday & Co. v. Poole, 77 Ga. 159(2); Bush & Bro. v. Rawlins, 89 Ga. 117, 14 S.E. 886; Davis & Company v. Morgan, 117 Ga. 504, 43 S.E. 732; Johnson v. Hinson, 188 Ga. 639(2), 4 S.E.2d 561; Jones v. Central Builders Supply Co., 217 Ga. 190, 195, 121 S.E.2d 633.

'(T)he action of the (creditor) in expressing her willingness to allow the (debtor) to make the payments after their due date was not inconsistent with her right to declare a forfeiture. She did not represent that her forbearance would be continued for any particular length of time, and the (debtor) in preparing the land for cultivation should have known that he might be called upon to make the payments at any time.' Cottle v. Tomlinson, 192 Ga. 704, 711, 16 S.E.2d 555.

Nor was a new consideration supplied by Mrs. Turpin's agreement to pay the arrearages (Rutledge v. Temple Banking Co., 31 Ga.App. 686(1), 121 S.E. 707) or to pay interest thereon from maturity until payment. Tatum v. Morgan, 108 Ga. 336, 33 S.E. 940; Jones v. Lawman, 56 Ga.App. 764, 772, 194 S.E. 416, supra. She was already bound by law to pay interest thereon at the legal rate, or at the contract rate if specified in the instrument. Code § 57-110. Cf. Matthews & Son v. Richards, 13 Ga.App. 412(2), 79 S.E. 227; Helton v. Taylor, 58 Ga.App. 630, 199 S.E. 580.

The mere breach of a valid, enforceable contract does not amount to fraud. Georgia Railroad & Bkg. Co. v. Kent, 92 Ga. 782, 785, 19 S.E. 720; Brooke v. Cole, 108 Ga. 251, 33 S.E. 849; Echols v. Howard, 17 Ga.App. 49, 86 S.E. 91; Snow's Laundry &c. Co. v. Georgia Power Co., 61 Ga.App. 402, 404, 6 S.E.2d 159. A fortiori failure to observe an agreement by which one is not bound and which is unenforceable cannot amount to fraud. 'It is contrary to common sense to reply upon a promise that is not legally binding upon the person making it.' Adamson v. Maddox, 111 Ga.App. 533, 536, 142 S.E.2d 313, 315.

The asserted representations by North American that it would forbear the foreclosure in January following and would allow plaintiff to catch up her arrearages, though false, were not as to any past or present fact. 'A false promise to perform an act in the future is not a false pretense or false representation,' and does not constitute the basis of an action for fraud. Stephens v. Milikin, 35 Ga.App. 287(2), 133 S.E. 67; Clinton v. State Farm Mutual Auto Ins. Co., 110 Ga.App. 417(1), 138 S.E.2d 687.

Further, parol evidence is not admissible to vary the terms of payment or the date of maturity of a promissory note, or to engraft upon the note a provision for the extension of time. Crooker v. Hamilton, 3 Ga.App. 190(3), 59 S.E. 722.

Mrs. Turpin asserts that North American concealed the fact of the foreclosure from her and did so for the purpose of defrauding her in the collection of further payments on the obligations after the foreclosure, but this is not sustained. She admits having received from North American notice that the foreclosure would take place. The foreclosure deed, which is in the record, recites that the sale was made after advertising the time, place and items in the...