Case Title: Boland v. Fort Rucker Nat. Bank

Citation: 599 So. 2d 595

Docket Number: 1910091

State: alabama

Court: Alabama Supreme Court

Date: 1992-05-22T00:00:00Z

Document:
599 So. 2d 595 (1992)
Charles J. BOLAND
v.
FORT RUCKER NATIONAL BANK.
1910091.

Supreme Court of Alabama.
May 22, 1992.
Richard W. Whitaker of Pittman, Whitaker & Pittman, Enterprise, for appellant.
*596 Kenneth W. Quattlebaum of Brogden & Quattlebaum, Ozark, for appellee.
SHORES, Justice.
James A. Cassell owned a house and lot in Coffee County, on which Army Aviation Center Federal Credit Union ("Credit Union") held a first mortgage. Cassell listed his house for sale with Charles J. Boland, a realtor/broker. J. Douglas Faulk signed a contract to buy the house for $189,000. The sale was not closed on the day fixed by the contract, but was delayed. Cassell went to Fort Rucker National Bank ("FRNB") and borrowed about $6,000 for living expenses pending the sale of his house. This loan was unsecured, but Cassell promised the bank in his loan application that the loan would be repaid when his house was sold. Approximately two months later, Cassell again went to the bank to borrow money for living expenses. This time, the bank insisted upon a second mortgage on Cassell's house and required a guarantor on Cassell's note. Cassell gave FRNB a second mortgage on his residence, junior to the pre-existing mortgage to the Credit Union. Cassell then signed a promisory note, dated January 5, 1989, in the amount of $18,037, secured by the second mortgage. Charles J. Boland executed the promissory note as cosigner and guarantor with Cassell.
On July 6, 1989, Boland executed another promissory note as cosignor and guarantor with Cassell; this note renewed the note of January 5, 1989. The note was renewed again on March 2, 1990, and Boland again signed the note as cosigner and guarantor; Cassell never signed that note. It is undisputed that Boland signed all three notes in question as cosigner and guarantor.
The purpose of the loan was to provide living expenses for Cassell until the loan closing on his house. The benefit Boland expected to receive was his commission from the sale of Cassell's house.
Cassell defaulted on the note and filed a petition for relief in the bankruptcy court in April 1990. FRNB then sued Boland, as cosigner and guarantor of the note. Boland answered, denying that he was indebted to FRNB, and he counterclaimed against FRNB, alleging negligence, wantonness, and fraud on the part of FRNB. He alleged that FRNB had represented to him that for payment it would look to the real estate securing the loan and would not hold him liable on the note.
FRNB filed a motion for summary judgment on its complaint and on Boland's counterclaim. The trial court granted the motion, and Boland appealed from the resulting judgment. We affirm.
Boland testified in deposition that Hilda Davis from FRNB asked him to cosign Cassell's note because Cassell had no job. Boland testified as follows:
In bold print, above his signature on all three notes, the contract stated:
On the reverse side of the promissory note above Boland's signature is the following:
On the reverse side of each promissory note, above and to the left of Boland's signature, is the following provision:
In its order entering the summary judgment in favor of the bank, the trial court stated:
Pursuant to Rule 56, A.R.Civ.P., the standard of review is whether there was any genuine issue of material fact and, if not, whether FRNB was entitled to a judgment as a matter of law. In determining whether there was a genuine issue of material fact, the appellate court is limited to reviewing the factors and the evidence considered by the trial court when it entered the summary judgment. Purvis v. PPG Industries, Inc., 502 So. 2d 714, 716 (Ala.1987). After a party moving for a summary judgment has made a prima facie showing that there is no genuine issue of material fact, the burden shifts to the other party to show that there exists a genuine issue of material fact. Perry v. Mobile County, 533 So. 2d 602, 604 (Ala.1988).
Thus, the sole issue in this case is whether, based on the facts before the trial court when it granted the summary judgment motion, there was a genuine issue of material fact and, if there was not, whether FRNB was entitled to a judgment as a matter of law.
Boland claims that the summary judgment was improper, because, he claims, FRNB used fraud or misrepresentation to induce Boland's execution of the note. Boland contends that FRNB represented to him that the real estate would stand as security and that Boland would never have to pay the debt. Boland argues that the question of whether his reliance was justified is a question for the jury.
*599 In Hickox v. Stover, 551 So. 2d 259, 263 (Ala.1989), this Court adopted the "justifiable reliance" standard:
Boland was not justified in relying upon the alleged misrepresentation of FRNB. The alleged misrepresentation was that the real estate would secure the payment of the loan and that FRNB would not hold Boland responsible.
Boland obtained his broker's license in 1971 and has been in real estate sales since then. He has operated Boland Real Estate, as a sole proprietorship, since he obtained his license. When the loan was made on January 5, Boland was in a business relationship with Cassell: Boland had Cassell's house listed for sale. Boland had previously borrowed money from various financial institutions, and he had signed promissory notes and mortgages; he was familiar with mortgages and the purpose of mortgages. Boland cosigned and guaranteed the payment of the note, with the knowledge that the other signer, Cassell, had no job and that FRNB was looking to Boland because he had income. FRNB required Boland to provide it with copies of his income tax returns as evidence of his income. Furthermore, the terms of the contract were conspicuously printed on the face of the document; in fact, they were only a glance away from the signature line.
Assuming that the alleged misrepresentation was made by FRNB's employee, we conclude that Boland "must have closed his eyes to avoid the discovery of the truth," because the alleged misrepresentation was so contradictory to the terms and provisions of the note that a person with Boland's education and experience should have known the truth. Boland was not justified in relying on the alleged misrepresentation made by FRNB. The summary judgment in favor of FRNB is due to be affirmed.
AFFIRMED.
HORNSBY, C.J., and MADDOX, HOUSTON and KENNEDY, JJ., concur.