Court Opinion

ID: 9567109
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:48:48.819271+00
Date Added: 2024-06-11T09:56:25.718434
License: Public Domain

Sognier, Judge,
dissenting.
I respectfully dissent to Division 6 of the majority opinion and would affirm the lower court’s grant of summary judgment.
At the time that Yaksh, Ranger’s parent, encountered financial difficulties, Travelers had executed numerous performance and payment bonds for Ranger for various construction jobs. C. P. Ballenger was the majority stockholder of the Yaksh/Ranger companies and was a personal indemnitor on the surety bonds written for these companies by Travelers.
Travelers, in an attempt to mitigate its potential losses on these bonds written for Ranger, arranged for Ballenger Corporation, a viable corporation whose majority stock was owned by Ballenger, to merge with Ranger, the surviving corporation to be Ranger. This was done as an alternative to litigating with Ballenger on his personal indemnity agreement to Travelers for Ranger’s loss. In addition, Ballenger agreed to put into Ranger’s account $1 million in new capital to be applied to Ranger’s debts thus reducing Traveler’s potential bond liability. The plan was to revitalize Ranger, continue it as a good bond customer, complete the construction jobs and further reduce *792Travelers’ bond liability.
Recognizing that Ranger’s balance sheet would show a large debt or contingent liability to Travelers, Travelers agreed to exchange its debt arising out of any loss on the bonds written for Ranger for an equity position in the revitalized Ranger. Travelers executed a subscription agreement and receipt pursuant thereto, which appellees contend constituted a release of any liability owed to Travelers by Ranger.
The arrangement is set forth in the Subscription Agreement of April 28, 1976 between Travelers Indemnity Company and Ranger Construction Company. The pivotal portion of the Subscription Agreement is as follows: “Travelers shall forthwith purchase and Ranger shall sell 100,000 shares of the preferred stock of Ranger with rights and preferences as set forth in Appendix A attached hereto. The consideration for said preferred stock shall be the exchange by Travelers of all of the debts from Ranger and its affiliates to Travelers which are outstanding as of the date of the aforesaid merger.” (Emphasis supplied.) The stock carried a par value of $100 per share.
On the same day a receipt for the stock was executed by Travelers as follows:
“Receipt
“In consideration of the issuance of 100,000 shares of preferred stock of Ranger Construction Company, a Georgia corporation, receipt of which is hereby acknowledged, the undersigned Travelers Indemnity Company, a Connecticut corporation does hereby exchange any and all indebtedness of Ranger Construction Company to Travelers Indemnity Company which has arisen or which may arise in the future out of the execution of bonds prior to the date of this Receipt by Travelers Indemnity Company on behalf of Ranger Construction Company.” (Emphasis supplied.) The Receipt is dated April 28, 1976.
The majority consider the documents in question “inherently ambiguous” requiring the admission of parol evidence to explain. The majority concluded that since the contract was ambiguous, it could not, as a matter of law, be considered a release and be the basis for the trial court’s grant of summary judgment. I do not agree.
The Subscription Agreement and Receipt together constitute a contract rather than a mere receipt, see Southern Bell &c. Co. v. Smith, 129 Ga. 558 (59 SE 215) (1907) and, as we stated in Warrior Constructors v. E. C. Ernst Co., 127 Ga. App. 839, 840 (195 SE2d 261) (1973), “ ‘Construction of ambiguous contracts is the duty of the court, and it is only after application thereto of the pertinent rules of construction, and they remain ambiguous, that extrinsic evidence is *793admissible to explain the ambiguity.’ Davis v. United Am. Life Ins. Co., 215 Ga. 521 (2) (111 SE2d 488). Tt does not follow that merely because there are two possible interpretations which, might be employed in construing a contract the matter automatically becomes a question for the jury. If that were true the court would rarely, if ever, construe a contract as Code § 20-701 declares its duty to be. The role and function of a court is higher than that of a mere referee.’ Farm Supply Co. of Albany v. Cook, 116 Ga. App. 814, 816 (159 SE2d 128).
“The sole question here is one of law — the construction of the release clause. It either includes the claim alleged in the subcontractor’s petition or it does not and the answer to this question must come from the court not a jury.” Warrior Constructors, supra.
I see no ambiguity in the instruments under scrutiny here. The language used is clear and unambiguous. The only difference between the two writings appears in the words italicized. The Receipt specifically extends the Subscription Agreement to cover indebtedness arising in the future out of the execution of the bonds. This is a specific modification of the Subscription Agreement enlarging its terms. The two instruments do not conflict, nor is their meaning obscure. Where instruments are executed at the same time in the course of the same transaction, they should be read and construed together. Hardin v. Great Northern Nekoosa, 237 Ga. 594, 597 (229 SE2d 371) (1976). It is for the court to decide the legal effect of these documents. Warriors Constructors, supra. While normally a mere receipt may be explained by parol, if it embodies a contract between the parties and the stipulations therein are sufficiently set forth, then such paper is subject to the same rules as govern ordinary contracts in writing and parol evidence is not admissible to contradict or vary the terms or stipulations. Sou. Bell &c. Co. v. Smith, supra.
Having determined that the documents in question constitute a contract, unambiguous in nature, we next must determine their effect in the context of the instant case. Pullen contends that the arrangement between Travelers and Ranger, as evidenced by the Subscription Agreement and Receipt, constitutes a release of Ranger from the bond indebtedness and thus as a joint tortfeasor Pullen is likewise released. While neither instrument uses the term release, the use of the word release is not necessary in an instrument for the instrument to constitute a release. See Donaldson v. Carmichael, 102 Ga. 40 (29 SE 135) (1897). To determine whether or not the instruments effect the purpose contended by Pullen, we must examine the relationship between Ranger and Travelers.
The indebtedness due Travelers by Ranger arose out of the bonds, contractual relationships whereupon the default of the principal (Ranger) and indemnification by the surety (Travelers) *794created a debt to the surety. The record discloses that Pullen was furnished information, including cost and profit estimates, which went into the financial statements alleged to have been relied upon by Travelers in issuing the bond to Ranger. Pullen was given this information by Yaksh’s (Ranger) internal certified public accountant and such records were prepared under the direct supervision of Yaksh’s internal accountant. Also, we find that the cost and profit estimates obtained from the officers of Yaksh (Ranger) by Pullen were confirmed by signed statements from these officers to the effect that the cost and profit estimates were the company’s best estimates of such future costs and profits. Therefore, if Pullen’s statements of Ranger’s financial condition were misleading and induced Travelers to execute the bonds for Ranger, we find that any negligence or fraud must also be attributed to Yaksh (Ranger) and made the principal Ranger a joint tortfeasor with Pullen.
While one of Ranger’s obligations arose out of a contract default, Ranger was also subject to a (tortious) action in fraud by Travelers in inducing them to write the bond based on false information. As was stated in Cline v. Aetna Cas. &c. Co., 137 Ga. App. 76 (223 SE2d 14) (1975), “[i]nasmuch as the actions of the three defendants combined to produce a single indivisible injury (i.e., loss of workmen’s compensation benefits) to claimant, and inasmuch as the resulting damages cannot be apportioned rationally among the defendants, the defendants must be considered joint tortfeasors.” Can it be said in any way that Travelers, while releasing Ranger from its contractual obligation arising out of the bond, nevertheless, preserved a tort claim against Ranger? One can recover damages but once and, while one may pursue inconsistent remedies in contract and in tort, he cannot pursue these inconsistent remedies after satisfaction of one or the other by the receipt of damages. See generally in this regard UIV Corp. v. Oswald, 139 Ga. App. 697 (229 SE2d 512) (1976).
The instruments in question use the word “exchange” of all the debts from Ranger to Travelers for the stock. Webster’s defines “exchange”: “To part with, give, or transfer to another in consideration of something received as an equivalent, to barter, swap.” In essence Travelers has swapped and transferred all indebtedness, past and future arising from their execution of Ranger’s bonds, to Ranger in exchange for $10 million of preferred stock. If a debt or indebtedness is transferred to the debtor, the debt is extinguished. What can this be but a settlement of all these bond claims due Travelers from Ranger? If the debt (claim) has been extinguished (released) as between Ranger and Travelers, then can Travelers contend it has not released Ranger? I think not. It is well settled in Georgia that a release executed in favor of one joint *795tortfeasor, in full settlement of damages acts as a release in favor of all other joint tortfeasors. Parol evidence is not admissible to vary or alter the terms of the release, i.e., to show the releasor’s intent to retain certain of its claims against the other alleged tortfeasors. Maxey v. Hospital Auth., 245 Ga. 480 (265 SE2d 779) (1980); Zimmerman’s, Inc. v. McDonough &c. Co., 240 Ga. 317 (240 SE2d 864) (1977); Pennsylvania Cas. Co. v. Thompson, 130 Ga. 766 (61 SE 829) (1908).
I would affirm the grant of summary judgment in favor of Pullen.
I am authorized to state that Presiding Judge Deen, Judge Carley and Judge Pope concur in this dissent.