Court Opinion

ID: 9608090
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:05:57.639022+00
Date Added: 2024-06-11T08:19:56.263012
License: Public Domain

McMurray, Presiding Judge,
dissenting.
I respectfully dissent, as it is my view that the affidavit of Grady T. Hassell, Jr. (defendant) is sufficient to raise genuine issues of material fact as to the defenses of impairment of collateral, release and novation.
After the First National Bank of Newton County (“the bank”) initiated this action against defendant to recover upon a promissory note that was secured by inventory and equipment owned by PCC, Inc., d/b/a Piedmont Cabinet Company (“PCC”), defendant raised the defenses of impairment of collateral, novation and release. The bank, however, failed to offer a scrap of evidence in opposition to these or any other defense. It, instead, moved for summary judgment, relying on undisputed proof that defendant executed a $50,000 promissory note in its favor on December 22, 1990, in his individual capacity as well as his capacity as president of PCC; that defendant executed the promissory note in exchange for renewal of PCC’s line of credit; that the promissory note remains unpaid even though it came due on June 22, 1991, and that the unpaid principal balance plus accrued interest on the underlying debt was $33,029.53 as of August 1, 1994. In opposition, defendant filed his own affidavit, deposing that he executed the promissory note as PCC’s guarantor; that PCC’s assets were transferred to Piedmont Woodworking, Inc., with the bank’s consent in April 1991; that the bank then seized the proceeds of the asset sale ($8,046.04) without prior notice or the consent of defend*236ant; that the bank either allowed Piedmont Woodworking to retain certain collateral (“a 1984 Chevrolet van . . .”) or otherwise took possession of this collateral without defendant’s consent; that the attorney who closed the asset sale transaction “required Defendant to sign over the UCC Financing Statement and note . . .” to the bank and that the bank informed defendant in May 1991 (before the promissory note came due) that renewal of the debt was unnecessary because Piedmont Woodworking had assumed the promissory note and (apparently) PCC’s line of credit. Defendant also deposed that he received no statements regarding credits, debits or balances under the line of credit after the sale of PCC’s assets in April 1991.
“Under OCGA § 10-7-21 a change in the terms of a contract, a ‘novation,’ without a surety’s consent, discharges him. [Further,] OCGA § 10-7-22 provides for a surety’s release based on acts by a creditor which result in either: 1) injury to the surety or 2) increasing the surety’s risk or 3) exposing the surety to greater liability. W. T. Rawleigh Co. v. Kelly, 78 Ga. App. 10, 14 (2) (50 SE2d 113) (1948).” Bank of Terrell v. Webb, 177 Ga. App. 715 (2) (341 SE2d 258). In the case sub judice, the majority holds that defendant’s affidavit does not raise genuine issues of material fact as to any of these defenses. I do not agree with this assessment.
“ ‘The party opposing the motion [summary judgment] is entitled to all favorable inferences and the benefit of every doubt, and the evidence [must be] construed most strongly in [the opposing party’s] favor. (Cit.)’ Dixieland Truck Brokers, Inc. v. Intl. Indem. Co., 210 Ga. App. 160, 163 (3) (435 SE2d 520) (1993); see, e.g., Lau’s Corp v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991).” Miller v. Rieser, 213 Ga. App. 683, 684 (446 SE2d 233). In the case sub judice, defendant’s affidavit may not be artfully drafted, but it does convey (without dispute) that PCC’s assets were transferred to Piedmont Woodworking with the bank’s consent in April 1991 and that, in executing this sales transaction, the bank’s attorney directed defendant to turn over the proceeds of the asset sale and at least one piece of the collateral, i.e., “a 1984 Chevrolet van. . . .” It is my view that this evidence alone is sufficient to raise genuine issues of material fact regarding increased risk to defendant as guarantor of the promissory note. To say otherwise ignores the reality that the bank offers no explanation as to the disposition of the collateral or application of the proceeds of the asset sale agreement.
*237Decided July 12, 1995
Reconsideration denied July 28, 1995
Marilyn S. Bright, for appellant.
Crudup & Hendricks, E. A. Crudup, Jr., for appellee.