Court Opinion

ID: 9610934
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:49:18.169872+00
Date Added: 2024-06-11T18:03:07.070226
License: Public Domain

Deen, Chief Judge.
In March, 1973, the appellant purchased from the appellee’s assignor a certain tract of land for which he executed a note and deed to secure debt for the balance of the purchase price, subject to four prior deeds to secure debt to the property. Both the note and the loan deed contained the following clause: "[T]he undersigned shall have no obligation or liability for the payment of this note beyond the undersigned’s interest in the real property described in the deed to secure debt... holder agrees that in the event of a default hereunder holder will rely solely for the payment hereof on the collateral... and will not... seek recourse against the undersigned for any deficiency remaining after a foreclosure of said deed to secure debt and a sale of said real property; provided, however, that at the time such foreclosure is commenced the undersigned is not in default for nonpayment of principal or accrued interest under any note which is secured by a deed to secure debt having a lien on said real property with a priority senior to the lien of the deed to secure debt securing this note.”
Davidson defaulted in the payment of one or more of the prior secured debts on the property and the holder of the senior loan deed foreclosed on it in August, 1976, under power of sale, thus wiping out the equities of the appellant and all other lienholders. For reasons that are not apparent the appellee commenced a foreclosure proceeding in December, 1977, which was subsequently dismissed. It then filed the present suit on the note seeking the balance owing thereunder, which was in default, and on its motion was granted a summary judgment from which Davidson appeals. Held:
1. We must first recognize the rule that it does not follow from the fact that there are two possible interpretations of a contract that the matter automatically becomes a question for the jury. Warrior Constructors, Inc. v. E. C. Ernst Co., 127 Ga. App. 839, 840 (195 SE2d 261) (1973); Holcomb v. Word, 239 Ga. 847 (238 SE2d 915) (1977). Thus, the mere fact that the parties here insist that as a matter of law the clause in question *315does or does not exculpate the appellant from liability on the note does not alone push the decision within the realm of jury determination.
2. However, when we give precedence to the basic rule of construction that the intention of the parties should control, we reach a different result. Davidson in his affidavit opposing the motion for summary judgment avers that the intent of the instrument was to exculpate him from liability, leaving the plaintiff only the property itself as security, unless after foreclosure of the deed to secure debt extant between the parties there was a deficiency established in a confirmation sale combined with a default on a prior lien occurring at the time the foreclosure was initiated. The affidavit of the seller, on the other hand, states that the intent of the parties was to impose personal liability upon J. Dean Davidson if he should jeopardize the underlying collateral by defaulting on any indebtedness which was secured by a senior lien against the property.
3. It is also possible that the exact situation here involved is not one considered by either party to the contract and that there, was in fact no intent covering the situation at issue. That is, there is a blanket clause releasing the buyer from liability beyond his interest in the property hedged in by the proviso that the blanket clause does not apply if the seller forecloses at a time when the buyer is also in default on a prior deed. Did either or both parties contemplate a situation where the foreclosure of the prior deed before initiation of foreclosure on the deed in question renders much of this language meaningless? "No implied obligation can exist under a contract upon a point which it is apparent was not in the minds of the parties when the contract was executed.” 17 AmJur2d 652, Contracts, § 255.
It has also been stated many times that the issue of the severability of a contract is determined by the intention of the parties as evidenced by the terms of the contract. Dozier v. Shirley, 240 Ga. 17, 18 (239 SE2d 343) (1977). The same rule of construction may be applied to a single but independent facet of a contract, and we regard the exculpatory clause quoted here as being entire, rather than severable, in its provisions. From this it follows that *316the parties to the contract, by their diverse affidavits, have created a jury issue as to what their intent actually was if in fact a prior default had resulted in foreclosure by a third party before the seller or his assignee foreclosed, assuming a default to exist. Should it eventuate on the trial, however, that there was no intent, either express or implied, which covered the situation here existing, then the exculpatory clause, being construed as entire and indivisible, must necessarily fail.
Argued July 2, 1979
Decided September 12, 1979.
Charles C. Pritchard, Abraham A. Sharony, for appellant.
Adolphus B. Orthwein, Jr., Ben F. Johnson, III, for appellee.
The trial court erred in granting summary judgment instead of allowing the issues to be decided by a jury.

Judgment reversed.

McMurray, P. J., Smith, Banke and Underwood, JJ., concur. Quillian, P. J., Shulman, Birdsong and Carley, JJ., dissent.