Court Opinion

ID: 9626102
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:02:08.867773+00
Date Added: 2024-06-11T18:06:21.347441
License: Public Domain

Ruffin, Judge,
dissenting.
“The granting of a motion for judgment on the pleadings under OCGA § 9-11-12 (c) is proper only where there is a complete failure to state a cause of action or defense. For the purposes of the motion, all well-pleaded material allegations of the opposing party’s pleading are to be taken as true, and all allegations of the moving party which have been denied are taken as false.” (Citations and punctuation omitted; emphasis supplied.) Bacon v. Liberty Mut. Ins. Co., 198 Ga. App. 436 (401 SE2d 625) (1991). Viewing the allegations in Sysco’s complaint in this light, I cannot say that there has been a complete failure to state a cause of action. Accordingly, I respectfully dissent.
Taken as true, the allegations in Sysco’s complaint show that between March 15, 1991 and March 22, 1991, Charlton Club South (“Charlton Club”) placed orders on account for the purchase and delivery of various food and kitchen supply items from Sysco. On March 15, 1991, Coleman, who was Charlton Club’s vice-president, “signed an individual personal guaranty in favor of [Sysco] to induce [Sysco] to extend credit on account to [Charlton Club].” Charlton Club subsequently defaulted on payments due on the account.
As stated by the majority, Sysco attached a copy of an account terms agreement to the complaint. This agreement, dated March 15, 1991, clearly identifies Charlton Club as the “purchaser” of goods on account and was executed by a Sysco representative and by Coleman in her capacity as Charlton Club’s vice-president. The personal guaranty, which appears on the bottom half of the terms agreement, is also dated March 15, 1991, and signed by Coleman and a witness.
It should be noted that I agree with the majority that “this Court has consistently held that where a guaranty omits the name of the principal debtor, it is unenforceable as a matter of law.” However, contrary to the majority’s conclusion that this essential element must be contained within the four corners of a single document, “[o]ur courts have held that in order to satisfy the Statute of Frauds, the *464writing relied upon as a guaranty must, either in itself or in connection with other writings, identify the debt which is the subject of the promise, indicate knowledge of both the amount promised to be paid and the time the debt becomes due, and show who is the promisee as well as the promisor. [Cits.]” (Emphasis supplied.) Schroeder v. Hunter Douglas, Inc., 172 Ga. App. 897, 898 (2) (324 SE2d 746) (1984). “ ‘It is not necessary that the (guaranty agreement) contain in itself all of the requirements which the (S)tatute (of Frauds) embraces.’ ” Id. at 898-899. “[A]s long as all the necessary terms are contained in signed contemporaneous writings, the statutory requirements and purpose of the Statute of Frauds have been met, whether or not the writings are cross-referenced.” (Emphasis supplied.) Baker v. Jellibeans, Inc., 252 Ga. 458, 460 (1) (314 SE2d 874) (1984). Builder’s Supply Corp. v. Taylor, 164 Ga. App. 127 (296 SE2d 417) (1982), and the other cases cited by the majority are inapposite because they do not involve signed contemporaneous writings. Duke v. KHD Deutz &c. Corp., 221 Ga. App. 452, 453 (471 SE2d 537) (1996). See also Ellis v. Curtis-Toledo, Inc., 204 Ga. App. 704, 705 (2) (420 SE2d 756) (1992), in which there was no evidence of other writings and we specifically distinguished from Schroeder, supra, where we expressly held that other writings could supply the missing terms.
In the instant case, I note that contrary to the majority’s finding, Coleman is identified as the guarantor. Although a space for naming the guarantor was left blank, her signature appears at the bottom of the guaranty in the space provided for the “Guarantor.” And, although the majority states that Coleman denied signing the guaranty, for the purposes of Coleman’s motion her denial must be “taken as false” and we must assume that she did, indeed, execute the guaranty. See Bacon, supra at 436. Furthermore, though it is true that the space labeled “Company” was left blank on the guaranty, the guaranty shows that the “Company” was the entity receiving credit at Coleman’s request, and Charlton Club is 'clearly identified on the same piece of paper in the terms agreement executed by Coleman as the “[p]urchaser” of goods on account. Moreover, Sysco’s complaint allegations, taken as true for the purposes of Coleman’s motion for judgment on the pleadings, show that Charlton Club is the principal debtor. See Bacon, supra. Accordingly, whether we construe the terms agreement and guaranty as a single writing with an ambiguity as to the principal debtor, or as signed contemporaneous writings which together supply the essential elements of the guaranty, this document in combination with the complaint do not show that Sysco completely failed to state a cause of action to enforce the guaranty under the Statute of Frauds. See id.
Murray v. Pratt-Dudley Builders Supply Co., 176 Ga. App. 225 (335 SE2d 443) (1985), cited by the majority, shows why this case *465should not, and cannot, be disposed of by judgment on the pleadings. In Murray, as in the instant case, the creditor sued to enforce a personal guaranty signed by the alleged guarantor. Although the space on the guaranty form for identifying the creditor was left blank, the trial court granted summary judgment to the creditor. On appeal, the guarantor argued that the guaranty was unenforceable under the Statute of Frauds because it did not identify the creditor in whose favor the guarantee was executed. In his deposition, however, the guarantor freely admitted that he signed the guaranty for the debts of the principal debtor in favor of the plaintiff creditor. We found that in light of such testimony “the harm sought to be prevented by the statute of frauds simply [did] not exist, and . . . that [the guarantor was] estopped to assert the statute of frauds defense.” Id. at 227. Moreover, we found that under such circumstances, the Statute of Frauds defense was “‘patently absurd’” and imposed frivolous appeal damages against the appellant for relying on the defense. Id.
The reasoning employed by this Court in Murray is not limited to cases seeking the enforcement of guarantees. In Garrison v. Piatt, 113 Ga. App. 94 (1) (147 SE2d 374) (1966), a case which involved a contract for the sale of goods under the Uniform Commercial Code, this Court found that a defendant cannot admit the fact of the contract and at the same time claim the benefit of the Statute of Frauds. We reasoned that this provision of law “was designed to prevent the statute of frauds itself from becoming an aid to fraud, by prohibiting one [from] claiming the benefit of the statute who admits in the case the oral contract sued upon.” Id.
In the instant case it is not necessary to decide whether, as was done in the numerous other cases cited here and by the majority, the evidence shows that one party or the other is entitled to judgment on the merits. Rather, we must only determine whether “ ‘the pleadings affirmatively show that no claim in fact exists.’ ” (Citations omitted.) Bacon, supra at 436. Unlike Murray, the plaintiff in this case has not had any opportunity to present deposition testimony or other evidence showing whether Coleman admits the essential elements of the guaranty. If such evidence does exist, it would be “patently absurd” to allow Coleman to assert the Statute of Frauds as a defense. See Murray, supra. Furthermore, contrary to the majority’s conclusion, even in the absence of such admissions, Sysco can prove the existence of an enforceable guaranty through evidence of signed contemporaneous writings. Schroeder, supra; Baker, supra.
Finally, I must disagree with the majority’s finding that Sysco’s reliance on Schroeder, supra, is misplaced. As in this case, Schroeder involved allegedly missing essential elements of an enforceable guaranty, specifically, the amount promised to be paid and the time the debt became due. We found, however, that those elements could be *466proved by contemporaneous writings and were proved by invoices for materials purchased by the principal debtor from the creditors. See id. at 898-899. Contrary to the majority’s reading of Schroeder, it does not appear that this Court based its decision on the fact that the “exact amount of the debt on an open account was not determinable at the time of the guaranty’s execution.” Rather, the decision was based solely on the well-established rule that the essential elements of a guaranty may be established by contemporaneous writings. Id. See also Butler v. Godley, 51 Ga. App. 784, 788 (3) (181 SE 494) (1935). As to whether the exact amount and the full terms of the indebtedness on an open account are determinable at the time of the guaranty’s execution, we merely ruled that “ ‘[t]he jury in the exercise of common sense could see the logical connection between the [guaranty and the invoices].’ [Cits.]” Schroeder, supra at 899.
Decided July 16, 1997.
Lee, Black, Scheer & Hart, John D. Lange, Bouhan, Williams & Levy, Peter D. Muller, for appellant.
Gannam & Gnann, J. Hamrick Gnann, Jr., for appellee.
In short, I believe that Sysco’s complaint does not completely fail to state a cause of action to enforce a guaranty and that the trial court therefore erred in granting Coleman’s motion for judgment on the pleadings. Schroeder, supra; Baker, supra; Bacon, supra.
I am authorized to state that Presiding Judge Pope joins in this dissent.