Sutton v. General Electric Credit Corp.

Court of Appeals of Georgia

Sutton v. General Electric Credit Corp.

268 S.E.2d 789, 154 Ga. App. 522, 1980 Ga. App. LEXIS 2266

CourtCourt of Appeals of Georgia

DecidedMay 5, 1980

Docket59647

StatusPublished

Cited by2 cases

This text of 268 S.E.2d 789 (Sutton v. General Electric Credit Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Sutton v. General Electric Credit Corp., 268 S.E.2d 789, 154 Ga. App. 522, 1980 Ga. App. LEXIS 2266 (Ga. Ct. App. 1980).

Pincite

Opinion

Banke, Judge.

In November 1973 the appellant executed a conditional sales contract to appellee covering the purchase of two pieces of equipment, a scraper and a backhoe, in a principal amount exceeding $100,000: In October 1974 the backhoe became imbedded near a river, and appellant sued two insurers of the backhoe, as well as appellee, to recover for his loss. In an agreement between the parties to dismiss appellee as a defendant in the litigation, a separate promissory note and chattel mortgage were executed in April 1975 by appellant to appellee. These documents covered only the scraper. Appellant concedes that the original note was not extinguished, but that the interest was to remain dormant pending the outcome of the backhoe litigation.

The appellant defaulted on the 1975 note and mortgage, and the scraper was repossessed. This appeal is from the grant of summary judgment to appellee in a suit to collect the deficiency after sale of the scraper. Appellant contends that the note and mortgage of April 1975 are in legal effect, a novation, rather than "a partial renewal and extension” of the original indebtedness as found by the trial court. If a renewal or extension occurred, the interest charged, though in excess of 6 percent is permissible under the provisions of Code Ann. § 57-119, because the original contract involved a principal sum in excess of $100,000. On the other hand, if the agreement concerning the scraper constitutes a novation, an issue of usurious interest exists because the principal sum is less than $100,000. Held:

“A novation is a complete contract within itself and has four essential requisites: (1) A previous valid obligation, (2) the agreement of all of the parties to the new contract, (3) the ex-tinguishment of the old contract, (4) the validity of the new one.” Williams v. Rowe Banking Co., 205 Ga. 770, 771 (55 SE2d 123) (1949). The appellant testified on the motion for summary judgment and [523]*523acknowledged that the original note was still outstanding. The trial court correctly determined that the note and mortgage of April 1979 "constituted a partial renewal and extension of an indebtedness in [excess of $100,000]... and there was no restriction in the amount of interest which could be charged.”

Submitted April 15, 1980 Decided May 5, 1980. H. G. Bozeman, for appellant. James V. Hilburn, for appellee.

Judgment affirmed.

McMurray, P. J., and Smith, J., concur.

Free access — add to your briefcase to read the full text and ask questions with AI

Banke, Judge.

In November 1973 the appellant executed a conditional sales contract to appellee covering the purchase of two pieces of equipment, a scraper and a backhoe, in a principal amount exceeding $100,000: In October 1974 the backhoe became imbedded near a river, and appellant sued two insurers of the backhoe, as well as appellee, to recover for his loss. In an agreement between the parties to dismiss appellee as a defendant in the litigation, a separate promissory note and chattel mortgage were executed in April 1975 by appellant to appellee. These documents covered only the scraper. Appellant concedes that the original note was not extinguished, but that the interest was to remain dormant pending the outcome of the backhoe litigation.

The appellant defaulted on the 1975 note and mortgage, and the scraper was repossessed. This appeal is from the grant of summary judgment to appellee in a suit to collect the deficiency after sale of the scraper. Appellant contends that the note and mortgage of April 1975 are in legal effect, a novation, rather than "a partial renewal and extension” of the original indebtedness as found by the trial court. If a renewal or extension occurred, the interest charged, though in excess of 6 percent is permissible under the provisions of Code Ann. § 57-119, because the original contract involved a principal sum in excess of $100,000. On the other hand, if the agreement concerning the scraper constitutes a novation, an issue of usurious interest exists because the principal sum is less than $100,000. Held:

“A novation is a complete contract within itself and has four essential requisites: (1) A previous valid obligation, (2) the agreement of all of the parties to the new contract, (3) the ex-tinguishment of the old contract, (4) the validity of the new one.” Williams v. Rowe Banking Co., 205 Ga. 770, 771 (55 SE2d 123) (1949). The appellant testified on the motion for summary judgment and [523]*523acknowledged that the original note was still outstanding. The trial court correctly determined that the note and mortgage of April 1979 "constituted a partial renewal and extension of an indebtedness in [excess of $100,000]... and there was no restriction in the amount of interest which could be charged.”

Submitted April 15, 1980 Decided May 5, 1980. H. G. Bozeman, for appellant. James V. Hilburn, for appellee.

Judgment affirmed.

McMurray, P. J., and Smith, J., concur.

Cite This Page — Counsel Stack

Bluebook (online)

268 S.E.2d 789, 154 Ga. App. 522, 1980 Ga. App. LEXIS 2266, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sutton-v-general-electric-credit-corp-gactapp-1980.

Opinion

Related

Cite This Page — Counsel Stack