BIG BUILDER, INC. v. EVANS

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Docket Number

46967.

Attorney(S)

Jimmy D. Harmon, for appellant. Kemper Miller, Marvin A. Miller, for appellees.

Judges

BELL, Chief Judge.

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Smart Summary

Factual and Procedural Background

The plaintiff, Big Builder, Inc., as payee, initiated separate suits against four defendants who were makers on promissory notes. Each defendant admitted executing the notes but denied any indebtedness, asserting defenses of failure of consideration and counter-claimed for money damages. The cases were consolidated and tried before a judge without a jury. Plaintiff moved to dismiss the defenses and counterclaims on the basis that the notes were unconditional written contracts and that parol evidence was inadmissible to alter their terms. The trial court denied these motions, allowed defendants to testify regarding oral promises made by plaintiff to repair defective construction on homes sold to them, and ultimately entered judgment for defendants on both the main suits and the counterclaims.

Legal Issues Presented

Whether the defense of failure of consideration can be supported by parol evidence despite the notes reciting "value received."
Whether the defendants met their burden of proof to recover damages on their counterclaims for plaintiff's alleged failure to perform promised repairs.

Arguments of the Parties

Appellant's Arguments (Plaintiff)

The notes were unconditional written contracts stating "value received," thus precluding any parol evidence to challenge the consideration.
The defenses of failure of consideration and the counterclaims should be dismissed as unsupported by written contracts related to the notes.

Appellees' Arguments (Defendants)

The notes were executed in reliance on plaintiff's oral promises to repair and correct defective construction on homes sold to them.
Failure of the plaintiff to perform these promises constituted failure of consideration, which could be explained by parol evidence despite the notes' terms.
Counterclaims sought damages for the plaintiff's failure to perform the repairs.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Reviere v. Evans, 103 Ga. 169 (29 S.E. 756)	The phrase "value received" in a promissory note is ambiguous and may be explained by parol evidence to show actual consideration and failure thereof.	The court admitted parol evidence explaining the consideration and found no error in denying plaintiff's motions to dismiss the defenses based on the parol evidence rule.
Studebaker Corp. v. Nail, 82 Ga. App. 779 (62 S.E.2d 198)	A party seeking damages must prove the amount of loss with reasonable certainty; damages cannot be based on guesswork.	The court reversed the judgments in favor of defendants on their counterclaims due to lack of evidence establishing the amount of damages with reasonable certainty.

Court's Reasoning and Analysis

The court analyzed the language of the promissory notes, specifically the term "value received," and found it ambiguous, allowing defendants to introduce parol evidence to explain the actual consideration and its alleged failure. This application was consistent with established precedent in Reviere v. Evans. The plaintiff's reliance solely on defendants' admission of note execution without further evidence was insufficient to overcome the defenses.

Regarding the counterclaims, the court emphasized the necessity for proof of damages with reasonable certainty. Defendants failed to present any evidence quantifying their losses resulting from plaintiff's failure to perform repairs. Citing Studebaker Corp. v. Nail, the court held that damages cannot be awarded on mere speculation or guesswork, leading to reversal of the judgments on the counterclaims.

Holding and Implications

Judgments affirmed in part; reversed in part.

The court affirmed the judgments in favor of defendants on the plaintiff's claims, upholding the admissibility of parol evidence to explain the consideration behind the notes. However, the court reversed the judgments on the defendants' counterclaims due to insufficient evidence of damages. This decision directly affects the parties by sustaining the defenses against plaintiff’s claims while denying monetary recovery on the counterclaims. The opinion does not establish new precedent beyond applying existing principles regarding parol evidence and proof of damages.

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BIG BUILDER, INC. v. EVANS et al.

BELL, Chief Judge.

Plaintiff, as payee, brought separate suits against four defendants as makers on promissory notes. Each defendant admitted execution of the notes, denied any indebtedness and pleaded failure of consideration and counter-claimed for money damages. The cases were consolidated for trial and heard by the trial judge as a jury trial was waived. Motions of plaintiff to dismiss the defenses of failure of consideration and the counterclaims were denied. The ground of the motions was that the defense of no consideration and counterclaims were not supported by written contracts made as a part of the same transaction and as the notes were unconditional contracts in writing no parol evidence was admissible to alter their terms. All notes recited that they were given for "value received." The defendants testified over objection based on the parol evidence rule that the notes were executed by them in consideration of plaintiff's oral promises to repair and correct defective construction on homes that plaintiff had sold to them and that plaintiff had failed to perform. The court granted judgment for the defendants on the main suits and for them on their counterclaims. Held:

1. The words "value received" in a promissory note, are ambiguous and open to explanation by parol and a defendant may explain what the actual consideration was and that it failed. Reviere v. Evans, 103 Ga. 169 ( 29 S.E. 756). There was no error in admitting the parol evidence nor in denying the motions to dismiss. The plaintiff relied solely on the admission of the defendants as to execution and offered no other evidence. The judgments in favor of the defendants on the plaintiff's claims are affirmed.

2. Each counterclaim alleged damages to the houses concerned as a result of plaintiff's failure to perform the repairs. There is absolutely no evidence to support any money judgments for the defendants on the counterclaims. Defendants offered no evidence at trial other than that noted in Division 1. The mere fact that plaintiff failed to perform the repairs standing alone does not furnish a basis upon which the amount of the loss can be calculated. Where a party sues for damages, he has the burden of proof of showing the amount of loss in a manner in which the jury or the trial judge in nonjury cases can calculate the amount of the loss with a reasonable degree of certainty. An allowance for damages cannot be based on guess work. Studebaker Corp. v. Nail, 82 Ga. App. 779 ( 62 S.E.2d 198). The judgments are reversed as to each counterclaim.

Judgments affirmed in part; reversed in part. Eberhardt, P. J., and Evans, J., concur.

SUBMITTED MARCH 6, 1972 — DECIDED JUNE 14, 1972.