Agsouth Farm Credit, Aca v. Gowen Timber Company, Inc.
336 Ga. App. 581
Ga. Ct. App.2016Background
- AgSouth held legal title to timber on the 1,057-acre Shirley Bluff tract as collateral for a $2 million loan via a recorded deed to secure debt and security agreement (July 29, 2009). The deed forbade cutting timber without AgSouth's written consent and contained a dragnet clause covering renewals.
- Gowen family members operated the land; Gowen Timber harvested timber in 2010–2011 (297 loads; payments to Shirley Bluff totaling $421,023.63). Gowen Timber was not a party to the loan documents.
- AgSouth learned of the 2010 harvest during a 2011 renewal review and required a $150,000 principal reduction before renewing. Good (AgSouth loan officer) communicated orally with the Gowens and authored an August 26, 2011 email discussing the harvest but did not provide contemporaneous written consent for the earlier cutting.
- Loan went into default in August 2012; AgSouth foreclosed nonjudicially, purchased the property for $1,728,403.29, then sold it. AgSouth sued Gowen Timber (Nov. 2012) under OCGA § 51-12-51 for timber conversion seeking $421,023.63 (value paid for the timber).
- Trial court initially barred parol evidence of AgSouth’s alleged oral consent but later reversed and admitted such evidence; the jury asked whether witness testimony could override the written documents, was told yes, and returned a verdict for Gowen Timber. AgSouth appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether verbal or other parol evidence could establish consent required by OCGA § 51‑12‑51 and the deed | AgSouth: statute and deed unambiguously require written consent; verbal/parol evidence is inadmissible | Gowen Timber: oral agreements at closing/afterward or Good's email altered/waived the written requirement | Reversed: parol evidence inadmissible to vary statute and clear written deed; verbal consent insufficient as a matter of law |
| Whether mutual departure/subsequent oral agreement could waive written-consent clause | AgSouth: dragnet clause and recorded deed preserved requirement; any post‑execution understandings cannot vary clear written terms | Gowen Timber: parties’ conduct and understandings at visits and renewals modified terms | Held for AgSouth: mutual departure/parol evidence inadmissible to contradict unambiguous written contract; dragnet clause maintains security deed's terms |
| Whether Good’s August 26, 2011 email constituted written consent (or ratification) for prior/future cutting | AgSouth: email was explanatory to loan committee, not written consent; it postdated substantial cutting | Gowen Timber: email shows written approval or acquiescence | Held for AgSouth: email did not constitute written consent for past or unrestricted future cutting; cannot cure prior lack of written consent |
| Remedy and scope of retrial (liability, damages, fees, other evidence admissibility) | AgSouth: liability should be decided for plaintiff as a matter of law; damages/fees for jury | Gowen Timber: jury verdict should stand on admitted parol evidence; damages determined already | Court: Liability for conversion established as matter of law (Gowen Timber liable); new trial ordered limited to damages, interest, and reasonable attorney fees; certain evidence (appraisal, profits) admissible at retrial, Farm Credit Act evidence moot; jury should not be instructed under OCGA § 13‑1‑11 but may determine reasonable fees under timber statute |
Key Cases Cited
- Wilmock, Inc. v. French, 185 Ga. App. 259 (appellate view of verdicts and construing evidence in favor of verdict)
- Martin v. Fairburn Banking Co., 218 Ga. App. 803 (1995) (OCGA § 51‑12‑51 requires written consent; parol evidence cannot vary clear deed terms)
- Dobson v. Matt Owens Logging Co., 326 Ga. App. 879 (2014) (parol modification in contract context when acted upon — distinguished from statutory timber conversion rule)
- Weintraub v. Cobb Bank & Trust Co., 249 Ga. 148 (parol evidence rule refusing oral testimony to contradict written agreements)
- Cordele Sash, Door & Lumber Co. v. Prudential Ins. Co., 86 Ga. App. 738 (timber cut from land encumbered by recorded security deed demanded verdict for plaintiff)
- One Bluff Drive, LLC v. K.A.P., Inc., 330 Ga. App. 45 (review on appeal when legal issues considered at trial; relevance to motions in limine)
- Thakkar v. St. Ives Country Club, 250 Ga. App. 893 (timber removal liability under OCGA § 51‑12‑51 does not require fraud or bad faith)