303 Ga. 839
Ga.2018Background
- Colonial Oil sold fuel to Lynchar, Inc., which did business as T&W Oil; account forms variably listed "Lynchar, Inc. d/b/a T&W Oil Co.", "T&W Oil Co.", or "T&W Oil."
- Two individual shareholders (Derby and Thompson) executed personal guaranties naming the debtor as "T&W Oil, Inc."; both stated they never used the name "T&W Oil, Inc." but understood they were guaranteeing Lynchar's debt.
- Lynchar defaulted; Colonial sued guarantors for breach of guaranties and sought attorney fees; guarantors later asserted a Statute of Frauds defense on summary judgment, arguing the guaranties failed to identify the correct corporate debtor.
- Trial court admitted parol evidence, found guaranties enforceable, and awarded partial summary judgment to Colonial on breach and fees; Court of Appeals reversed holding a guaranty that identifies the principal only by trade name is unenforceable (PlayNation).
- Georgia Supreme Court granted certiorari to decide whether identifying the principal by trade name or by a misnomer defeats the Statute of Frauds requirement and whether the guaranties were enforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether identifying the principal debtor only by trade name satisfies the Statute of Frauds requirement for guaranties | Colonial: trade name that plainly referred to Lynchar satisfies the writing requirement; parol evidence may confirm identity | Guarantors: naming a trade name or misnomer fails to identify the principal debtor as required by OCGA § 13-5-30(2) (per PlayNation) | Identifying the debtor by trade name (or a misnomer) does not render a guaranty unenforceable; guaranties here are enforceable |
| Whether parol evidence may be used to show whom the trade name refers to when identity is disputed | Colonial: parol evidence may show trade-name identity without extending guarantor liability | Guarantors: parol evidence cannot supply a missing essential element required by the Statute of Frauds | Parol evidence is admissible to show that the trade name refers to the corporate principal; it does not impermissibly extend guarantor liability |
Key Cases Cited
- PlayNation Play Systems, Inc. v. Jackson, 312 Ga. App. 340 (Court of Appeals) (Court of Appeals decision that held guaranty naming only a trade name unenforceable; overruled)
- John Deere Co. v. Haralson, 278 Ga. 192 (Georgia Supreme Court) (guaranty enforceable where signature and context identified the guarantor; parol evidence admissible to prove identity)
- Auto-Owners Ins. Co. v. Tracy, 344 Ga. App. 53 (Court of Appeals) (trade name is an assumed name an entity may use and be sued in)
- L. Henry Enterprises v. Verifone, Inc., 273 Ga. App. 195 (Court of Appeals) (parol evidence admissible to explain ambiguities in descriptions)