Citizens Bank, Vienna, Georgia (the Bank) sued Lamar Bowen, Jr. and his father, D. L. Bowen, on four promissory notes executed by Lamar and guaranteed by D. L. Bowen. The Bowens had obtained the Bank’s permission to voluntarily liquidate farm equipment that secured the various notes each had executed in favor of the Bank. The sales proceeds from D. L. Bowen’s collateral were sufficient to pay his notes, but Lamar Bowen’s equipment did not sell for an amount sufficient to satisfy his notes. The Bank brought the instant action to recover the deficiency. D. L. Bowen defended on the ground that his signature on the guaranties held by the Bank was obtained by fraud. The trial court directed a verdict in favor of the Bank against Lamar Bowen for the amount of the deficiency. The jury returned a verdict in favor of D. L. Bowen and the Bank appeals.
1. Appellant contends that the trial court erred by admitting into evidence testimony of oral statements between the parties made prior to or contemporaneously with the signing of the guaranties of payment, which statements attempted to vary the terms of the written documents. Appellees contend that the purpose of the statements was not to contradict the terms of the written agreements but to show that the agreements were void because D. L. Bowen’s signature on the guaranties was obtained by fraud.
Hinson v. Hinson,
The Bank had permitted Lamar and D. L. Bowen to finance equipment purchases by using jointly owned farm equipment as collateral. This practice was criticized by FDIC bank examiners and the Bank asked the Bowens to come in in order to obtain cross-endorsements on their respective notes. The Bank also wanted D. L. Bowen to endorse Lamar Bowen’s loans because Lamar’s collateral was insufficient. The need for cross signatures was initially explained to the Bowens by a Bank employee, Middlebrooks, but they refused his request to sign the guaranties and asked to see Wiley, whom they knew. Wiley explained that the cross-signing was needed
D. L. Bowen testified at trial that “[f]or some reason or other,” he did not see the heading, “Guaranty of Payment,” on the documents he signed, surmising that the heading had been covered by an attachment dealing with credit life insurance, or that the papers had been doubled over. “[Wiley] was handing them to me and he was in a hurry and all that and I didn’t see the [heading] there, I didn’t know — thought I was signing an agreement giving him the right to dispose of the equipment in case something happened [to me]. I didn’t know I was signing [a] guaranty____[H]e got me tricked into signing and I signed because I trusted him. ... I wouldn’t sign with Mr. Middlebrooks, but I would for Mr. Wiley.”
“Where one who can read signs a contract without apprising himself of its contents, otherwise than by accepting representations made by the opposite party, with whom there exists no fiduciary or confidential relation, he can not defend an action based on it . . . unless it should appear that at the time he signed it some such emergency existed as would excuse his failure to read it, or that his failure to read it was brought about by some misleading artifice or device perpetrated by the opposite party, amounting to actual fraud such as would reasonably prevent him from reading it. [Cits.]”
Morrison v. Roberts,
We have searched the record and found no evidence showing that D. L. Bowen was prevented from reading the documents he signed. While Bowen testified that the documents were covered up so that he could not see the words, “Guaranty of Payment,” he testified repeatedly and consistently that he could have read the documents if he had so requested. Further, he stated that he could have moved any attachments covering up the documents in order to read what was beneath them, but did not do so. Even if Wiley was in a hurry to have the documents signed, there is nothing to show that this presented such an emergency as to prevent Bowen from reading the papers he signed. See
Lewis v. Foy,
While fraud and reasonable diligence are normally questions for the jury,
Maxey-Bosshardt Lumber Co. v. Maxwell,
Further, there was insufficient evidence to authorize the jury to find that D. L. Bowen and Wiley shared a confidential relationship which would excuse Bowen’s failure to read what he signed on the basis of Wiley’s representations. That Bowen reposed trust and confidence in Wiley does not create a confidential relationship.
Dover v. Burns,
Absent a confidential relationship or such fraud as prevented D. L. Bowen from reading the guaranty instruments he signed, appellees may not rely or act upon any misrepresentations as to the contents of those instruments.
Robi,
supra;
Bateman v. Small,
2. For the reasons discussed in Division 1 above, the trial court, erred by instructing the jury on the question of a confidential relationship between D. L. Bowen and the Bank. See Davis, supra.
3. Appellant contends that the trial court erred by instructing the jury that “when a payment is made by a debtor to a creditor holding several notes given by the debtor to the creditor, the debtor has the right to direct the note to which payments should be applied, and the creditor is obligated to follow this direction.” See OCGA §
The evidence showed that following the voluntary liquidation of the collateral, and after realizing that his father had executed guaranties on four of his notes, Lamar Bowen directed the Bank to apply his sales proceeds to those notes first, but the Bank refused. Appellant contends that the application of such payments was controlled by a provision in the contract: “Any proceeds of any disposition of Collateral may be applied by the Holder to the payment of expenses in connection with the Collateral, including reasonable attorney’s fees and legal expenses, and any balance of such proceeds may be applied by the Holder toward the payment of such of the Liabilities, and in such order of application, as the Holder may from time to time elect.” (Emphasis supplied.)
Where the parties have made an agreement respecting the application of payments, it must be observed.
Redfearn v. Citizens &c. Nat. Bank,
Judgment reversed.