Appellant sued appellee to recover for the alleged conversion of her funds after appellee exercised its right of set-off and redeemed a savings certificate owned by appellant to satisfy a loan owed by appellant’s son. Appellant appeals from the trial court’s order granting appellee’s motion for judgment on the pleadings for failure to state a claim upon which relief can be granted. OCGA § 9-11-12 (b) (6).
“ ‘For the purposes of the [motion for judgment on the pleadings], all well-pleaded material allegations of the opposing party’s pleadings are to be taken as true, and all allegations of the moving party which have been denied are taken as false. Conclusions of law are not admitted. Judgment on the pleadings may be granted only if, on the facts so admitted, the moving party is clearly entitled to judgment.’ . . . [Cits.]”
ALW Marketing Corp. v. McKenney,
Under this standard, the pleadings show that on January 11, 1985, appellant obtained a savings certificate from appellee in the amount of $10,000 bearing an interest rate of 9.50 percent per annum. Terry Yates, appellant’s son, was also listed as a co-owner of the savings certificate. The savings certificate contained an automatic renewal provision under which the certificate would renew at the prevailing interest rate every 18 months. The certificate automatically renewed three times between January 11, 1988 and January 11, 1991, and each time appellee paid the accrued interest. The next scheduled renewal date was July 11, 1992; however, exercising its right of set-off as provided in the savings certificate, on July 3, 1992, appellee redeemed the savings certificate to satisfy an automobile loan which was in default and owed by Terry Yates to appellee. The savings certificate contains the following set-off provision: “RIGHT OF SET OFF: Issuer may at any time set off against this Certificate any obligation owed to it by one or more of the registered holders.” Appellant alleged that she never signed the savings certificate or any other doc
At the core of appellant’s complaint and her four enumerations of error is the premise that she is the 100 percent owner of the funds on deposit and the right of set-off is an illegal contract to which she never agreed which obligates her to answer for the debt of her son. However, to the contrary, this case is controlled by
Simpson v. Ga. State Bank,
“[I]f a party to a multiple-party account is indebted to a financial institution, the financial institution has a right to setoff against the account in which the party has ... a present right of withdrawal. The amount of the account subject to setoff is that proportion to which the debtor is . . . beneficially entitled and, in the absence of proof of net contributions, an equal share with all parties having present rights of withdrawal.” OCGA § 7-1-821. The pleadings show that appellant supplied all of the funds which comprised the account, and Terry Yates had no beneficial entitlement. “However, the right to set-off as shown in [OCGA § 7-1-821], supra, is also ‘subject to any contractual provision,’ and the contract here by and between the parties authorized the bank ‘to [setoff against this Certificate any obligation owed to it by any one or more of the registered holders. It provides further that if the Certificate is issued in the name of more than one individual, it shall be deemed to be issued to them as joint tenants with the right of survivorship and not as tenants in common].’ . . . Under the above set of circumstances, even through the debtor ([Terry Yates]) was not beneficially entitled to any of the funds, the financial institution ([appellee]) had a right of set off under the contractual provisions shown above. [Cit.]” Simpson, supra at 313 (1).
Appellant attempts to distinguish
Simpson
from the instant case on the basis that the plaintiff in
Simpson
signed the depositor’s contract which contained the set-off provision; however, she never signed the savings certificate. Therefore, the set-off provision is unenforceable, citing the statute of frauds. This contention is wholly without merit. Moreover, we note that while making this argument, appellant concedes that the savings certificate created a contract between the parties, even though the certificate does not bear her signature. See generally
Spurlock v. Commercial Banking Co.,
We also reject appellant’s contention that the set-off provision is a guaranty or created an obligation for her to answer for her son’s debt. “The contract of suretyship or guaranty is one whereby a person obligates himself to pay the debt of another in consideration of a benefit flowing to the surety or in consideration of credit or indulgence or other benefit given to his principal, the principal in either instance remaining bound therefor. Sureties, including those formerly called guarantors, are jointly and severally liable with their principal unless the contract provides otherwise.” OCGA § 10-7-1. There is no language in the savings certificate that would make appellant personally liable, as a guarantor, for her son’s debts. Furthermore, as appellee correctly points out, prior to the default, appellant had an absolute right to withdraw all of the funds from the bank and had she done so or if the proceeds of the certificate of deposit were insufficient to pay Terry Yates’ debts by set-off, appellee would have absolutely no claim against appellant, personally and individually, to satisfy Terry Yates’ obligation to appellee.
We find no error in the court’s grant of appellee’s motion for judgment on the pleadings for failure to state a claim upon which relief can be granted.
Judgment affirmed.