First Georgia Bank v. M. D. Hodges Enterprises, Inc.

McMurray, Judge.

On or about September 25, 1972, John K. Porter Company, Inc., a real estate brokerage concern, executed a promissory note and security agreement for $10,000 to First Georgia Bank. The collateral for the note consisted of the following: "Commissions due from commission agreement dated November 1, 1971 between John K. Porter Company, Inc., and M. D. Hodges Enterprises, Inc., relating to a General Motors Corporation lease of the premises at 790 Great Southwest Parkway, Atlanta, Georgia.” The promissory note also contained the following language: "The undersigned agrees that Holder shall have a lien upon, security title to and a security interest in the Collateral to secure the payment of this Note *804and all other indebtedness or liability of the undersigned to Holder, however, and whenever incurred or evidenced, whether direct or indirect, absolute or contingent, or due or to become due thereafter with this Note collectively called 'Liabilities.’ ” (Emphasis supplied.)

By letter dated November 28, 1972, M. D. Hodges Enterprises, Inc. was notified by counsel for First Georgia Bank that John K. Porter Company, Inc. had transferred and assigned all of its rights, title and interest in and to commissions payable under the commission agreement dated November 1, 1971, entered into between Hodges and Porter, as collateral on a secured note between Porter and First Georgia Bank. This letter also informed Hodges that no commissions or monies payable to Porter were to be sent to the bank "unless a default occurs in the note.” In that event, First Georgia Bank would notify Hodges, and all future commissions payable under the commission agreement would be sent directly to First Georgia Bank. Hodges, by and through its president, on November 30, 1972, acknowledged the assignment and further that it would not be held responsible "until and/or unless Hodges is first notified in writing by the bank that Porter is in default and not before Hodges acknowledges in writing that such-notice has been received from the bank.”

Thereafter, on May 10, 1976, Hodges was notified that Porter was in default and to pay all future commissions to it. On May 25, 1976, Hodges notified counsel for First Georgia Bank that it was aware of the transfer and assignment of the commissions but that on August 1, 1974, Porter had assigned the commission agreement to Trust Company of Georgia; that on July 16, 1975, thereafter Trust Company of Georgia had advised it to make the commission payments payable to it and subsequent to July 16, 1975, discussions with "Trust Company Bank” with regard to cashing out the agency agreement were entered, and on February 2, 1976, the Agent’s Commission Agreement was to be "cashed out,” andlhiahad.occurred. This letter also adyised that "Trust Company Bank” warranted that it owned all right, title and interest of John K. Porter Company, Inc. in the commission agreement and that the bank would defend title to it, pay all costs of every kind whatsoever, including *805legal fees, with respect to any litigation that might occur.

It is here noted that the Porter promissory note with collateral had been renewed on several occasions until final payment on April 18, 1974, at which time it was returned to Porter marked paid. In the meantime on September 21, 1973, Porter had borrowed another $15,000 from First Georgia Bank and again on January 21, 1974, it borrowed an additional $15,000 from First Georgia Bank. These two notes were consolidated on April 29, 1974, in which a new note in the amount of $30,000 was executed. It was renewed several times but never paid and is now in default.

First Georgia Bank then sued John K. Porter Company, Inc. for the indebtedness due it and obtained judgment in the amount of $30,025 principal, $8,026.07 interest and $5,707.66 attorney fees. It then proceeded to sue M. D. Hodges Enterprises, Inc. in an amount equal to any commission payments due John K. Porter Company, Inc. under the commission agreement that had been assigned to it, that is, commission payments that became due since defendant M. D. Hodges Enterprises, Inc. received notice from First Georgia Bank to make such payments to the bank. Defendant M. D. Hodges Enterprises, Inc. answered, generally denying the averments of the complaint other than jurisdiction, notification of assignment of commissions and notification of Porter’s default; and added defenses of waiver of the security interest in the commissions, estoppel to now assert any interest in the commissions, a release of same, and an accord and satisfaction.

Following discovery defendant Hodges moved for summary judgment and the motion was granted after a hearing, the trial court holding that, "plaintiff had no perfected security interest.” Plaintiff appeals. Held:

Despite the fact that the plaintiff had never perfected its security interest in the collateral for its loan represented by a promissory note, the defendant was well aware of the assignment of the commissions it owed the debtor, Porter. Consequently, unless plaintiff has waived the security interest, has released it or is estopped to collect the commissions it has a valid claim against the defendant. The evidence discloses only an inference that *806the plaintiff had knowledge that its debtor planned to assign it to some other party free and clear of plaintiffs interest. However, this evidence does not demand a finding that the plaintiff voluntarily released its interest in the commissions or otherwise waived its security interest or that there has been an accord and satisfaction with reference thereto. In considering motions for summary judgment the evidence is construed more strongly against the movant and more favorably toward the one opposing the motion. Jaffe v. Davis, 134 Ga. App. 651, 654 (215 SE2d 533); Kaplan v. Sanders, 136 Ga. App. 902, 904 (4) (222 SE2d 630); Giant Peanut Co. v. Carolina Chemicals, Inc., 129 Ga. App. 718 (1), 719-720 (200 SE2d 918); Mathis v. R. H. Smallings & Sons, Inc., 125 Ga. App. 810 (189 SE2d 122); Burnette Ford, Inc. v. Hayes, 227 Ga. 551 (181 SE2d 866).

Argued February 7, 1978 Decided June 15, 1978 Rehearing denied July 25, 1978 Troutman, Sanders, Lockerman & Ashmore, John G. Grubb, Jr., William G. McDaniel, for appellant. King & Spalding, Charles M. Shaffer, Jr., Nolan C. Leake, for appellee.

Judgment reversed.

Bell, C. J., Deen, P. J., Quillian, P. J., Smith, Shulman, Banke and Birdsong, JJ., concur. Webb, J., dissents.