Byrd et al. v. Prudential Insurance Company of America

Supreme Court of Georgia1936-07-15No. No. 11149

182 Ga. 800

Summary · law.co

Holding. The court reversed the judgment, holding that the affidavit did not satisfy the statutory requirement of positive verification for equitable relief and that the trial court erred in admitting the amendment and appointing a receiver without considering that the parties had departed from the original contract terms, entitling the defendants to reasonable notice before enforcement of those terms.

Prudential Insurance Company filed an equitable amendment to a pending promissory note case, supporting it with an affidavit from a branch manager stating the allegations were true "to the best of his information and belief." The court admitted this amendment into evidence at a hearing on the receivership request. However, the affidavit did not constitute the positive verification required by statute for petitions seeking equitable remedies like receiver appointments. The manager's qualified language—indicating belief rather than direct knowledge—fell short of the sworn, positive verification demanded by law.

The defendants had departed from the original contract terms and made expenditures in reliance on that modified arrangement. Under the applicable statute, before either party could enforce the original contract terms, reasonable notice must be given of intent to abandon the departure. The evidence supported the defendants' claim that they were entitled to such notice before the plaintiff could declare the full debt due and pursue collection. Because the trial court erred in admitting the defectively verified amendment and in appointing a receiver without addressing this contractual departure issue, the judgment was reversed.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether an affidavit stating allegations are true "to the best of information and belief" constitutes positive verification for equitable relief
Admissibility of equitably amended pleadings supported by insufficiently verified affidavits
Notice requirements when parties depart from original contract terms before seeking enforcement

Procedural posture

Defendants in error appealed from a trial court order appointing a receiver in a promissory note action after an equitable amendment was filed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Atkinson, Justice.

1. “Petitions for a restraining order, injunction, receiver, or other extraordinary equitable relief shall be verified positively by the petitioner or supported by other satisfactory proofs.” Code of 1933, § 81-110. An equitable amendment to a pending suit upon a .promissory note was filed by a foreign corporation. To this amendment was attached an affidavit of Mark Cauble, in which he stated “that he is the manager of the Winston-Salem Branch Office of the Mortgage Loan Department of the Prudential Insurance Company of America, and in such capacity he has authority to make this affidavit; that he has read the above and foregoing equitable amendment and exhibits thereto, and that the allegations contained therein are true and correct, to the best of his information and belief.” Held:

(a) This was not positive verification as contemplated by the above section of the Code.

(&) At an interlocutory hearing for receiver the court erred in admitting in evidence in behalf of the plaintiff the equitable amendment supported by this affidavit, over appropriate objection by.the defendant.

(e) The foregoing ruling accords with the decisions in Loeb v. Smith, 78 Ga. 504 (3 S. E. 458), Landrum v. Landrum, 159 Ga. 324 (125 S. E. 832, 38 A. L. R. 217), Roberts v. Roberts, 180 Ga. 671 (3) (180 S. E. 491), and similar cases in which a different result was obtained where the allegations were positively sworn to.

2. The action of the court at the conclusion of the evidence in causing an appraisal to be made of the value of the property and considering the appraisal in deciding the case was not cause for reversal at the instance of the defendant, who did not object to the action of the court in causing the appraisal to be made and considering it as evidence, having for the first time complained by assigning error in the bill of exceptions on the order appointing a receiver.

3. “Where parties, in the course of the execution of a contract, depart from its terms and pay or receive money under such departure, before either can recover for failure to pursue the letter of the agreement, reasonable notice must be given the other of intention to rely on the exact terms of the agreement. Until such notice, the departure is a quasi new agreement.” Code of 1933, § 20-116. The allegations contained in paragraphs 6 and 9 of the defendants’ answer, and the evidence in support thereof offered by the defendants and not contradicted by the evidence of the plaintiff, demanded a finding in favor of the defendants that there was such departure from the original contract and expenditure of money by the defendants on the strength of such mutual departure as would entitle the defendants to reasonable notice of the plaintiff’s intention to return to the terms of the original contract before declaring the entire debt due and proceeding to bring suit for the amount of the debt.

4. The court erred in appointing a receiver.

Judgment reversed.

All the Justices cone ur.

B. B. Blackburn, for plaintiffs in error. A. M. Hiiz, contra.