Opinion
44595, 44596.
ARGUED JULY 7, 1969.
DECIDED SEPTEMBER 3, 1969.
Complaint. Fulton Superior Court. Before Judge Pye.
Leachman, King, Thurman Marshall, Marjorie King, D. Jane Marshall, for appellants.
E. E. Moore, Jr., for appellee.
1. The court erred in excluding evidence of the alleged parol contract, in directing a verdict in favor of the defendant and in overruling the plaintiff's motion for a new trial.
2. The court did not err in overruling the defendant's demurrers to the complaint as amended.
ARGUED JULY 7, 1969 — DECIDED SEPTEMBER 3, 1969.
The plaintiffs, the seven trustees of the Macedonia Baptist Church, brought an action against the defendant bank for damages and other relief arising out of the defendant's alleged improper disbursement of portions of the funds of a loan the defendant had made to the plaintiffs' church.
The complaint, as finally amended and redrafted, alleges substantially as follows: On April 22, 1965, the defendant loaned to plaintiffs, as trustees of the church, $14,500 as a construction loan for an addition and alterations to the church building. Including a $5,302.90 existing loan, the loan totaled $19,802.90 and was secured by a security deed on the church property. Defendant agreed to supervise the construction work by the contractor according to the construction contract specifications. Disbursements of any money from said loan were to be made by check payable both to the church and to the contractor at percentile intervals as the work progressed, with defendant inspecting and ascertaining the satisfactory completion of each phase of construction. The parties agreed that plaintiffs' indorsements on the checks as issued would constitute their approval of same. Because of the aforesaid agreement defendant was the agent of the plaintiffs. Unknown to plaintiffs, defendant deposited the proceeds from the loan in its own name in its escrow account at Citizens Trust Co. Defendant failed to perform according to the terms of its agreement with the plaintiffs in that it paid out all but $2,400 of the loan fund to the contractor without requiring his compliance with the construction contract specifications and, excepting one $500 check, without any indorsement of the checks by the church or its authorized agents. Because defendant had assumed all the responsibility for the disbursement of the money, custody of all records and all details pertaining to the handling of the construction work, plaintiffs, who were not presented with the checks for indorsement, had no opportunity to know that the funds were being so disbursed. The contractor failed to comply with the specifications by using used and inferior materials, rather than new ones as required, and by doing portions of the job in an unworkmanlike manner and completely omitting to do other portions. The plaintiffs had complained to the defendant's inspector of the above noncompliance from the beginning of the construction and had been advised by defendant that no disbursements would be made without the indorsements of two or more of the trustees. Plaintiffs prayed that the existing temporary injunction against the defendant's foreclosure of the security deed remain in force and that they have judgment against the defendant in the amount which it would require to complete the job according to specifications, plus interest, attorney's fee and court costs and such other and further relief as the court deems just and proper.
Appellee filed an answer and demurrers. The appeal from the overruling of the demurrers was dismissed. Mutual Fed. Savings c. Assn. v. Johnson, 223 Ga. 811 ( 158 S.E.2d 762). On the trial of the case the court directed a verdict in favor of the defendant. The plaintiffs appealed to the Supreme Court from the judgment of the court on the verdict and the overruling of their motion for a new trial and the defendant cross appealed from the overruling of its demurrers. The Supreme Court transferred the appeal and the cross appeal to this court. Johnson v. Mutual Fed. Savings c. Assn., 225 Ga. 245 ( 167 S.E.2d 653).
"The validity of a parol contract is not affected by the fact that the same parties entered into a separate contemporaneous written contract, unless the former tends to contradict or vary the terms of the latter." Brinson v. Franklin, 177 Ga. 727 (1) ( 171 S.E. 287); S. S. Builders v. Equitable Inv. Corp., 219 Ga. 557, 560 ( 134 S.E.2d 777) and cit. "[P]arol evidence is admissible to prove the remaining provisions of a contract when the written instrument does not purport to contain all the stipulations of the contract. [Citations.]" S. S. Builders, supra, p. 562. The promissory note and the security deed executed by the plaintiffs provide only for the repayment of the loan to the defendant bank. The alleged verbal agreement, on the other hand, pertained to the disbursement of the loan funds. Therefore, it was error to exclude evidence of the parol contract, whether on the theory that it is collateral to, independent of, distinct from and not inconsistent with, hence not merging with, the written contracts, or on the theory that it was a part of the entire contract between the parties which the written instruments do not purport to embody. The written contracts were sufficient consideration to support the verbal agreement. Spier v. Lambdin, 45 Ga. 319.
The pleadings and evidence might authorize the finding of the existence and breach of a parol contract and resulting harm to the plaintiffs; therefore the court did not err in its judgment overruling the defendant's demurrers to the complaint as amended, but erred in its judgments directing a verdict in favor of the defendant and overruling the plaintiffs' motion for a new trial.
Judgment reversed on main appeal; affirmed on cross appeal. Pannell and Quillian, JJ., concur.