The grant of a summary judgment for the plaintiffs was error where they failed to establish that there was no triable issue of fact as to a legally sufficient affirmative defense.
The plaintiffs in the case sub judice brought an action against Miss Barbara Hall in the Civil Court of Fulton County. The complaint as amended alleged that the plaintiffs are duly licensed to practice law in this State under the firm name of Westmoreland, Hall & Bryan; that the defendant executed and delivered to the plaintiffs the original of Exhibit "A"; that the plaintiffs have complied with all their obligations in representing the defendant as attorneys and all their services have been completed; that the defendant had failed and refused to pay the sum of $230 per month through certain stated months, leaving an unpaid and due balance of $1,840. Judgment was sought against the defendant in the amount above named.
Attached is Exhibit "A" consisting of an instrument in the form of a letter addressed to Westmoreland, Hall & Bryan which recited: "I agree to pay to your firm as attorney's fees for representing me in obtaining property settlement agreement and tax advice, the sum of $2,760, payable at the rate of $230 per month for twelve (12) months beginning January 1, 1970." This instrument was signed "Very truly yours, Barbara Hall Hedge."
The defendant filed defensive pleadings and a counterclaim. Defendant denied owing the plaintiff any sum whatsoever, and as her defenses set out: that she was represented by John L. Westmoreland, Jr., in a divorce proceeding under an agreement whereby he would secure attorney's fees by order of court and that he had received a sum in excess of $3,500 by court order; that Exhibit "A" was signed by her after the divorce matter had been completely settled and she received no consideration for its execution; that she did not receive any tax advice from the plaintiff or the plaintiff's firm; that she was informed that she would not be required to pay any fee, that Westmoreland would receive his fee from defendant's husband.
The plaintiffs moved for summary judgment on the ground that there was no material issue of fact. Attached to the motion was an affidavit of John L. Westmoreland, Jr., which stated that he represented the defendant in an action for divorce against her former husband and that: "As a result of my representation of the defendant, Miss Barbara Hall, and in an effort to accommodate the parties to that action in reaching an agreement as to the division of property, I agreed on behalf of the members of the firm of Westmoreland, Hall & Bryan that the attorney's fees for representing Miss Barbara Hall in that action could be paid by Miss Hall on a monthly basis as she received alimony payments from her former husband."
The defendant also moved for summary judgment and attached her sworn affidavit which recited: She was informed by John L. Westmoreland that she would not have to pay any fee since he would get his fee from her husband; that she knows of no agreement with regard to her paying attorney's fees other than Exhibit "A," which was executed approximately 30 days after the property agreement; that she received no consideration for the execution of Exhibit "A"; that she received no tax advice except that John L. Westmoreland, Jr. advised her that the document marked "Exhibit A" contained a reference to tax advice so that the payment would be deductible as an expense on her tax return. She further set out in her affidavit that the plaintiffs had been fully paid for services rendered in her behalf by orders of the court granting attorney's fees; that the plaintiffs had filed a claim for attorney's fees and had a final order disposing of such claims.
The trial judge entered an order granting the plaintiffs' motion for summary judgment. From this order appeal was taken.
One of the requirements of a negotiable instrument is that it contain the time honored "words of negotiability," such as pay to the order of or pay to bearer. This was inherent in our law prior to the enactment of the Commercial Code. See Pryor v. American Trust &c. Co., 15 Ga. App. 822, 825 (84 SE 312); Metropolitan Discount Co. v. Wardlaw, 37 Ga. App. 423 (2) (140 SE 525); Chandler v. Smith, 147 Ga. 637 (1) (95 SE 223). The Commercial Code continues this practice by now stating: "Any writing to be a negotiable instrument within this Article must . . . be payable to order or to bearer." Code Ann. 109A-3--104 (1) (d) (Ga. L. 1962, pp. 156, 239). See Code Ann. 109A-3--110 and 109A-3--111 (Ga. L. 1962, pp. 156, 242, 243). In the absence of such language, Exhibit "A" would not be a negotiable instrument.
Even if Exhibit "A" be considered a negotiable instrument, plaintiffs failed to meet the requirements of a holder in due course. Under the Commercial Code, the payee may be a holder in due course. Code Ann. 109A-3--302 (2) (Ga. L. 1962, pp. 156, 252). However, this does not mean he is per se a holder in due course; for he must meet all the requisites outlined in Code Ann. 109A-3--302. See also Code Ann. 109A-3--303 and 109A-3--304 (Ga. L. 1962, pp. 156, 253). Furthermore, even a holder in due course takes the instrument free of all defenses only "of any party to the instrument with whom the holder has not dealt." Code Ann. 109A-3--305 (2) (Ga. L. 1962, pp. 156, 255). Here, the plaintiffs failed to show they occupied the status of a holder in due course, or to establish they were not a party with whom the defendant dealt in this transaction.
As to one who is not a holder in due course, he takes the instrument subject to "all defenses of any party which would be available in an action on a simple contract; and the defenses of want or failure of consideration, nonperformance of any condition precedent, nondelivery, or delivery for a special purpose (109A-3--408)." Code Ann. 109A-3--306 (b) and (c) (Ga. L. 1962, pp. 156, 255).
While parol evidence is generally not admissible to vary the terms of a written contract, want or failure of consideration or that a contract was void ab initio may be set forth by evidence extrinsic to the instrument. Herrington v. Herrington, 70 Ga. App. 768
, 774 (29 SE2d 516
); Hawkins v. Collier, 101 Ga. 145 (1) (28 SE 632)
; Hinkle v. Hixon, 154 Ga. 193 (2) (113 SE 805)
. See also Purcell v. Armour Packing Co., 4 Ga. App. 253 (2) (61 SE 138)
; S & S Builders v. Equitable Invest. Corp., 219 Ga. 557
, 562 (134 SE2d 777
It is therefore apparent that the defendant was entitled to use the defense of failure of consideration. The plaintiffs, as movants for summary judgment, had the burden of establishing that there was no material issue of fact. This case is controlled by the principles set forth in 6 Moore, Federal Practice & Procedure, 56.17 , p. 2491: "Since one good defense will defeat recovery on a claim, where a defendant pleads both a sufficient negative and an affirmative defense, plaintiff is entitled to summary judgment only in the event that there is no genuine issue of material fact as to both the negative and affirmative defenses and he is entitled to judgment as a matter of law. When these conditions are satisfied, summary judgment may properly go for the plaintiff; otherwise not. Where the defendant's defenses are limited to one or more affirmative defenses and there is no triable issue of fact as to any of the affirmative defenses, or they are all legally insufficient, then the case is ripe for summary adjudication in accordance with applicable principles of substantive law. If, on the other hand, there is a triable issue of fact as to any one or more legally sufficient affirmative defenses, the plaintiff would not be entitled to summary judgment." Since the defense offered by the defendant was not legally insufficient as a matter of law, the plaintiffs had the burden of establishing the insufficiency of the defense as a matter of fact. The evidence in this case failed to accomplish this and the trial judge erred in granting summary judgment.
Judgment reversed. Jordan, P. J., and Evans, J., concur.