Georgia Court of Appeals Reports

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LEVINSON v. AM. THERMEX, INC., 196 Ga. App. 291 (1990)
396 S.E.2d 252.
LEVINSON v. AMERICAN THERMEX, INC.
A90A0609.
COURT OF APPEALS OF GEORGIA.
DECIDED JUNE 21, 1990.
REHEARING DENIED JULY 11, 1990.

CARLEY, Chief Judge.

The relevant facts in this case are as follows: Robert Johnson
and appellant-defendant executed a promissory note in their
individual capacities at about the same time that Johnson
obtained from appellant a controlling interest in
appellee-plaintiff corporation. When the holder of the note
declared it due and payable under the terms thereof, neither
appellant nor Johnson paid the note. Instead, payment was made by
appellee. Thereafter, appellee brought this suit against
appellant, seeking reimbursement for its payment of the note. The
case was tried before a jury and a verdict was returned in favor
of appellee. Appellant appeals from the judgment entered by the
trial court on the jury's verdict.

1. Appellant enumerates as error the trial court's denial of
his motion for directed verdict and subsequent motion for
judgment notwithstanding the verdict or, in the alternative,
motion for new trial. Appellant urges that there is no evidence
which would authorize appellee to recover for its payment of a
note on which only he and Johnson were obligated.

"[T]he legal right of subrogation arising out of the payment
of the debt of another extends only in favor of a surety for the
payment Page 292 of the debt or in favor of one who is compelled to pay the debt
to protect his own right or interest...." Hiers v. Exum,
158 Ga. 19 (2) (122 S.E. 784) (1924). Although Johnson signed the note
ostensibly as a co-maker, he may be proved to be a surety by
parol evidence. See OCGA § 10-7-45; Campbell v. Rybert, 46 Ga. App. 461
(1) (167 S.E. 924) (1933); Buck v. Bank of the State of
Ga., 104 Ga. 660 (30 S.E. 872) (1898). However, the name of
appellee appears nowhere on the face of the note and there was
no evidence that appellee had ever legally obligated itself to
pay the note. See OCGA § 10-7-1; Hollingsworth v. Ga. Fruit
Growers, 185 Ga. 873, 876 (2) (196 S.E. 766) (1938). Compare
Complete AAA Mfg. Corp. v. C & S Nat. Bank, 119 Ga. App. 450,
451-52 (2) (167 S.E.2d 734) (1969). Moreover, it is undisputed that
the debt was paid by appellee to protect Johnson's credit and
not to protect any interest or right of appellee itself. It
follows that appellee is not a surety on the note and otherwise
has no right of subrogation at law.

Appellee contends that upon payment, it was automatically
assigned the rights of the holder of the note. However, there is
no evidence of a written assignment of the note to appellee by
the holder. Under the law of this state, "where the type of
agreement on which the action is brought is alleged to be an
assignment of a chose in action, and it is no more than an
assignment, a mere purchase of another's cause of action, it must
be in writing if the assignee is to sue thereon in his own name
in a purely legal action." State Farm &c. Ins. Co. v. Jones,
98 Ga. App. 46, 57 (2) (104 S.E.2d 725) (1958). The promissory note is
a chose in action. Kilgore v. Buice, 229 Ga. 445, 447
(192 S.E.2d 256) (1972). Therefore, appellee cannot recover in this legal
action based upon an entirely unwritten assignment of the note.

It follows that, under the evidence, appellee acted as a mere
volunteer when it paid the note, and it cannot recover its
voluntary payment. See OCGA § 13-1-13. Thus, the trial court
erred in denying appellant's motions for directed verdict and for
judgment n.o.v.

2. The remaining enumerations of error are moot.

Judgment reversed. McMurray, P. J., and Sognier, J., concur.

DECIDED JUNE 21, 1990 — REHEARING DENIED JULY 11, 1990.

Action on note. Fulton Superior Court. Before Judge Alexander.

Robert D. Wildstein, for appellant.

Gorby, Reeves, Moraitakis & Whiteman, Harold W. Whiteman,
Jr., Eve A. Appelbaum, Andy Nelson, for appellee.
Page 293