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The River Farm LLC v. Suntrust Bank

The debtor's inability to pay its $1.4M note did not constitute special circumstances under the confirmation statute, O.C.G.A. § 44-14-161.

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This appeal concerns The River Farm, LLC’s promissory note for $1,400,000 in favor of First National Bank of the South FNB, SunTrust Bank’s predecessor-in-interest. The note was secured by a deed for property in Morgan County and by Tom E. Dupree’s guarantee. The trial court granted SunTrust summary judgment on the note. On appeal, as below, The River Farm and Dupree concede that they executed the note and the guarantee respectively. Instead, they argue that their inability to pay any substantial part of the note amounts to “special circumstances” requiring the application of the procedures, including judicial approval, detailed in the confirmation statute, OCGA § 44-14-161. We disagree. As appellants know, a creditor who holds a promissory note secured by a deed may either sue on the note, foreclose on the deed, or both. Taylor v. Thompson , 158 Ga. App. 671, 672 282 SE2d 157 1981. As the Supreme Court of Georgia put the matter more than a century ago, “the only real defense to the action is to pay up the debt.” Dykes v. McVay , 67 Ga. 502, 505 1881 affirming plaintiff’s verdict for ejectment after plaintiff had already obtained a judgment on a note secured by the land; see also Jamison v. Button Gwinnett Savings Bank , 204 Ga. App. 341, 343 419 SE2d 91 1992 appellant debtors failed to specify any “special circumstances” sufficient to bar a creditor from suing under a note rather than foreclosing on the collateral property.

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