Mitchell v. Mitchell

Sognier, Judge.

Exie Harrell Mitchell, as executrix of the estate of her husband, Johnnie Mitchell, brought suit against Harriet Mitchell on a promissory note executed in favor of the decedent. The jury returned a verdict for Harriet Mitchell, but the trial court granted judgment for Exie Mitchell notwithstanding the verdict, and Harriet Mitchell filed this appeal.

The evidence adduced at trial disclosed that on July 15, 1981, appellee’s decedent sold two riverfront lots to his son, John Lewis Mitchell, and his son’s wife, appellant, in exchange for a $10,000 down payment and a promissory note for $25,000 executed by both purchasers. The note was due on July 15, 1987 although the parties verbally agreed that annual payments would be made. Appellant testified that when she and her husband made their first payment of $1,500 on July 7, 1982, Johnnie Mitchell asked them to sign a new promissory note reflecting the reduced balance outstanding, and that in response John Lewis Mitchell executed a new note as sole obligor. Appellant further testified that prior to Johnnie Mitchell’s death in August 1985, John Lewis Mitchell followed the same procedure for three subsequent payments totalling $5,000, each time giving his father a new note on which he was sole obligor for the remaining balance. John Lewis Mitchell was killed in an airplane crash in May 1986, and on August 11, 1987, appellee filed this action to recover the balance of $18,500 owed on the July 1981 note executed by John Lewis Mitchell and appellant.

1. Appellant contends the trial court erred by granting judgment n.o.v. to appellee, as sufficient evidence was adduced to authorize the jury to find a novation releasing appellant from the 1981 note. The trial court found there was no evidence that the notes John Lewis Mitchell executed as sole obligor were supported by valid consideration. However, as there was evidence sufficient to authorize the jury to conclude that one or more of these notes were supported by valid consideration in the form of settlement of a family dispute, we find the grant of judgment n.o.v. to be in error.

The evidence adduced at trial revealed that the sale of the subject property to John Lewis Mitchell and appellant had led to considerable dissension within the Mitchell family. John Lewis Mitchell’s siblings, Sara Reed and Harold Mitchell, both testified that they were unhappy about the sale of the property because it previously had been available for use by all family members, and Reed stated that she did not want appellant to profit from her ownership of the property. Appellant testified that Reed and Harold Mitchell were so angry after the sale that they did not speak to John Lewis Mitchell for months. Both appellant and her sister also testified that John Lewis Mitchell desired to restore family harmony, and in order to do so he and his father agreed to remove appellant’s name from the note arising out of the property transfer, and accordingly one or more new notes were executed with John Lewis Mitchell as the sole obligor. Although the trial court, relying on Irby v. Brooks, 246 Ga. 794 (273 SE2d 183) (1980), held that this testimony was untrustworthy hearsay, such testimony regarding the declarations of a decedent has since been held to be admissible, and assessment of the credibility of the testimony is left to the jury. Swain v. C & S Bank, 258 Ga. 547 (372 SE2d 423) (1988).

“Our . . . courts have favored the furtherance of compromise agreements and the settlement of family disputes. [Cit.] ‘An agreement to settle a family controversy will not be considered voluntary and without consideration, but will be enforced in equity as a fair family arrangement independent of its being a compromise of doubtful rights. . . [.] To render valid such compromise agreements it is not essential that the matter should be in real doubt; but it is sufficient if the parties should consider it so far doubtful as to make it the subject of compromise.’ ” Holsomback v. Caldwell, 218 Ga. 393, 395-396 (128 SE2d 47) (1962). Once the existence of a family settlement is established, it will be enforced without an inquiry “ ‘into the adequacy or inadequacy of the consideration.’ [Cit.]” Hancock v. Hancock, 223 Ga. 481, 487 (3 (b)) (156 SE2d 354) (1967). Although enforcement of family settlement agreements is an equitable remedy, this court has jurisdiction over equitable defenses, Alderman v. Crenshaw, 208 Ga. 71, 72 (3) (65 SE2d 178) (1951), overruled on other grounds, Wiley v. Wiley, 233 Ga. 824, 826 (1) (213 SE2d 682) (1975), and thus we may consider whether execution of a family settlement agreement provided consideration for the later notes.

Construing the evidence to uphold the verdict, we find the jury was authorized to conclude that John Lewis Mitchell, as sole obligor, executed one or more notes in favor of his father, the consideration for these notes being the desire of father and son to settle the family controversy that had arisen after Johnnie Mitchell’s sale of the subject property to his son and appellant, see Belt v. Lazenby, 126 Ga. 767, 771-772 (2, 3) (56 SE 81) (1906), thereby releasing appellant from her obligation on the note sub judice. See OCGA § 13-4-5; see also Leasing Systems v. Easy Street, 161 Ga. App. 756, 757 (1) (288 SE2d 879) (1982). We need not inquire whether this family settlement agreement fully accomplished the objective of restoring harmony within the Mitchell family because proof of execution of an agreement made to resolve a family controversy is all that is needed to establish the existence of consideration for enforcement of the obligation thereunder. See Hancock, supra at 487. This result does not leave appellee without a remedy because she has the option of bringing an action on the subsequent notes against the estate of John Lewis Mitchell.

Accordingly, we reverse with direction that the jury’s verdict in favor of appellant be reinstated.

2. Our decision in Division 1 renders moot appellant’s remaining enumeration of error.

3. In view of our decision in Division 1, appellee’s motion for damages for frivolous appeal is denied.

Judgment reversed with direction.

Banke, P. J., Birdsong, Pope and Benham, JJ., concur. Carley, C. J., Deen, P. J., and Beasley, J., dissent. McMurray, P. J., disqualified.