Schuster v. CIC-Union Europeene International

McMurray, Presiding Judge. Plaintiff instituted an action against defendant seeking $6,499.35 principal, plus interest and attorney fees pursuant to a note. Defendant answered, denying liability, and counterclaimed, alleging that he executed the note to purchase real estate interests in R-Ranch One, Ltd.; that he was fraudulently induced to purchase the real estate interests; that plaintiff acquired knowledge of the fraud; and that he is entitled to rescind his purchase and the note. In answers to interrogatories, defendant elaborated upon his counterclaim by stating the following: “The R-Ranch One, Ltd., sold property interests as an investment with the promise that certain amenities would be added thus adding to the real property’s value. As such, the sale was a security, as the defendant would have no participation in management of the property.” Plaintiff moved for summary judgment, demonstrating that it purchased the note and a deed to secure debt for value from R-Ranch One, Ltd., on July 31, 1986; that defendant regularly made payments on the note; that defendant last made a payment on the note on June 15, 1987; and that defendant was indebted to plaintiff pursuant to the note in the amount of $6,499.35 principal, plus interest and attorney fees. The trial court awarded summary judgment to plaintiff in the amount of $6,499.35 principal, $4,158.69 interest, $674.93 attorney fees and costs. Defendant appeals. In his sole enumeration of error, defendant asserts a genuine issue of material fact exists as to whether the “interest purchased by [defendant] was a security. . . .” Held: Assuming, arguendo, that defendant purchased a security interest from R-Ranch One, Ltd., see Fortier v. Ramsey, 136 Ga. App. 203 (220 SE2d 753), we nevertheless affirm the grant of summary judgment. Why? Because plaintiff was a holder in due course. OCGA [647] § 11-3-302; see Verner v. McLarty, 213 Ga. 472, 475-476 (99 SE2d 890) (purchaser who acquires note and deed to secure debt can be holder in due course), overruled on other grounds, Ward v. Watkins, 219 Ga. 629 (135 SE2d 421). Thus, plaintiff took the note free of the fraudulent inducement defense raised by defendant. Citizens Nat. Bank of Quitman v. Brazil, 141 Ga. App. 388 (233 SE2d 482). See also Milligan v. Gilmore Meyer, Inc., 775 FSupp. 400 (S.D. Ga. 1991); Massey-Ferguson Credit Corp. v. Wiley, 655 FSupp. 655 (M.D. Ga. 1987). Decided April 5, 1993 — Reconsideration denied May 13, 1993 Robert S. Devins, for appellant. Clark & Mascaro, William E. Armstrong, for appellee. Judgment affirmed. Beasley, P. J., and Cooper, J., concur.