GBA Priority Bill Introduced
Our thanks to Senate Banking and Financial Institutions Committee Chair William Ligon
(R-Brunswick) for introducing SB 37
this week. The legislation is one of GBA’s priority bills for 2019 and is needed to restore the proper method of releasing or rescinding a written guaranty. A 2018 Georgia Court of Appeals case, Crop Production Services, Inc. v T. E. Moye
, reversed two cases going back nearly three decades which held that the Statute of Frauds barred oral evidence that a written guaranty had been released or rescinded. In Moye
, the court held that a written guaranty may be rescinded by a mutual oral agreement, even though the guaranty itself is subject to the Statue of Frauds and contains a provision requiring that notice of revocation must be in writing. Because the creditor technically “won” this case because the summary judgment granted to the guarantor was reversed and remanded to the trial court to determine a question of fact, an appeal is unlikely. Therefore, legislation is needed to correct this decision that could have a profound impact on lending in Georgia. Joining Sen. Ligon as original cosponsors were Sen. John Kennedy
(R-Macon) and Sen. Jen Jordan
(D-Atlanta). The bill was assigned to the Senate Banking and Financial Institutions Committee for further action.