author: Andrews, Judge. Birdsong, Presiding Judge,

text:
    A93A0564.
    HARRY S. PETERSON COMPANY, INC. v. NATIONAL UNION FIRE INSURANCE COMPANY.
    (434 SE2d 778)
   Andrews, Judge.

Appellant Harry S. Peterson Company, Inc. (Peterson) appeals from the order of the Fulton County Superior Court granting appellee National Union Fire Insurance Company’s (National) motion to dismiss for lack of subject matter jurisdiction and improper venue.

Harvey Construction Company, Inc. (Harvey), a Maryland corporation, entered into a contract in Virginia with Fairfax County, Virginia, for the construction of a parking deck at a metro-rail station. This public project is located entirely within Fairfax County, Virginia. Pursuant to Virginia law, Harvey was obligated to obtain a surety bond naming appellee National as surety and Fairfax County as obligee; this payment bond was signed in Maryland. Thereafter, Harvey entered into a subcontract with appellant Peterson, a Michigan corporation, to perform certain work on the project. The subcontract was signed in Maryland. No documents were signed or work performed under this contract in the State of Georgia.

In its complaint against National, alleging, inter alia, breach of contract, Peterson alleged it had not been paid for the work performed on the project; that National was obligated to Peterson as a claimant under the terms of the payment bond; that the superior court had personal jurisdiction over the defendant National, subject matter jurisdiction, and venue. National, a Pennsylvania corporation, answered, admitting that it was a Pennsylvania corporation qualified to do business in Georgia and that its registered agent in Georgia was the person served.

The payment bond contains the following clause: “[n]o claim or action shall be commenced hereunder by any claimant . . . [o]ther than in a state court of competent jurisdiction in and for the country [sic] or other political subdivision of the state in which the Project, or any part thereof, is situated, or in the United States District Court for the district in which the project, or any part thereof, is situated and not elsewhere.”

1. The superior court had subject matter jurisdiction in this case in the “classic sense,” as that concept is defined in Vann v. DeKalb County Bd. of Tax Assessors, 186 Ga. App. 208, 209 (1) (367 SE2d 43) (1988). See, e.g., Ga. Const. 1983, Art. VI, Sec. IV, Par. I; OCGA § 15-6-8. Superior courts in this state have jurisdiction over the class of cases to which this case belongs, that is, suits for breach of payment bond contract, bad faith claims under OCGA § 10-7-30, and attorney fees.

2. The trial court, without discussing the requirement for adequately raising the defense of personal jurisdiction or the issue of waiver, observed that National in its answer “denied that personal jurisdiction exists” and found a lack of personal jurisdiction over Nátional. As the trial court unequivocally entertained the issue of personal jurisdiction, we consider this issue on appeal. Any issue of improper service, however, not having been expressly ruled on by the trial court and not raised by the parties is deemed abandoned. See Frymyer v. State, 179 Ga. App. 391 (3) (346 SE2d 573) (1986).

(a) The trial court concluded that due process concerns require dismissal of the suit for lack of personal jurisdiction, because there was a lack of minimum contact with Georgia so as to cause National reasonably to anticipate being hailed into court in Georgia; that there was insufficient evidence to establish whether the claim had any relation to or otherwise could have reasonably been expected to arise from minimum contacts; and that the exercise of jurisdiction in this case would not be reasonable and would violate notions of fair play and substantial justice. Underpinning these conclusions are the trial court’s findings that the only connection alleged with the State of Georgia is that National “does substantial business here.” Implicit in the trial court’s disposition is a finding that National is not a “resident” of Georgia for personal jurisdictional purposes.

(b) The trial court rejected Peterson’s contention that its claim under the payment bond constituted a transitory action and opined that “the controversy in this case does have a particular place where the contract is to be performed.” The controversy is between Peterson and National as to liability under the bond and not between Peterson and Harvey regarding the subcontract. While the bond does contain the clause quoted supra, the bond document does not limit the situs where any required or good faith bond payments ultimately would be made or where execution might be effected of any final payments justly due thereunder.

“The term ‘transitory action’ comprehends in general those actions which at common law might be tried wherever personal service could be obtained upon the defendant. But if the cause of action is one that in its nature can arise in one place only, the action is local and suit can be brought only where the cause of action arose. In other words, an action is transitory where the transaction on which it is founded might have taken place anywhere; and it is local where the transaction is necessarily local, that is, could have happened only in a particular place. The distinction exists in the nature of the subject of the injury rather than in the means used or the place in which the cause of action arises.” 77 AmJur2d, Venue, § 2. Peterson’s claim is grounded upon a transitory rather than a local action. Compare Walrus Mfg. Co. v. New Amsterdam Cas. Co., 184 FSupp. 214 (S.D. Ill. 1960) (action on performance bond was transitory); Apartments, Inc. v. Trott, 342 P2d 32, 36 (3) (DCA Calif. 1959) (performance bond a personal and transitory action); see also Louisville &c. R. Co. v. Meredith, 66 Ga. App. 488, 492 (18 SE2d 51) (1941) (at common law personal actions, whether arising ex contractu or ex delicto, are transitory and may be brought in a state other than where the cause of action arose), aff’d 194 Ga. 106 (21 SE2d 101) (1942).

The record establishes that National was doing substantial business in this state, although Peterson’s claims did not arise from or out of the conduct of such business in Georgia. In Georgia, the following general rules apply regarding jurisdiction over foreign corporations as to transitory causes of action. “The general jurisdiction of State courts extends to transitory causes of action arising in another State, even though the plaintiff may not have been a resident of the State where the cause of action arose and the defendant may be a foreign corporation, so long as it is confined to the field from which the State itself is not excluded under the provisions of the United States constitution.” Louisville, supra. A foreign corporation is present in any place where its officers or agents transact business in behalf of the corporation under authority conferred by it. Reeves v. Southern R. Co., 121 Ga. 561, 565 (49 SE 674) (1905). A foreign corporation may be sued on a transitory cause of action in any jurisdiction where it can be found in the sense that service may be perfected upon an agent or officer transacting business for the corporation within that jurisdiction, and the residence of the plaintiff and the place at which the cause of action arises are not issues material to jurisdiction if the corporation can be found and served. Reeves, supra. “The true test of jurisdiction is not residence or non-residence of the plaintiff, or the place where the cause of action originated, but whether the defendant can be found and served in the jurisdiction where the cause of action is asserted.” Reeves, supra at 563; Louisville, supra at 493; compare Murphy v. John S. Winter & Co., 18 Ga. 690 (1855); Hutto v. Plagens, 254 Ga. 512, 513 (1) (330 SE2d 341) (1985). “The jurisdiction of this state and its laws extend to all persons while within its limits, whether as citizens, denizens, or temporary sojourners.” OCGA § 50-2-21. “Corporations are artificial persons,” OCGA § 1-2-1 (b), and are persons within the meaning of OCGA § 50-2-21 (see Louisville, supra at 493-494 holding corporations are citizens for purposes of suit).

The above law does not offend either state or federal due process concepts. As a matter of federal due process, the business done by National in Georgia was sufficiently substantial and of such a nature as to permit Georgia to entertain the cause of action against it, though the cause of action arose from activities entirely distinct from its activities in Georgia. Perkins v. Benguet &c. Mining Co., 342 U. S. 437, 447-449 (72 SC 413, 96 LE2d 485) (1952); compare Burnham v. Superior Court of California Marin County, 495 U. S. 604 (110 SC 2105, 109 LE2d 631) (1990) (plurality opinion), citing, inter alia, Murphy, supra at 691-692 and Hutto, supra at 513. In Burnham, supra at 619, four justices of the United States Supreme Court held that “[t]he short of the matter is that jurisdiction based on physical presence alone constitutes due process.” The same plurality, citing Perkins, supra, recognizes that a special rule, based merely on “ ‘continuous and systematic’ ” contacts, may vest jurisdiction over corporations in addition to and apart from that traditional rule whereby jurisdiction is obtained by personal service upon a physically present defendant. Burnham, supra at 610, n. 1.

As above discussed, personal service of process is not at issue in this case. Accordingly, under either Perkins or Burnham, we are satisfied that jurisdiction duly vested, and that appellant’s federal due process rights were not violated thereby.

Additionally, in Allstate Ins. Co. v. Klein, 262 Ga. 599 (422 SE2d 863) (1992), the Supreme Court of Georgia examined the definition of nonresident in the Georgia Long Arm Statute (OCGA § 9-10-90) and held that “a corporation which is ‘authorized to do or transact business in this state at the time a claim’ arises is a ‘resident’ for purposes of personal jurisdiction over that corporation in an action filed in the courts of this state. As a resident, such a foreign corporation may sue or be sued to the same extent as a domestic corporation.” Id. at 601, n. 2 and accompanying text.

3. Peterson asserts that the trial court erred in applying Virginia law which restricted venue to the county in Virginia where the public construction project was situated and in enforcing the payment bond’s forum selection or limiting clause.

(a) For the former premise, Peterson relies on Tennessee Coal &c. R. Co. v. George, 233 U. S. 354, 356 (34 SC 587, 58 LE 997) (1914). There, a workman at an Alabama plant was severely injured when a locomotive under which he was working moved because of a defective throttle. He sued in Georgia, relying on an Alabama Statute which created a right of action making a master liable to an employee when injury was suffered due to defective machinery in the master’s business. Further, the statute stated that all actions under it “must be brought in a court . . . within the State of Alabama and not elsewhere.” The employer sought to abate the action because to ignore the forum limitation of the Alabama statute would violate the full faith and credit provisions of U. S. Const., Art. IV, Sec. I.

The Supreme Court found that “whether the statute be treated as prohibiting certain defenses, as removing common law restrictions or as imposing upon the master a new and larger liability, it is in either event evident that the place of bringing the suit is not part of the cause of action, — the right and the remedy are not so inseparably united as to make the right dependent upon its being enforced in a particular tribunal. The cause of action is transitory and like any other transitory action can be enforced ‘in [the Georgia courts]’ ” and that “the sister State trying the case [Georgia] would be bound to give full faith and credit to all those substantial provisions of the statute which inhered in the cause of action or which name conditions on which the right to sue depend. But venue is no part of that right. ...” Id. at 359-360.

In this case, however, more is involved than a statute of another state (Virginia) which purports by its terms to create a transitory action and then limit the locale for suit in violation of the U. S. Constitution. Here, there is an interstate transaction involving corporations of three different states, a public owner and project in another state, none of which is Georgia, and a dispute over contracts not signed in Georgia which contain a forum selection clause.

(b) The Tennessee Coal case in no way indicates that two contracting parties may not, as a matter of contract, agree that a certain venue is appropriate and contractually required.

Here, the contract sued upon (bond) was entered into in Maryland by two parties, Harvey Construction Company (a Maryland corporation) and National Union Fire Insurance Company (a Pennsylvania corporation), to provide a benefit to specified claimants, including Peterson (a Michigan corporation), under certain conditions spelled out in the bond, including one limiting suit to the project situs, Virginia.

This situation is more factually similar to The Bremen v. Zapata Off-Shore Co., 407 U. S. 1 (92 SC 1907, 32 LE2d 513) (1972). There, Zapata, a Houston, Texas corporation, contracted with Unterweser, a German corporation owning The Bremen, to tow an ocean-going drilling rig to Italy. The contract contained this clause: “Any dispute arising must be treated before the London Court of Justice.” The rig was damaged in a storm in the Gulf of Mexico and put into port at Tampa, Florida. There, Zapata filed its negligent towing claim seeking to recover the damages to its rig.

In upholding this forum selection contract clause, the U. S. Supreme Court found that “such clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances. . . . This approach is substantially that followed in other common-law countries including England. It is the view advanced by noted scholars and that adopted by the Restatement of the Conflict of Laws. It accords with ancient concepts of freedom of contract and reflects an appreciation of the expanding horizons of American contractors who seek business in all parts of the world.” (Footnotes omitted.) Id. at 10-11.

Peterson relies on Fidelity &c. Co. of Maryland v. Gainesville Iron Works, 125 Ga. App. 829 (189 SE2d 130) (1972) and Cartridge Rental Network v. Video Entertainment, 132 Ga. App. 748 (209 SE2d 132) (1974) for the proposition that all venue selection contract clauses are against Georgia public policy and will not be enforced by Georgia courts. However, both of these cases deal with intrastate transactions. Cartridge, which did not involve an insurance or bond claim, cited only Fidelity as authority for its holding that all venue selection clauses are violative of Georgia public policy. Despite the statement to the contrary in Cartridge, Fidelity can only be read as premising its conclusion regarding limitations on intrastate venue against insurers as violative of OCGA § 33-4-1, which provides for multiple venues for suit against insurers in Georgia, in direct contradiction to the contract clause in Fidelity. Therefore, I believe the language in Cartridge referring to “broad considerations of public policy against limiting venue by contract” should be disapproved.

When more than one state and its citizens are involved, as here, competing policy interests of this state come into play. In Amica Mut. Ins. Co. v. Bourgault, 263 Ga. 157 (429 SE2d 908) (1993), the issue was whether an automobile insurance policy delivered to a Georgia resident and purporting to cover only vehicles owned by the Georgia resident but registered and garaged in New York ran afoul of OCGA § 33-7-11 regarding uninsured motorist coverage. The Georgia resident sought to stack her New York vehicle coverage with coverage under a policy on her Georgia registered automobile in which she was injured. Both policies were issued by Arnica.

In upholding the New York policy’s exclusion in light of this Georgia statute, the court stated that “[o]ur reading of this statute is supported by certain basic principles of fairness and comity set forth for the resolution of problems which arise when the laws of one state are in conflict with those of another state. One such principle is that the validity of and rights created by a liability insurance contract are to be determined by the law of the state which the parties understood to be the principal location of the insured risk during the term of the policy. [Cit.]” Arnica, supra at 160 (2). The court concluded that to do otherwise would “be unfair and would deprive insurance companies of the degree of certainty necessary for determining the cost and extent of coverage.” Id. In the present case, the principal location of the risk assumed by National under the bond is Virginia, the location of the project, and it is reasonable to assume the parties to the contract so anticipated.

This also carries out Georgia’s rule of lex loci contractus. Gen. Tel. Co. &c. v. Trimm, 252 Ga. 95 (311 SE2d 460) (1984). The bond reflects that the contract for construction of the parking structure in Virginia “is by reference made a part hereof. . . .” While the bond was not finalized in Virginia, performance of the incorporated contract as well as the location of the risk assumed by the insurer and the contractually designated forum for resolution of conflicts regarding the construction project is Virginia.

Even if the contract venue selection provision differed from Georgia law with regard to interstate transactions, this does not, in itself, create such a public policy concern that precludes the application of another state’s law, if that were necessary to decide here. Commercial Credit Plan v. Parker, 152 Ga. App. 409, 412 (1) (263 SE2d 220) (1979) (Georgia courts will enforce a South Carolina loan which would be deemed usurious under Georgia law).

This result also enhances the freedom to contract. “ ‘The “freedom of individuals to contract” is part of the basic liberties enjoyed by the citizens of this state and should not be interfered with in the absence of clear necessity.’ [Cit.]” Travelers Ins. Co. v. McNabb, 201 Ga. App. 297, 301 (2) (410 SE2d 788) (1991). Dacosta v. Allstate Ins. Co., 188 Ga. App. 10, 11 (372 SE2d 7) (1988).

Therefore, enforcing the validity of the contract’s forum selection clauses does not offend the principles of Fidelity, supra.

4. This makes unnecessary our consideration of the argument premised on principles of forum non conveniens. We note, however, that under Georgia law, a trial court would abuse its discretion by dismissing a case on the grounds of forum non conveniens. Compare Southern R. Co. v. Goodman, 259 Ga. 339 (380 SE2d 460) (1989); Gay v. Piggly Wiggly Southern, 183 Ga. App. 175, 182 (4) (358 SE2d 468) (1987); Smith v. Bd. of Regents &c. of Ga., 165 Ga. App. 565 (302 SE2d 124) (1983).

Judgment affirmed.

Pope, C. J., Beasley, P. J., Cooper and Smith, JJ., concur. Birdsong, P. J., McMurray, P. J., and Blackburn, J., dissent. Johnson, J., not participating.

Birdsong, Presiding Judge,

concurring in part and dissenting in part.

1. I concur fully in Divisions 1 and 2 of the majority opinion, and with the conclusion in Division 4 thereof that under Georgia law, a trial court would abuse its discretion by dismissing a case on grounds of forum non conveniens.

2. I dissent as to Division 3.,

(a) Appellant asserts the trial court erred in applying Virginia law which purported to restrict venue to the county in Virginia where the construction project was situated.

“The traditional method of resolving choice-of-law issues is through a tripartite set of rules, which are lex loci contractus, lex loci delicti, and lex fori. Under the rule of lex loci contractus, the validity, nature, construction, and interpretation of a contract are governed by the substantive law of the state where the contract was made, except that where the contract is made in one state and is to be performed in another state, the substantive law of the state where the contract is performed will apply. [Cit.] Under the rule of lex loci delicti, tort cases are governed by the substantive law of the state where the tort was committed. [Cit.] Under the rule of lex fori, procedural or remedial questions are governed by the law of the forum, the state in which the action is brought.” Fed. Ins. Co. v. Nat. Distrib. Co., 203 Ga. App. 763, 765 (417 SE2d 671).

In Biddinger v. Fletcher, 224 Ga. 501, 504 (162 SE2d 414), it was held that, as between counties in the same jurisdiction, venue statutes relate to procedure, not jurisdiction. Compare Hatfield v. Leland, 143 Ga. App. 528 (239 SE2d 169). If venue is a matter of procedure in this case then under the rule of lex loci fori, procedural questions are determined by the law of the forum. However, interstate venue (venue between different counties) is a jurisdictional matter whereas municipal venue (venue between different places in the same jurisdiction) generally is a procedural matter. Tennessee Coal &c. R. Co. v. George, 233 U. S. 354, 356 (34 SC 587, 58 LE 997). The question of venue among sovereign states is thus jurisdictional rather than procedural. Tennessee Coal, supra, 233 U. S. at 356, 360. Nevertheless, the law of the forum state, in this instance Georgia, would still apply. In Tennessee Coal, supra, 233 U. S., the United States Supreme Court affirmed our judgment in Tennessee Coal &c. R. Co. v. George, 11 Ga. App. 221 (75 SE 567), holding: “The courts of the sister [s]tate trying the case would be bound to give full faith and credit to all those substantial provisions of the statute which inhered in the cause of action or which name conditions on which the right to sue depend. But venue is no part of the right; and a [s]tate cannot create a transitory cause of action and at the same time destroy the right to sue on that transitory cause of action in any court having jurisdiction. That jurisdiction is to be determined by the law of the [forum] court’s creation and cannot be defeated by the extraterritorial operation of a statute of another [s]tate, even though it created the right of action.” (Emphasis supplied.) Tennessee Coal, supra, 233 U. S. at 360; see also Nailen v. Ford Motor Co., 690 FSupp. 552, 556, n. 3 (D.C. S.D. Miss.). Thus, the United States Supreme Court concluded “a transitory cause of action can be maintained in another [s]tate even though the statute creating the cause of action provides that the action must be brought in local domestic courts.” Tennessee Coal, supra, 233 U. S. at 361. In Slaton v. Hall, 172 Ga. 675, 682-683 (3) (158 SE 747), our Supreme Court cited and applied the holdings of the United States Supreme Court and our court in the Tennessee Coal cases, and held that the trial judge did not err in striking an amendment to defendant’s answer which asserted that under Alabama law the plaintiff could sue upon a transitory cause of action only in Alabama. Accordingly, we find that Virginia could not lawfully preclude, by its statutes, the State of Georgia from exercising its own jurisdiction and applying its own rules of law in determining venue (whether venue is classified procedural in nature or, as interstate venue and jurisdictional within the meaning of Tennessee Coal, supra, 233 U. S.).

(b) Appellant asserts the trial court erred in enforcing the payment bond’s forum selection or limiting clause. The payment bond pertinently provided: “3. No suit or action shall be commenced hereunder by any claimant . . . (c) other than in a state court of competent jurisdiction in and for the county or other political subdivision of the state in which the project or any part thereof, is situated, or in the United States District Court for the district in which the project, or any part thereof, is situated, and not elsewhere.”

Pretermitting whether this issue generally would be determined under the rule of lex loci contractus, thereby causing Virginia law to be applied, is whether the forum limiting clause in this contract would violate Georgia public policy. “The comity of [s]tates would not require the courts of this [s]tate to enforce a cause of action when to do this would be contrary to the established policy of the [s]tate.” Reeves v. Southern R. Co., 121 Ga. 561, 565 (49 SE 674). Thus, even if an application of the traditional tripartite set of rules pertaining to the methods of resolving choice-of-law issues “renders the law of another state applicable, the forum, within constitutional limits, is not required to give the law of another state extra[-]territorial effect. That is only done as a matter of courtesy or comity, which will not be enforced if the law of the other state contravenes the public policy of the forum.” (Emphasis supplied.) Fed. Ins. Co., supra at 766. Commercial Credit Plan v. Parker, 152 Ga. App. 409, 412-413 (263 SE2d 220) is distinguishable and not controlling; in Commercial Credit we concluded the Georgia Industrial Loan Act did not express a public policy as to a Georgia borrower but rather expressed public policy toward the assiduous regulation of and compliance by those who make certain loans in Georgia, thereby allowing the South Carolina law to be applied as a matter of comity. Notwithstanding the laws of other jurisdictions, in Georgia a provision of a contract fixing the venue of an action on the contract as to future litigation (venue limiting provision) is void, as contrary to public policy. Cartridge Rental Network v. Video Entertainment, 132 Ga. App. 748 (209 SE2d 132); Fidelity &c. Co. of Maryland v. Gainesville Iron Works, 125 Ga. App. 829 (189 SE2d 130); Davis v. Aetna Cas. &c. Co., 696 FSupp. 634, 640, n. 4. (D.C. N.D. Ga.). Such venue limiting provisions are unenforceable in Georgia. Id. Moreover, the public policy discussed in Fidelity &c. Co., supra, a case containing a venue limiting clause substantially the same as the venue limiting clause in the case at bar, “was not solely confined to the statute therein involved but was based on broad considerations of public policy against limiting venue by contract” (Cartridge, supra). Accordingly, I can only conclude that the venue limiting clause in the payment bond contract is against Georgia public policy and unenforceable in our courts. The majority would disapprove the language in Cartridge and ignore the persuasive language in Davis, supra; with this I cannot agree.

(c) As tacitly recognized by the majority, appellee skillfully importuned this court to apply certain legal principles, which actually apply to the doctrine of forum non conveniens, in the disposition of the appellate issues before this court. Other jurisdictions apply this doctrine, and on occasion it can be a great boom to judicial economy. Nevertheless, Georgia courts are not at liberty to apply this doctrine, and are obligated to liberally interpret the law so as to maximize the jurisdictional reach of the protective arms of our judicial system. The majority correctly recognizes that under existing Georgia law, a trial court would abuse its discretion by dismissing a case on the grounds of forum non conveniens. Compare Southern R. Co. v. Goodman, 259 Ga. 339 (380 SE2d 460); Gay v. Piggly Wiggly Southern, 183 Ga. App. 175, 182 (4) (358 SE2d 468); Smith v. Bd. of Regents &c. of Ga., 165 Ga. App. 565 (302 SE2d 124). Although occasionally an anomaly may result wherein a case is litigated in Georgia which perhaps could have been litigated more conveniently elsewhere, our jealous protection of our jurisdiction has withstood the test of time and has proven to be in the long-term best interests of the citizens of this state and entirely compatible with the constitutional right of access to our courts (see, e.g., Ga. Const. 1983, Art. I, Sec. I, Par. XII; OCGA § 1-2-6 (6)).

Decided July 16, 1993.

Weisz & Port, Peter R. Weisz, Robert C. Port, for appellant.

Hotz & Associates, J. Tyler Tippett, for appellee.

Likewise, cogent public interest considerations support the retention of a public policy which broadly rejects the limiting of venue by contract. While the immediate effect of the majority’s decision is to aid judicial economy, I am concerned that, if their judgment stands, a large number of persons in our state will have no genuine future choice but to accede to unfavorable venue selection clauses placed in contracts by those occupying unequal, superior bargaining positions.

Accordingly, I respectfully dissent as to Division 3.

I am authorized to state that Presiding Judge McMurray and Judge Blackburn join in this dissent.

       For a detailed discussion of this issue, see generally Congressional Obligation To Provide A Forum For Constitutional Claims: Discriminatory Jurisdictional Rules And The Conflict of Laws, 69 Va. L. Rev. 819-849 (1983).

       For an in-depth discussion of this subject, see Validity Of Contractual Provision Limiting Place Or Court In Which Action May Be Brought, 31 ALR4th 404-445 (1984).


source: Caselaw Access Project

author: Smith, Judge.

license: Public Domain

text:
    A93A0584.
    DAVIS v. CONCORD COMMERCIAL CORPORATION.
    (434 SE2d 571)
   Smith, Judge.

Davis was the president of Benafuels, Inc., which conducted coal mining operations in West Virginia. Benafuels entered into three separate agreements with Ingersall-Rand Financial Corporation (IRFC) to secure the purchase money financing of three coal mining machines. See OCGA § ll-9-rl07 (b). Contemporaneously with the execution of the first security agreement, Davis entered into an agreement guaranteeing “absolutely and unconditionally . . . the payment of all liabilities of [Benafuels, Inc.] to IRFC of whatever nature, whether now existing or hereafter incurred, whether created directly or acquired by IRFC by assignment or otherwise, whether matured or unmatured and whether absolute or contingent, irrespective of any invalidity therein, the unenforceability thereof or the insufficiency, invalidity or unenforceability of any security therefor. . . . This guaranty is a continuing guaranty ... in full force and effect irrespective of any interruptions in the business relations of [Benafuels, Inc.] with IRFC.” By giving written notice, Davis could terminate his responsibility as to all liabilities of Benafuels incurred by it or acquired by IRFC. Any such termination would become effective 30 days after receipt of the written notice. In the guaranty agreement, Davis waived all further notice, any demand for payment, the benefit of any exemption, and all set-offs and counterclaims. The agreement stated that any reference to IRFC was expressly inclusive of its successors and assigns. After Benafuels went through liquidation proceedings in federal bankruptcy court, Concord Commercial Corporation (CCC), as successor-in-interest to IRFC, sued Davis on his guaranty in this contract action to recover the balance of the purchase price of the three coal mining machines. The case was tried before a jury which returned a verdict in favor of CCC against Davis. He appeals from the judgment entered by the trial court on the jury’s verdict.

1. Immediately before trial, Davis moved to dismiss pursuant to OCGA § 9-11-12 (h) (3), arguing that the remedy sought was beyond the subject matter jurisdiction of the State Court of Fulton County. The denial of this motion is enumerated as error.

Davis’s motion was based upon the fact that prior to the sale of the first coal mining machine, IRFC created several wholly-owned subsidiaries and transferred to them all of the assets of IRFC. He argues that since one subsidiary, IRFC Leasing 16 Corporation, was the true owner of the mining machines at issue at the time Benafuels entered into its first security agreement and Davis executed the guaranty, no interest remained for IRFC to convey to Benafuels. He contends that CCC effectively was seeking equitable reformation of the contracts, a remedy beyond the jurisdiction of the state court. See OCGA § 23-1-1. CCC, on the other hand, argues that the identification of IRFC rather than the recent assignee, IRFC Leasing 16 Corporation, as the creditor was a mere misnomer due to the use of an old form agreement which had not been updated to reflect the creation of IRFC Leasing 16 Corporation. CCC urges that this misnomer merely created a jury question of contract construction as to the true intent of the parties rather than an issue of equitable reformation of the writing to alter its terms.

“The term ‘successor’ means, ordinarily in the case of a corporation, another corporation which by a process of amalgamation, consolidation, or duly authorized legal succession has become invested with the rights and has assumed the burdens of the first corporation. A legal assignment is a transfer or setting over of property, or of some right or interest therein, from one person to another, and unless in some way qualified, it is properly the transfer of one whole interest in an estate, chattel, or other thing.” (Citations, punctuation, and footnote omitted.) Southern Patrician Assoc. v. Intl. Fid. Ins. Co., 191 Ga. App. 106, 107-108 (381 SE2d 98) (1989). It is undisputed that CCC is the successor of IRFC because of a transfer of all the stock in IRFC to CCC. It is further undisputed that IRFC Leasing 16 Corporation also assigned all interest in the security agreements with Benafuels to CCC. However, neither of these transactions alone would suffice to make Davis liable to CCC under the continuing guaranty, unless the debt sought to be enforced had also been acquired by IRFC.

Assuming, arguendo, that IRFC Leasing 16 Corporation alone had title to convey as a seller, nevertheless, IRFC itself became a creditor of Benafuels, within the scope of Davis’s guaranty agreement, by virtue of its status as the sole shareholder of IRFC Leasing 16 Corporation at all pertinent times. In Georgia, the common law doctrine of corporate continuity applies where, as here, there is a substantial identity of ownership and a complete identity of the objects, assets, shareholders, and directors. See Bullington v. Union Tool Corp., 254 Ga. 283, 284 (328 SE2d 726) (1985). See also Johnson-Battle Lumber Co. v. Emanuel Lumber Co., 33 Ga. App. 517 (1) (126 SE 861) (1925). IRFC acquired an existing debt obligation of Benafuels’s and became its creditor “by assignment or otherwise.” The substantive rights in that indebtedness were then properly assigned to CCC through the subsequent sale of all the stock in IRFC. There is no need for equitable reformation of any writing, and so the trial court did not err by refusing to dismiss this contract action as being beyond the subject matter jurisdiction of the State Court of Fulton County under OCGA § 9-11-12 (h) (3).

2. Consideration moved to the principal, Benafuels, by the extension of credit to finance the purchase price of the mining machines. See OCGA § 10-7-1. Davis’s contention that the guaranty is unenforceable owing to a total failure of consideration is without merit. Virgil v. Kapplin, 187 Ga. App. 206, 208 (3) (369 SE2d 808) (1988). As to his further contention that the debt evidenced by the security agreement is itself unenforceable, Davis waived any challenge to the validity of the underlying indebtedness in his promise of guaranty, rendering this claim irrelevant.

3. At the close of the evidence, the trial court granted a partial directed verdict in favor of CCC as to the commercial reasonableness of the disposition of the collateral, with the issue of damages remaining for jury determination. This ruling is enumerated as error.

The Uniform Commercial Code — Secured Transactions, OCGA § 11-9-101 et seq., provides the framework for any recovery of the balance of the purchase price after a secured party has repossessed and disposed of collateral securing the debt. Pursuant to OCGA § 11-9-504, a secured party after default may sell, lease, or otherwise dispose of any or all of the collateral. The secured party must account to the debtor for any surplus, and, unless otherwise agreed, the debtor is liable for any deficiency. Disposition of the collateral may be by public or private proceedings at any time and place and on any terms, but every aspect of the disposition including the method, manner, time, place, and terms must be commercially reasonable. Reasonable notification of the time and place of any public sale or of the time after which any private sale or other intended disposition is to be made shall be sent to the debtor. A guarantor of secured indebtedness, under a separate contract, also is a debtor within the meaning of OCGA § 11-9-504 (3) and is not bound by his own or the debtor’s pre-default waiver of the right to notice of disposition or pre-default waiver of the commercial reasonableness of any disposition of the collateral. Branan v. Equico Lessors, 255 Ga. 718, 722 (6), (7) (342 SE2d 671) (1986); OCGA § 11-9-501 (3). OCGA § 11-9-507 (2) provides definitive but not exclusive examples of commercial reasonableness: “If the secured party either sells the collateral in the usual manner in any recognized market therefor or if he sells at the price current in such market at the time of his sale or if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner. . . . A disposition which has been approved in any judicial proceeding or by any bona fide creditors’ committee or representative of creditors shall conclusively be deemed to be commercially reasonable. ...”

Should the debtor contest the reasonableness of the creditor’s actions, compliance with OCGA § 11-9-504 (3) is a condition precedent in an action to recover the difference between the contract price and the amount of the unpaid balance. Farmers Bank &c. v. Hubbard, 247 Ga. 431, 434 (276 SE2d 622) (1981); Branch v. Charlie Pike Chevrolet-Buick, 198 Ga. App. 672, 673 (2) (402 SE2d 544) (1991). If a creditor fails to give notice of an intended disposition of the collateral or if it conducts a commercially unreasonable sale of the collateral, the evidentiary presumption is raised that the value of that collateral is equal to the remaining indebtedness. Emmons v. Burkett, 256 Ga. 855, 857 (2) (353 SE2d 908) (1987). The creditor may rebut this presumption by introducing (1) evidence of the fair and reasonable value of the secured property, and (2) evidence that the value of the collateral was less than the debt. Business Dev. Corp. of Ga. v. Contestabile, 261 Ga. 886 (413 SE2d 447) (1992).

(a) One of the mining machines was never repossessed by CCC but was instead sold at auction by the trustee in Benafuels’s bankruptcy for $20,000. The proceeds of that sale were retained by the trustee as an asset of the bankruptcy estate and not distributed to CCC. Pursuant to OCGA § 11-9-507 (2), this disposition by the representative of creditors is conclusively deemed to be commercially reasonable, rendering immaterial the failure of CCC to notify Benafuels or Davis of any intent not to repossess and dispose of that collateral. Compare Carlton Mfg. v. Bauer, 207 Ga. App. 850 (1) (429 SE2d 329) (1993) (order of the bankruptcy court lifting automatic stay and permitting sale of collateral by secured party was not itself a stipulation as to the commercial reasonableness of any sale conducted pursuant to that order). The trial court correctly directed the verdict as to the commercial reasonableness of that disposition.

(b) As to the remaining two machines, notice of private sale was sent to Benafuels, Inc. Davis did not urge below and does not urge on appeal any issue of a purported failure to notify him personally as a guarantor entitled to the same notice as the debtor, nor does he claim that he did not have actual knowledge of CCC’s intentions as stated to Benafuels in those notices. The challenge to the commercial reasonableness of the private sales was sufficiently raised by Davis’s amended answer, which claimed that CCC had “not complied with the applicable provisions of Article IX of the Uniform Commercial Code with regard to the collateral.” Bales v. Central Bank & Trust Co., 204 Ga. App. 675 (420 SE2d 358) (1992). However, despite rigorous cross-examination of CCC’s expert witness as to the value of the collateral, Davis himself did not present any evidence or make any affirmative showing that the method, manner, time, place, or terms (other than possibly price) of the private sales were not commercially reasonable.

The unrebutted evidence of CCC showed the following: CCC retained the services of Watters, an experienced dealer in used heavy equipment to view, repossess, haul, clean, repair, store, appraise, and sell the collateral. Although the mining machines were not repossessed from the mine sites immediately upon Benafuels’s default, these delays were explained by the need to obtain electric power at one site, by a collision involving the trailer of one miner, and by snowy weather preventing egress from a steeply sloping pit. There is no evidence that these delays resulted in a diminished resale price at private sale or otherwise impaired the reasonable value of the collateral. Watters advertised the machines for sale through a monthly mailing list he had generated during his years in the business of selling used heavy machinery. This list had 350 subscribers among coal mining companies, other equipment dealers, and brokers and salesmen of such used equipment.

Watters gave his opinion of value at the time of repossession and testified how these values were derived. Pertinent factors in determining resale value included the condition of the coal market generally, the age and condition of the equipment upon repossession and after repairs, the suitability of a particular item for a prospective purchaser, and comparable sales. He appraised the smaller of the two machines as having a resale value of $20,000. That amount was eventually received as the cash price at private sale. Watters appraised the other machine at a value of approximately $30,000 to $35,000, upgraded by $10,000 after repairs. This machine sold for $45,000 at private resale, after CCC agreed to finance most of the purchase price. The net proceeds of the sales, after deducting sales commissions and the costs of repairs, hauling, etc., were approximately $16,000 and $36,000 respectively. There is unrebutted testimony that a willingness on the part of the seller to finance a portion of the purchase price will yield a higher amount than can be obtained through a strictly cash sale. On cross-examination of Mr. Watters, Davis elicited Watters’s statement that at the time of repossession, the collateral had no value except as salvage, assuming hypothetically that it could not be resold. This hypothetical would not, however, tend to impeach his direct testimony of value, derived after applying the factors noted above. Vigorous cross-examination was conducted about a stipulated value of the collateral in an agreement entered into during the pendency of Benafuels’s bankruptcy, that is, at a time after repossession but before trial. Watters explained that the value stipulated to in that work-out agreement (subsequently defaulted upon by Benafuels) was higher than his opinion of reasonable market value at the time of repossession.

As a broad rule, it is generally for the trier of fact to determine the commercial reasonableness of a private sale under OCGA § 11-9-504 (3). Ennis v. Atlas Fin. Co., 120 Ga. App. 849, 850 (1) (172 SE2d 482) (1969). Nevertheless, this issue of fact may be the appropriate subject for summary judgment or directed verdict. Ultimately, the commercial reasonableness of a sale of repossessed collateral may become a question of law: where the creditor shows prima facie that the sale was reasonable, the debtor must support his challenge by asserting specific facts showing a genuine issue remains for trial. Slaughter v. Ford Motor Credit Co., 164 Ga. App. 428, 429 (296 SE2d 428) (1982). “The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner.” OCGA § 11-9-507 (2).

CCC used an expert dealer to dispose of the collateral in a market for the type of goods at issue. This is a recognized method of disposition. White & Summers, Uniform Commercial Code, § 27-11 (3rd ed. 1988), citing Official Comment 2 to 9-507. There is no claim of fraud, harassment, overreaching, criminal conduct, or self-dealing in the actions taken on behalf of CCC during foreclosure. The uncontradicted evidence demands a finding that CCC came within the safe harbor provisions of OCGA § 11-9-507 (2): “If the secured party [disposes of the collateral] in conformity with reasonable commercial practices among dealers in the type of property sold[,] he has sold [it] in a commercially reasonable manner.” (Emphasis supplied.) See also Carter v. First Fed. &c. of Atlanta, 179 Ga. App. 532, 536 (5) (347 SE2d 264) (1986). The trial court correctly directed the verdict as to the commercial reasonableness of the method, manner, time, place, and terms of these two dispositions, while allowing the jury to determine the measure of damages based upon its own assessment of the fair and reasonable value of the collateral.

Decided July 16, 1993.

Lamberth, Bonapfel, Cifelli, Willson & Stokes, Gary D. Stokes, Stuart F. Clayton, Jr., for appellant.

Bisbee, Rickertsen & Herzog, William A. Dupree IV, for appellee.

4. Remaining enumerations have been considered and are found to be without merit.

Judgment affirmed.

Blackburn, J., concurs. Johnson, J., concurs in the judgment only.


author: Andrews, Judge.

text:
    A93A0591.
    CONERLY v. FIRST NATIONAL BANK OF BALDWIN COUNTY.
    (434 SE2d 143)
   Andrews, Judge.

Conerly appeals the grant of summary judgment to First National Bank of Baldwin County, “Bank,” in the Bank’s suit on a personal guarantee of a business note. Conerly further enumerates as error the dismissal of his amended counterclaim.

1. “To prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.” Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991). So viewed, the evidence was that on July 24, 1989, Real Estate Ventures, L.P. executed a promissory note with the Bank for $295,020. This note was executed for the limited partnership by its general partners, Real Estate West, Inc. by its president, Conerly, and REMCO, Inc. by its president, Glanton. In support of its motion for summary judgment, the Bank submitted the affidavit of Daniel, its president and CEO. Attached thereto is a photocopy of this note. The Bank required both Conerly and Glanton to personally guarantee this note by signing the guarantee on the back of the note. Attached to Daniel’s affidavit as Exhibit A is a copy of the front and back of the July 1989 note, and both signatures are present in both places.

Separate notes were signed as follows renewing this obligation: December 31, 1989, $295,020, signed by the limited partnership through its general partners, Real Estate West, Inc. (Conerly) and REMCO, Inc. (Glanton); June 29, 1990, $295,020, signed by the limited partnership through its remaining general partner, Real Estate West, Inc. (Conerly); and December 26, 1990, $312,741.20, signed by the limited partnership through its general partner Real Estate West, Inc. (Conerly).

Daniel’s affidavit reflects that the December 1989 renewal was also guaranteed by Glanton and Conerly, although the copy included in the record does not reflect the signature. Likewise, the June 1990 renewal was guaranteed by Conerly. The lack of signatures on the copies resulted from the Bank’s use of a carbon in the note which did not provide copies on the back page of the note form. Daniel did observe the signatures when made.

The December 1990 note and guarantee both bear the signature of Conerly and he acknowledges having signed both. This is the note upon which suit was filed and summary judgment granted. Daniel went to the offices of Conerly in Carrollton and requested that he sign the renewal and guarantee. While Daniel does not remember the date of the trip, Conerly placed it in March and both agree that the note was backdated to reflect the due date of the third renewal note. The Bank became aware in April 1991 that another creditor was foreclosing on some of the security supporting the note and called the note due based on this act of default. The bank account balance of the partnership was set off against the balance of the note and several outstanding checks were returned to the maker.

The Bank’s complaint was filed on June 4, 1991, naming Conerly, Real Estate West, Inc., and REMCO as defendants. Consent extensions were entered for the answer until September 20,1991. None was filed until October 7, 1991, when a handwritten “general denial” was entered for Conerly and Real Estate West, Inc., “West.” Then, on October 9, 1991, an amendment was filed by Conerly and West, adding affirmative defenses and a three-count counterclaim.

At the hearing on the Bank’s motion for summary judgment on July 28, 1992, counsel for the defendants announced that the three-count counterclaim had been withdrawn and an “amended counterclaim” filed. The new counterclaim, marked filed on July 27, 1992, asserted a claim for fraud and interference with business relations. The Bank filed its motion to strike the amended counterclaim dealt with in Division 3 below.

2. In support of its motion for summary judgment, the Bank submitted the affidavit of Daniel, including the signed guarantee of the first note, as well as the deposition testimony of Daniel. On his behalf, Conerly submitted his affidavit and deposition. Conerly’s own testimony shows that he acknowledged signing the original note and the last note and guarantee. With regard to his fraud defense, the Bank, by the positive testimony of Daniel and the photocopy of the original note and guarantee, demonstrated “the absence of evidence of fraud, thereby casting upon appellant the burden of presenting specific evidence giving rise to a genuine issue of triable fact. See Lau’s Corp. v. Haskins, [supra]. . . .” McCrimmon v. Tandy Corp., 202 Ga. App. 233, 235 (1) (414 SE2d 15) (1991). This, Conerly did not do. Nowhere in his affidavit or deposition does he unequivocally state that the signature on the original guarantee is not his. He has failed to create an issue of triable fact. Feely v. First American Bank of Ga., 206 Ga. App. 53, 55 (424 SE2d 345) (1992); see Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27, 29 (1) (343 SE2d 680) (1986).

Additionally, “ ‘[a] party to a contract who can read, must read or show a legal excuse for not doing so, and ordinarily if fraud is an excuse, it must be such fraud as would prevent the party from reading the contract. (Cit.) One cannot claim to be defrauded about a matter equally open to the observation of all parties where no special relationship or trust or confidence exists. (Cit.) . . . “Further, in the absence of special circumstances one must exercise ordinary diligence in making an independent verification of contractual terms and representations, failure to do which will bar an action based on fraud.” ’ Life Ins. Co. of Va. v. Conley, 181 Ga. App. 152, 153 (351 SE2d 498) (1986); [cits.]” Dunlap v. First Rock Credit Corp., 194 Ga. App. 563, 565 (2) (390 SE2d 919) (1990).

3. Conerly’s second enumeration alleges error in the trial court’s dismissal of his amended counterclaim based on the Bank’s motion to strike it.

Pursuant to OCGA § 9-11-13 (f), “[w]hen a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, he may by leave of court set up a counterclaim by amendment.” (Emphasis supplied.) Such a showing is mandatory. Adderholt v. Adderholt, 240 Ga. 626, 628 (1) (242 SE2d 11) (1978).

The second counterclaim filed here involved totally new theories, but were clearly compulsory counterclaims, being based upon the same facts as the underlying complaint and first counterclaim. Whether to allow such a filing, even upon a proper showing, is within the discretion of the trial court and will not be disturbed here absent abuse. Eudaly v. Valmet Automation &c., 201 Ga. App. 497, 498 (1) (411 SE2d 311) (1991); White v. Fidelity Nat. Bank, 188 Ga. App. 539, 540 (1) (373 SE2d 640) (1988). We find none.

Decided July 16, 1993.

Gary P. Bunch, for appellant.

Martin, Snow, Grant & Napier, John T. McGoldrick, Jr., Warren C. Grice, for appellee.

Judgment affirmed.

Pope, C. J., and Birdsong, P. J., concur.

       “GUARANTEE: By signing below, I unconditionally guarantee the payment of any amounts owned under this note and any security agreement will apply to me.”

       The additional amount represented the inclusion of interest payments which had not been received.

       The originals of the two interim notes, bearing the signatures, were marked “paid by renewal” and returned to the partnership.

       These counts were for slander and libel, improper setoff and dishonor, and breach of fiduciary duty.

       The alleged fraud was Daniel’s “material misrepresentation . . . that Conerly had guaranteed the Loan . . . and the two renewals of the Loan/

       We pretermit the issue of whether the first answer and the added counterclaim were in default. OCGA § 9-11-55 (a).


text:
    A93A0638.
    WOODS v. THE STATE.
    (434 SE2d 146)
   Andrews, Judge.

Woods was charged with and convicted of the offenses of burglary of an auto parts store, theft by taking of a 1988 Isuzu pickup truck from the property of the parts store, and theft by taking of less than $500 from the interior of the auto parts store.

Viewed in favor of the jury’s verdict, the evidence showed that the auto parts store closed for business at its regular hour of 6:00 p.m. on November 18, 1991. The store was left locked, with the company’s 1988 white Isuzu pickup parked outside in the parking lot, bearing the tag number RK2009. The truck was locked and the keys were on a hook located behind the customer counter inside the store. When the employees arrived the following morning around 7:30 a.m., the rear door was discovered with the lock broken and the door pried open. At the front of the store, two gum machines had been broken and the change removed from them. The three cash registers in the shop were usually left open, with only change remaining in them, in case of theft so they would not be destroyed. All of the change, less than $100, was missing from the registers. Further, the truck was gone, the keys having been removed from the hook.

E. A., a juvenile, testified that he was an acquaintance of Woods, an adult, and ran around with him. On the evening of November 18 and the early morning of November 19, Woods suggested that they go to the auto parts store to obtain some money. Woods and E. A. left the residence of Woods’ girl friend, Jacoway, and proceeded to the parts store. Woods used a hammer to break the lock and E. A. assisted in prying the door open with a pipe. Once inside the store, they threw the gum machines on the floor, causing them to break, and removed the change. They also took the change from the drawers. Woods obtained the truck keys and unlocked the truck. Woods and E. A. then left in the truck. Woods took E. A. home that evening and retained the truck. On the 21st of November, Woods and E. A. left the residence of Jacoway and proceeded from Rome, where the theft had occurred, to Bremen. At around 2:45 a.m. on the 21st, Officer Smith noticed the white truck proceeding slowly between a restaurant and a store. He noted the tag number RK2009. The officer began to follow the truck while checking the tag. While the officer could tell there were two individuals in the truck, he could not further describe them at that time. At the point when the officer turned on his blue lights, the truck pulled into a driveway, and the occupants both jumped out and ran. The officer pursued and caught the passenger of the truck, E. A. While he was subduing E. A., the other occupant returned to the truck and drove off. At that time, he could describe the occupant as a black male. E. A. identified him as Woods. At the time of E. A.’s apprehension, it was raining.

Jacoway was questioned by Officer Smith, at which time she implicated Woods. Further, Jacoway testified under oath at a hearing prior to the trial of Woods and again stated that he and E. A. had left her apartment on the evening of the burglary and theft, returning with a white pickup truck. She further stated that a couple of days later, Woods and E. A. again left and that early the next morning Woods returned alone to the apartment and he was wet. He told her that the police had stopped them, E. A. had been arrested, and he had hitchhiked back to Rome. The wrecked truck was later returned to the auto parts store.

At the trial, Jacoway testified, but stated that her earlier statements were lies. During the trial, she stated that Woods was home with her during all the pertinent times. At the trial, she acknowledged that Woods was the father of her then one-month-old child.

On cross-examination, Jacoway acknowledged having made her previous statements, but stated that they had been falsehoods.

1. In his first enumeration, Woods argues that the testimony of his accomplice, E. A., was not corroborated and that his motion for a directed verdict should have been granted.

In denying that motion, the trial court noted that pursuant to Gibbons v. State, 248 Ga. 858, 863 (286 SE2d 717) (1982), prior inconsistent statements are admissible as substantive evidence where the declarant takes the stand and is subject to cross-examination. Such was the situation here, and the prior inconsistent statement of Jacoway provided adequate corroboration of the statement of the accomplice. Loyd v. State, 202 Ga. App. 1, 2 (2) (413 SE2d 222) (1991). It was not error to deny the motion for directed verdict.

Decided July 16, 1993.

Shaw, Maddox, Graham, Monk & Boling, Virginia B. Harman, for appellant.

Stephen F. Lanier, District Attorney, C. Stephen Cox, Assistant District Attorney, for appellee.

2. The third enumeration argues that it was error to sentence Woods for both Count 1, burglary of the auto shop, and Counts 2 and 3, dealing with theft by taking of the change from inside the shop and the truck from outside the shop. It is urged that both of the theft by taking charges were lesser included offenses of burglary.

In his second enumeration, Woods is correct in arguing that he could not be convicted of two counts of theft by taking if they were committed at the same time and place and parts of one continuous criminal act. Hubbard v. State, 168 Ga. App. 778, 779 (2) (310 SE2d 556) (1983), cited in Bigby v. State, 184 Ga. App. 94 (1) (360 SE2d 751) (1987). McClinic v. State, 172 Ga. App. 54 (1) (321 SE2d 796) (1984). Woods is incorrect in urging that the burglary of the building and the theft by taking of the vehicle parked outside the building either merged factually or that the theft by taking of the truck constitutes a lesser included offense of the burglary of the building. Floyd v. State, 186 Ga. App. 777, 778 (2) (368 SE2d 541) (1988).

In conclusion, the theft by taking misdemeanor offense included in Count 3 relating to the money taken from inside the building must be vacated. The conviction on Counts 1 and 2 both stand.

Judgment affirmed in part and case vacated and case remanded with direction in part.

Pope, C. J., and Birdsong, P. J., concur.


author: Smith, Judge. Beasley, Presiding Judge, Blackburn, Judge,

text:
    A93A0712.
    EVANS v. THE STATE.
    (434 SE2d 148)
   Smith, Judge.

Jamal Grady Evans was tried before a jury and found guilty of selling crack cocaine, in violation of OCGA § 16-13-30 (b). He appeals from the judgment of conviction and life sentence entered by the trial court on the jury’s verdict of guilt.

1. Three policemen were called by the State. One of these three testified on cross-examination that he was on active duty. Appellant attempted to impeach this witness by asking him whether he was not actually on administrative leave pending an investigation of some unspecified misconduct. The trial court disallowed this questioning on the ground that any discrepancy was not material.

Assuming, without deciding, that it was error for the trial court to prohibit Evans from attempting to impeach this witness as to the complete truthfulness of his previous testimony under oath, such error was plainly harmless. It was not this witness but the other two who identified Evans as the seller. It is highly probable that the lack of this desired cross-examination did not contribute to the verdict. See Minter v. State, 258 Ga. 629, 630 (2) (373 SE2d 359) (1988). See also Brown v. State, 260 Ga. 153, 156 (4) (391 SE2d 108) (1990).

2. After the hearing mandated by Uniform Superior Court Rule 31.3, the trial court permitted the State to introduce into evidence two instances of “similar transactions.” These evidentiary rulings are enumerated as error.

In Williams v. State, 261 Ga. 640, 641-643 (409 SE2d 649) (1991), the Supreme Court outlined a three-pronged inquiry which must be satisfied before evidence of similar transactions may be admitted as an exception to the general rule excluding as irrelevant evidence that the accused has committed separate offenses. On appeal, Evans urges that his guilty pleas to a prior cocaine sale and a possession charge arising out of a prior attempt to sell cocaine were not sufficiently similar to warrant admission.

The true test of admissibility is not the number of similarities between the prior act and the act for which the accused is on trial, but whether the evidence of prior incidents is substantially relevant for some purpose other than to show that the accused was likely to commit the crime because he is a person of bad character. Bohannon v. State, 208 Ga. App. 576 (2b) (431 SE2d 149) (1993). The prior guilty plea to the charge of selling cocaine was substantially relevant to corroborate the identification of Evans as the seller here. Testimony by an eyewitness of his previous attempt to sell, which he broke off upon spotting a uniformed policeman, was substantially relevant to establish his guilty knowledge. The determination that such evidence is more probative than prejudicial is implicit in the trial court’s determination that the similar transactions are substantially relevant for an appropriate purpose. The trial court did not abuse its discretion in determining that these prior similar acts were sufficiently similar and substantially relevant for some appropriate purpose.

Judgment affirmed.

Pope, C. J., McMurray, P. J., Birdsong, P. J., and Andrews, J., concur. Beasley, P. J., Cooper and Blackburn, JJ., dissent. Johnson, J., not participating.

Beasley, Presiding Judge,

dissenting.

Defendant was charged with and convicted of unlawfully selling cocaine to M. Willis on April 19, 1991, in violation of OCGA § 16-13-30 (b). This is a criminal act which requires no specific intent, as distinguished from another crime prohibited by that same Code section, possession with intent to distribute a controlled substance.

The State offered as evidence of earlier transactions one incident of an interrupted apparent drug sale for which defendant pleaded guilty to possession and one incident of a cocaine sale. This was during its case-in-chief, and the stated purpose was to establish motive, bent of mind, intent to engage in the sale of cocaine, and course of conduct on the part of Evans. The court so understood the purpose of this evidence and admitted it over objection.

Evans did not testify. The defense was not that a drug sale did not occur, or that the substance sold was not cocaine, or that defendant did not intend to sell cocaine in the transaction, but rather that the State did not prove beyond a reasonable doubt that he was the person who engaged in the sale. He was arrested not on the spot but several months later, based on the buying police officer’s selection of his mug shot from a stack of photos a couple of inches thick at the police station about thirty to forty minutes after the transaction; it was about six photos down in the stack. There was no evidence that the officer ever saw Evans on any other occasion other than in court on this charge.

The court instructed the jury that it was to consider this evidence of other transactions “solely and only” to illustrate defendant’s state of mind, if the jurors thought this evidence did illustrate such. The court charged that the law allows such evidence “where motive, intent, bent of mind and course of conduct or other matters dependent upon a person’s state of mind are involved as material elements in the offenses (sic) for which he’s on trial.” It later added “identity,” although that was not a purpose for which it was offered or admitted.

Intent and state of mind were not in issue. The State simply had to prove that someone sold the substance cocaine and that someone was defendant. Defendant did not contest that such a sale had occurred but only that he was that someone; his defense was that the State had not borne its burden of proving his identity as the perpetrator.

Did the purpose for which the evidence was offered justify the exception to the general rule of admissibility articulated in OCGA § 24-2-2? It did not, because it was not necessary to prove the elements of the crime. The State failed to affirmatively show that the evidence was offered “not to raise an improper inference as to the accused’s character, but for some appropriate purpose.” Williams v. State, 261 Ga. 640, 642 (2b) (409 SE2d 649) (1991). See Hunter v. State, 177 Ga. App. 326, 327 (339 SE2d 381) (1985) (Beasley, J., dissenting).

Even if the stated purpose could be stretched into a necessary one, the prejudicial effect far outweighed the probative value. The pivotal issue, after all, was identity, not motive, intent, bent of mind, or course of conduct.

I am authorized to state that Judge Cooper joins in this dissent.

Blackburn, Judge,

dissenting.

I believe that the evidence of similar transactions was improperly admitted into evidence in this case, and for that reason I respectfully dissent.

The evidence at trial showed that on April 19, 1991, an undercover police officer, accompanied by an unnamed informant, went to an apartment complex on Washington Circle in East Point, where they approached the defendant and purchased $20 worth of crack cocaine. After the purchase, the undercover officer viewed mug shots at the police station and identified the defendant as the seller. (At trial, this officer also positively identified the defendant as the seller.) The defendant was not arrested until June 1991, after completion of the undercover operation.

The two “similar transactions” admitted by the trial court consisted of a conviction for possession of cocaine (and not an attempted sale, as characterized by the majority opinion) stemming from an incident in December 1986, and a conviction for selling cocaine arising from another incident in June 1987. The evidence pertaining to the December 1986 incident showed that a police officer observed the defendant standing next to a parked car talking with two women. When the defendant noticed the patrol car, he squatted down beside the parked vehicle and then walked away. The patrolling officer then approached the parked vehicle and found a bag of cocaine on the sidewalk where the defendant had squatted. The other incident also occurred on Washington Circle in East Point, and involved undercover police officers who approached the defendant and purchased a $20 bag of cocaine from him.

In Stephens v. State, 261 Ga. 467, 469 (405 SE2d 483) (1991), the Supreme Court reiterated that “[i]t is universally recognized . . . that ‘(t)he general rule is, that, on a prosecution for a particular crime, evidence which in any manner shows or tends to show that the accused has committed another crime wholly independent from that for which he is on trial, even though it be a crime of the same sort, is irrelevant and inadmissible.’ (Cits.)” Where a defendant has not placed his character in issue, proof of prior offenses or convictions is not admissible unless offered for some proper purpose, and not to show that the defendant is a person of bad character. Jones v. State, 257 Ga. 753, 757 (363 SE2d 529) (1988).

One exception to the general rule is that such evidence may be admitted for the limited purposes of showing bent of mind, identity, intent, motive, scheme, or course of conduct, if the defendant is identified as the perpetrator of the independent offenses and there is sufficient similarity between the independent offenses and the crime charged so that proof of the former tends to prove the latter. Williams v. State, 261 Ga. 640 (409 SE2d 649) (1991). However, “[i]t has long been the rule in Georgia that evidence of an independent crime is never admissible unless the prejudice it creates is outweighed by its relevancy to the issues on trial. [Cits.]” Robinson v. State, 246 Ga. 469, 470 (271 SE2d 786) (1980). See also Randall v. State, 207 Ga. App. 637, 638 (428 SE2d 616) (1993). “To insure that the evidence of similar transaction is not being introduced solely to raise an improper inference as to the accused’s character, we have repeatedly tested the similar transaction evidence for legal relevance; that is, to show that the legitimate purpose for which it is being introduced, such as intent, ‘identity, motive, plan, scheme, bent of mind (or) course of conduct, outweighs its prejudicial impact.’ [Cit.]” Adams v. State, 208 Ga. App. 29, 34 (430 SE2d 35) (1993).

In Jones v. State, supra, which provides a succinct historical perspective of the use and admissibility of character evidence in criminal proceedings, the Supreme Court demonstrated a concern that in recent years a criminal defendant’s character had been more easily injected into evidence. Jones recognized the exception of admitting evidence of similar crimes if offered for a valid purpose, but it appears that subsequent to Jones such evidence continued to be routinely admitted, without any in-depth evaluation, as showing one of the limited purposes delineated above. In Stephens v. State, supra, and Williams v. State, supra, however, the Supreme Court formalized the procedures and evidentiary standards which must be followed by the state and the trial court in order to admit evidence of similar transactions.

Specifically, the Supreme Court emphasized that before any evidence of independent offenses may be admitted, ilthe state must make three affirmative showings as to each independent offense or act it seeks to introduce. The first of these affirmative showings is that the state seeks to introduce evidence of the independent offense or act, not to raise an improper inference as to the accused’s character, but for some appropriate purpose which has been deemed to be an exception to the general rule of inadmissibility.

“The second affirmative showing is that there is sufficient evidence to establish that the accused committed the independent offense or act. The third is that there is a sufficient connection or similarity between the independent offense or act and the crime charged so that proof of the former tends to prove the latter. [Cit.] After the 31.3 (B) hearing, and before any evidence concerning a particular independent offense or act may be introduced, the trial court must make a determination that each of these three showings has been satisfactorily made by the state as to that particular independent offense or act.”. (Emphasis supplied.) Williams v. State, supra at 642.

Uniform Superior Court Rule 31.3 (B) and the above case law, particularly Williams v. State, supra, indicate that our courts should limit the scope of application of similar transaction evidence to the type of cases for which the exception was originally intended, i.e., where the state actually has some need for the evidence to prove bent of mind, identity, intent, motive, scheme, or course of conduct. Further, it should be emphasized that the procedures laid down in Rule 31.3 (B) and Williams v. State, supra, which were designed to protect against the improper admission of character evidence, are requirements and not mere recommendations. Neither the state, the trial court, nor this court may ignore or only partially follow that mandate of the Supreme Court.

In the instant case, following a hearing on the similar transactions evidence, the trial court employed a three-prong evaluation as set forth in Williams u. State, supra, and concluded that the evidence was admissible. The trial court’s analysis and application of the three-prong test, as far as it went, was not clearly erroneous. However, the trial court failed to address the additional requirement that the relevance of the evidence must outweigh the inherent prejudice it creates.

In presenting its argument for admitting the evidence, the state made no attempt to balance the relevancy with the prejudice. From my review of the record, I am unable to discern how the relevance of the evidence of the independent offenses outweighed the certain placement of the defendant’s character in issue. The state’s case-in-chief against the defendant was solid and uncomplicated. In some types of cases, such as those involving sexual offenses against children or other victims of diminished capacity, the state may have a great need for the similar transactions evidence to prove the current charges. See, e.g., Payne v. State, 207 Ga. App. 312 (2) (428 SE2d 103) (1993); Adams v. State, supra. However, the instant case presents no such need.

The majority opinion suggests that the required determination regarding the legal relevance of the similar transaction evidence is implicit in the trial court’s finding that the evidence was “substantially relevant for an appropriate purpose,” but that suggestion, if accepted, would eliminate the relevancy determination altogether. An explicit, and not an implicit, balancing of the relevance versus the prejudice is required. I also cannot accept the majority opinion’s attempt to demonstrate the relevance of the defendant’s prior convictions by pointing out that the conviction for selling cocaine was relevant to corroborate the identification of the defendant as the seller in the instant prosecution, and that the testimony regarding the other conviction for possession of cocaine was relevant to establish his guilty knowledge. In view of the testimony of the undercover officer positively identifying the defendant as the individual who sold the cocaine, there was no need to use the prior conviction for selling cocaine to establish the defendant as the seller in the instant case. Further, the testimony about the circumstances leading up to the defendant’s prior possession conviction may have established his guilty knowledge with regard to that prior offense, but it really had no pertinence to the current charge.

Decided July 16, 1993 —

Hendrick, Spanos & Phillips, Stephen M. Phillips, for appellant.

Lewis R. Slaton, District Attorney, Vivian D. Hoard, Charles W. Smegal, Assistant District Attorneys, for appellee.

Considering the relative simplicity of the state’s case-in-chief and the absence of any articulable need for the evidence of similar transactions, it appears that the state’s sole purpose for proffering this evidence was to achieve the impermissible implications regarding the defendant’s character. “The problem is that the evidence did not meet the overriding and more elementary prerequisites; it was not introduced to serve a valid purpose.” Hunter v. State, 177 Ga. App. 326, 328 (339 SE2d 381) (1985) (Beasley, J., dissenting). As such, the evidence was improperly admitted, and that erroneous admission of the evidence cannot be viewed harmless under the circumstances of this case. Stephens v. State, supra. Accordingly, I would reverse the defendant’s conviction.


author:
Cooper, Judge. Blackburn, Judge,
      Beasley, Presiding Judge,

text:
    A93A0755.
    McCHARGUE v. THE STATE.
    (434 SE2d 153)
   Cooper, Judge.

Appellant was convicted by a jury of theft by taking and appeals from the judgment entered on the verdict.

The evidence reflects that on June 24, 1992, the victim went to his boat shed to get his lawn mower and discovered that several of his fishing rods and reels were missing from his rod box. The victim reported the stolen items to the police and a report was filed. Within the next couple of days, the victim drove to a local pawn shop where he found the missing rods and reels. The owner of the pawn shop told the victim that appellant had brought the items in and received money for them. A witness for the State testified that he knew appellant as the brother of a friend of his. The witness stated that on June 24, he saw appellant walking along the side of the road and offered him a ride. Appellant had some fishing rods with him and told the witness that he wanted to go to a pawn shop. The witness took appellant to the pawn shop, and appellant took the fishing equipment inside and came out with money. Appellant testified at trial that he found the fishing rods by the side of the road and took them to a pawn shop because he needed the money.

Appellant contends that the trial court erred in not charging the jury in accordance with OCGA § 24-4-6 that “[t]o warrant a conviction on circumstantial evidence, the proved facts shall not only be consistent with the hypothesis of guilt, but shall exclude every other reasonable hypothesis save that of the guilt of the accused.” We have held that “[a] trial judge, even in the absence of a request, must charge the jury on the law set forth in [OCGA § 24-4-6] in those cases, which are wholly dependent on circumstantial evidence, [cit.]. . . .” Henderson v. State, 200 Ga. App. 200, 201 (2) (407 SE2d 448) (1991). Furthermore, the Supreme Court of Georgia has held that a charge on the law of circumstantial evidence must be given if requested where the State’s case depends in whole or in part on circumstantial evidence. See Robinson v. State, 261 Ga. 698, 699 (410 SE2d 116) (1991). The State’s evidence of appellant’s guilt was wholly circumstantial. The trial court’s charge as relates to circumstantial evidence was as follows: “Evidence may also be used to prove a fact by inference. This is referred to as circumstantial evidence. Circumstantial evidence is the proof of facts or circumstances from direct evidence from which you may infer other related or connected facts which are reasonable and justified in the light of your experience.”

The record also reflects that at a later point in the charge, the trial court charged the jury that if they should find that the crime of theft by taking had been committed, and if the defendant were found in recent possession of the stolen property, that would be a circumstance along with all the other evidence from which the jury could infer guilt “unless there should be from the evidence a reasonable explanation of the possession of such property consistent with a plea of innocence which is a question solely for you, the jury, to determine.” We cannot conclude, as does the dissent, that the charge given by the trial court was a sufficient restatement of OCGA § 24-4-6. Nor can we conclude, as the State urges, that there was only one reasonable explanation for appellant’s possession of the fishing rods inasmuch as appellant testified that he found the fishing rods by the side of the road. The jury was not adequately instructed that the State’s circumstantial evidence of guilt should “exclude every other reasonable hypothesis save that of the guilt of the accused.” Consequently, we hold that the trial judge’s failure to charge OCGA § 24-4-6 is reversible error and appellant is entitled to a new trial.

In light of our reversal, it is unnecessary to address appellant’s remaining enumerations of error.

Judgment reversed.

McMurray, P. J., Birdsong, P. J., Andrews and Smith, JJ., concur. Pope, C. J., and Blackburn, J., concur specially. Beasley, P. J., dissents. Johnson, J., not participating.

Blackburn, Judge,

concurring specially.

I agree with the majority opinion that the trial court’s jury charge on the law of circumstantial evidence was insufficient. Where the state depends entirely upon circumstantial evidence to prove the defendant’s guilt, the jury must be informed on the quantum of evidence which will authorize a conviction. The trial court’s jury charge failed to do so in this case.

1. The general law regarding circumstantial evidence is codified at OCGA § 24-4-6, which provides that “[t]o warrant a conviction on circumstantial evidence, the proved facts shall not only be consistent with the hypothesis of guilt, but shall exclude every other reasonable hypothesis save that of the guilt of the accused.” (Emphasis supplied.) This statute represents a codification of the rule requiring a charge on circumstantial evidence where the state’s case depends entirely upon circumstantial evidence, derived from Martin v. State, 38 Ga. 293 (1868); Carter v. State, 46 Ga. 637 (1872); and Simmons v. State, 85 Ga. 224 (11 SE 555) (1890), which were such cases.

2. If the évidence of the defendant’s guilt had been a mixture of direct and circumstantial evidence, a different rule would have applied. Based upon the three cases from which OCGA § 24-4-6 and its predecessor statutes were derived, it was originally intended to apply only to those cases that were based entirely upon circumstantial evidence. Subject to certain exceptions, subsequent cases held that the general rule is that unless the evidence relied upon for the conviction is entirely circumstantial, a jury charge under OCGA § 24-4-6 is not required. “Where . . . there is some direct evidence against the defendant, it is not error to fail to charge on circumstantial evidence.” Terrell v. State, 258 Ga. 722, 724 (373 SE2d 751) (1988).

However, this court has held that “if the only direct evidence comes from a witness who has been impeached, it is reversible error to fail to charge on circumstantial evidence upon request.” (Emphasis supplied.) Whittington v. State, 252 Ga. 168, 176 (313 SE2d 73) (1984); Horne v. State, 93 Ga. App. 345 (4) (91 SE2d 824) (1956). The theory underlying this rule was that where both direct and circumstantial evidence of the defendant’s guilt are admitted, and the jury is authorized to find that all the direct evidence in the form of witness testimony has been impeached, the jury is left to determine the guilt or innocence of the defendant based solely on the circumstantial evidence, and therefore must have some guidance on the quantum of circumstantial evidence which will authorize a conviction. See Green v. State, 167 Ga. App. 548 (306 SE2d 354) (1983).

In Robinson u. State, 261 Ga. 698 (410 SE2d 116) (1991), the Supreme Court found it impossible to determine whether the jury found the state’s witnesses had not been impeached and thus based its verdict on the direct evidence, or whether the jury found that the state’s witnesses had been impeached and thus based its verdict on circumstantial evidence (giving rise to a need for a jury charge on circumstantial evidence). To avoid such problems in the future, the Supreme Court devised the following rule: “[W]here the state’s case depends, in whole or in part, on circumstantial evidence, a charge on the law of circumstantial evidence must be given on request. This rule will apply whether or not the jury is authorized to find that the direct evidence presented by witness testimony has been impeached.” (Emphasis supplied.) Id. at 699-700.

The questions which must be answered in applying Robinson, are: what is the meaning of the word “depends” as used therein, and what charge on circumstantial evidence must be given, where a charge is required? It is only where the state’s case “depends” upon circumstantial evidence that such a jury charge becomes necessary. The State’s case “depends” upon circumstantial evidence only where such evidence is necessary to prove one of the essential elements of the offense for which the defendant is on trial. See Rash v. State, 207 Ga. App. 585 (5) (428 SE2d 799) (1993).

Robinson by no means requires a jury charge on the law of circumstantial evidence in every case in which some circumstantial evidence is adduced. See, e.g., Berry v. State, 262 Ga. 614 (422 SE2d 861) (1992), wherein the Supreme Court, citing Robinson, found no error in the trial court’s refusal to give a requested jury charge on circumstantial evidence that was not properly adjusted to the evidence in the case.

If the state depends upon a mixture of direct and circumstantial evidence to prove essential elements of the offense, no charge on circumstantial evidence is required absent c proper request to charge the law on circumstantial evidence adjusted to the facts of the case. There is no independent duty on the court to create and give a proper charge on circumstantial evidence, adjusted to the evidence of the case. It is only where the state relies wholly on circumstantial evidence that a charge on circumstantial evidence must be given without request. Gentry v. State, 208 Ga. 370 (66 SE2d 913) (1951); Campbell v. State, 202 Ga. 705 (44 SE2d 903) (1947). This rule has not been changed by Robinson.

Inasmuch as OCGA § 24-4-6, as written, applies only to cases in which the state depends entirely upon circumstantial evidence, where the state’s case against a defendant involves a mixture of direct and circumstantial evidence, it is not error for the court to refuse to charge said Code section. Indeed, to do so would mislead the jury, as OCGA § 24-4-6 provides, in part, “[t]o warrant a conviction on circumstantial evidence. . . .” (Emphasis supplied.) “If any portion of a requested charge is inapt, incorrect, misleading, confusing, not adequately adjusted or tailored, or not reasonably raised or authorized by the evidence, denial of the charge request is proper.” Harris v. State, 202 Ga. App. 618, 621 (414 SE2d 919) (1992); Hill v. State, 259 Ga. 557 (3b) (385 SE2d 404) (1989).

In summary, the rule regarding a jury charge on circumstantial evidence set forth in Robinson v. State, supra, applies only where the state relies upon such evidence to prove one of the essential elements of the offense for which the defendant is on trial. The current status of the law concerning charging the jury on circumstantial evidence can be stated as follows:

(a) Where the state relies wholly on circumstantial evidence to prove its case a charge on circumstantial evidence as provided by OCGA § 24-4-6 is required, without request from the defendant; (b) Where the state relies on a mixture of direct and circumstantial evidence to prove essential elements of the charged offense, a proper charge on circumstantial evidence adjusted to the fact of there being mixed direct and circumstantial evidence is required, upon proper request, without regard to whether or not the state’s witnesses may have been impeached.

In the instant case, it is undisputed that the evidence relied upon by the state to prove the defendant’s guilt was entirely circumstantial. Accordingly, a jury charge covering the principle contained in OCGA § 24-4-6 was required, so that the jury could determine whether the evidence authorized the defendant’s conviction. As noted by the majority opinion, one critical aspect of the law on circumstantial evidence is the requirement that the proved facts must exclude every other reasonable hypothesis save that of the defendant’s guilt. The trial court’s instruction that the jury could infer the defendant’s guilt from the circumstantial evidence “unless there should be from the evidence a reasonable explanation of the possession of such property consistent with a plea of innocence” did not adequately communicate that principle.

Viewed in the light most favorable to uphold the verdict, the evidence was sufficient to authorize a rational trier of fact to find the defendant guilty of theft by taking beyond a reasonable doubt. Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560) (1979). However, the trial court’s failure to give an adequate charge on the law of circumstantial evidence requires a new trial.

I am authorized to state that Chief Judge Pope joins in this special concurrence.

Beasley, Presiding Judge,

dissenting.

1. Appellant contends that the court did not sufficiently charge the jury on circumstantial evidence with respect to the principle in OCGA § 24-4-6 because it did not charge “that the jury could convict [him] upon circumstantial evidence only if the crime is proved beyond a reasonable doubt and to the exclusion of every other reasonable hypothesis.”

Appellant submitted requests to charge but did not request the language of OCGA § 24-4-6 or the principle embodied therein. He expressly reserved objections after the charge was given. The jury asked for an explanation of circumstantial evidence and the court obtained defendant’s approval before recharging them on direct and circumstantial evidence. The court repeated its earlier charge: “Evidence may be either direct, or circumstantial, or both. Direct evidence is the testimony given by a witness who has seen or heard the facts to which the witness testified. It includes exhibits admitted into evidence during the trial. It is that evidence which points immediately to the question at issue. Evidence may also be used to prove a fact by inference. This is referred to as circumstantial evidence. Circumstantial evidence is the proof of facts or circumstances by direct evidence from which you may infer other related or connected facts which are reasonable and just in the light of your experience.” No further clarification was requested by the jury or by defendant.

During the charge, the court had among other things also instructed on the presumption of innocence, its steadfastness unless overcome beyond a reasonable doubt, the State’s burden of proof beyond a reasonable doubt, alibi as a counter to the element of presence, and that guilt could be inferred, if the jury saw fit, from recent possession “unless there should be from the evidence a reasonable explanation of the possession of such property consistent with a plea of innocence, which is a question solely for you, the jury, to determine.”

The State’s witness McWilliams testified that as he was approaching the house of defendant’s brother in his truck near noon, he came upon defendant walking away from the house. Defendant had with him some fishing equipment and asked to be taken to a pawn shop in a town which was about 15 miles away. They drove first to the brother’s house, and then the three proceeded to the pawn shop. The defendant went in with the rods and reels and other articles and emerged with money. The pawn shop keeper testified that he bought the equipment, identified by the victim, from defendant that same day and that defendant said he had gone fishing but now needed money.

Defendant and his brother testified that McWilliams and defendant had been at defendant’s brother’s home early in the morning and had left to go to the store for beer. On the way defendant spotted some fishing equipment by the side of the road and had McWilliams stop for it. They took it back to the brother’s house and subsequently went to the pawn shop, where defendant sold it. Defendant had no idea it was stolen, did not know who it belonged to, and thought it had blown off a truck. He made no effort to find the owner and did not notify “lost and found” at the sheriff’s office.

All of the evidence of guilt was circumstantial. Although there was direct evidence that defendant was in possession of the fishing equipment, that he sold it, and that it was missing from the victim’s yard, none of this is direct evidence that defendant took it or did so with the intention of depriving the owner of it. These are the elements of the crime as charged in the indictment and by the court’s charge. OCGA § 16-8-2. (Of course, value is an element as related to punishment. OCGA § 16-8-12.) The evidence of guilt being entirely circumstantial, the court was required to give a proper charge on this subject, even without request. Gentry v. State, 208 Ga. 370 (2) (66 SE2d 913) (1951); Campbell v. State, 202 Ga. 705 (44 SE2d 903) (1947). The question is, was the charge proper?

A charge need not be given in the exact language requested, so long as the court correctly charges on the subject matter of the request. Burnett v. State, 240 Ga. 681, 687 (7) (242 SE2d 79) (1978). The same must hold true for charges which the court is required by law to give. In Burnett the language requested was not set out, but the Supreme Court found no error when the trial court charged instead: “ ‘Circumstantial evidence alone will not justify a finding of guilty unless the circumstances are entirely consistent with defendant’s guilt, wholly inconsistent with any reasonable theory of defendant’s innocence and are so convincing as to exclude a reasonable doubt of defendant’s guilt.’ ” This charge contains in other words the principle encompassed in OCGA § 24-4-6.

In Cook v. State, 185 Ga. App. 585 (1) (364 SE2d 912) (1988), the trial court did not give the requested OCGA § 24-4-6 or any other charge to the effect that the jury could not convict on circumstantial evidence unless “it” (the evidence) excludes every other reasonable hypothesis. The court recognized that the exact language of the Code section was not required but concluded that “there is nothing in this charge that warns the jury of the special limitations of circumstantial evidence.” Id. at 586. Charges on presumption of innocence and proof beyond a reasonable doubt were not enough.

The same question had arisen in Price v. State, 180 Ga. App. 215 (2) (348 SE2d 740) (1986), but the following charge was held sufficient, considering the jury instructions as a whole, and even more beneficial than a charge in the exact language of OCGA § 24-4-6: “[W]hen the facts in evidence and all reasonable deductions therefrom present two theories, one of guilt and the other consistent with innocence, justice and humanity of the law compel the acceptance of the theory that is consistent with innocence.” This two-theories charge has been criticized as going too far in defendant’s favor, beyond the concept embodied in OCGA § 24-4-6. See, e.g., Booker v. State, 156 Ga. App. 40, 42 (4) (274 SE2d 84) (1980), rev’d on other grounds 247 Ga. 74 (274 SE2d 334) (1981).

In Roman v. State, 155 Ga. App. 355, 356 (2) (271 SE2d 21) (1980), the court held that the trial court’s charge on circumstantial evidence was not burden-shifting. The charge in pertinent part was: “ ‘Circumstantial evidence alone will not justify a finding of guilty unless the circumstances are entirely consistent with the defendant’s guilt and wholly inconsistent with any reasonable theory of the defendant’s innocence and are so convincing as to exclude a reasonable doubt of the defendant’s guilt.’ ” Id. at 356. The court referred to this charge as a “restatement of [OCGA § 24-4-6].”

The instructions to the jury were sufficient to advise it of the principle articulated in OCGA § 24-4-6. The court made clear that there were two types of evidence, defined both, and warned of the limitation on finding guilt upon circumstantial evidence. It stated the caveat, the caution to prevent misinterpretation of the circumstantial evidence. The jury was instructed that it could not convict unless it excluded any “reasonable explanation” which was created.

The court’s instructions were tailored to the evidence. Defendant presented an explanation, that he found these seven reels and seven rods scattered out by the side of the road at a corner and had no intent to deprive the owner of them, whoever that was. “ ‘Where the defendant offers an explanation of circumstantial facts or an alternative hypothesis of events, the reasonableness of that explanation is for the jury.’ ” Singleton v. State, 194 Ga. App. 5, 6 (389 SE2d 496) (1989). The jury was instructed to test this theory of innocence and that if the jury found it to be reasonable, it would block the theory of guilt, which had to be proved beyond a reasonable doubt. As is required, “the charge given substantially and adequately covered the principle! ]” to be followed. Wright v. State, 199 Ga. App. 718, 721 (3) (405 SE2d 757) (1991). The trial court should not be faulted for rewording the principle so as to avoid use of the word “hypothesis,” which the average jury may have difficulty comprehending and applying.

Decided July 16, 1993.

John G. Walrath, for appellant.

Peter J. Skandalakis, District Attorney, Lisa R. Roberts, Assistant District Attorney, for appellee.

Looking at the charges in light of the evidence, the two competing theories, and the entire charge, Williams v. State, 249 Ga. 822 (3) (295 SE2d 293) (1982), a new trial is not required.

2. The majority concludes that in light of its holding that the charge was erroneous, the remaining enumerations need not be addressed. The assumption is that a new trial is mandated. However, four of them relate to the sufficiency of the evidence. No new trial would be authorized if the evidence addressed at the first trial would not support a conviction, under the Double Jeopardy Clause of the Fifth Amendment. Glisson v. State, 192 Ga. App. 409, 410 (385 SE2d 4) (1989).

       The crime is also committed when one, “being in lawful possession thereof, unlawfully appropriates” property of another, regardless of the manner in which it is appropriated. OCGA § 16-8-2. (Emphasis supplied.) It could be argued that defendant’s version constituted unlawful appropriation because he made no effort to find or return the seven rods and reels to the owner but immediately sold them, despite his professed belief that they had fallen off a passing vehicle and thus were not abandoned. The State did not travel on the theory of unlawful appropriation. Nor was this intended as an alternative theory in the indictment or in the court’s instructions to the jury. If it had been, there was direct evidence of it, i.e., defendant’s own testimony.