Cooper v. Hocking Val. Nat. Bank

• Decision Date: 08 June 1898
• Citation: 50 N.E. 775,21 Ind.App. 358
• Parties: COOPER et al. v. HOCKING VAL. NAT. BANK.
• Court: Indiana Appellate Court

21 Ind.App. 358

50 N.E. 775

COOPER et al.

v.HOCKING VAL. NAT. BANK.¹

Appellate Court of Indiana.

June 8, 1898.

Appeal from circuit court, Hendricks county; John V. Hadley, Judge.

Action by the Hocking Valley National Bank against George B. Cooper and others. There was a judgment for plaintiff, and defendants appeal. Affirmed.

Henry H. Mathias, Silas A. Hays, and Frank D. Ader, for appellants. B. F. Corwin, A. I. Vorys, and Brill & Harvey, for appellee.

HENLEY, C.

This was an action brought by appellee upon a promissory note payable at a bank in this state. The note was executed and delivered by appellants to McLaughlin Bros., as a part of the purchase price of a stallion purchased by them from said McLaughlin Bros. The payees, before the maturity of the note, indorsed it to the appellee. This action was commenced in Marion county, but afterwards the venue was changed to Hendricks county, where the appellants filed an answer consisting of five paragraphs. Appellee replied to the second, third, fourth, and fifth paragraphs of answer. Appellants' demurrer to the third paragraph of appellee's reply was overruled. There was a trial by jury, and a verdict in favor of appellee for $1,118.23, for which amount the court rendered a judgment in favor of appellee. Appellants moved for a new trial. This motion was overruled. The necessary steps were then taken by appellants to perfect an appeal to this court.

Errors are assigned in this court as follows: (1) The complaint does not state facts sufficient to constitute a cause of action. (2) The court erred in overruling the demurrer of appellants to the third paragraph of the appellee's reply. (3) The court erred in overruling the motion of appellants for a new trial.

Appellants' counsel do not discuss the first error assigned. In discussing the second specification of the assignment of errors, counsel for appellants say: “Was the note, at the time of the indorsement, governed by the law merchant? If it was, then the third paragraph of the reply states facts sufficient to avoid the several defenses set up in the paragraphs of answer to which it was directed.” The third paragraph of reply plainly avers that appellee purchased the note before maturity, and was a bona fide purchaser for value, and without notice. From this it will be seen that the material question then is, was the note governed by the law merchant? It is contended by counsel that the note, while negotiable under the law merchant at the time of its execution, did not retain its commercial character at the time it came into appellee's hands, because the interest thereon was, by the terms of the contract, payable annually, and, no interest having been paid, the note was dishonored, and lost its commercial character thereby. At the time of the purchase of the note by appellee, two installments of interest were due and unpaid. We do not believe it would serve any good purpose to enter into a discussion of the reasons for or against the rule that interest is an incident of the debt, and that the...