Linam v. Anderson
| Decision Date | 20 May 1913 |
| Docket Number | 4,459,4,615. |
| Citation | 78 S.E. 424,12 Ga.App. 735 |
| Parties | LINAM et al. v. ANDERSON (two cases). |
| Court | Georgia Court of Appeals |
Rehearing Denied June 10, 1913.
Syllabus by the Court.
The demurrer to the petition was without merit.
Where a note contains a condition that a failure to pay any installment of interest when due gives to the holder thereof the right, at his election, to declare the note due and payable, the acceptance of a payment on the principal of the note before the note is due does not, without an agreement to that effect, prevent the holder from subsequently exercising the option above stated.
Where a note provides for the payment of 10 per cent. on principal and interest as attorney's fees in the event the note is placed in the hands of an attorney for collection, on giving the statutory notice the plaintiff would have the right to recover this amount as attorney's fees, although the note had not matured by lapse of time, but had been declared due by the plaintiff, according to its terms, on failure to pay an installment of interest when due.
When a plea in abatement is demurred to on both general and special grounds, and the trial court renders a judgment thereon in the following language: "This demurrer is sustained and the plea in abatement is stricken"--this judgment will be construed as applicable only to the questions raised by the general demurrer, and the questions raised by the special demurrer will be regarded as not adjudicated. The allegations of the plea in abatement, setting up that the plaintiff had made an agreement with defendants, in consideration of the payment by them of $500 on the note before the same was due to waive the condition of the note giving the right at the election of the holder to declare the note matured upon a failure to pay any installment of interest when due, were sufficient to withstand a general demurrer.
A condition in a promissory note that, in the event any of the "interest coupons, or any part thereof, remain unpaid for the space of thirty days after the same shall have become due and payable, then the entire principal, with all arrearages of interest, shall immediately become due and collectible, at the option of the holder of this note," and a condition in a deed given to secure the payment of the note that "if any of said interest coupons should not be promptly paid at its maturity, or should any tax or assessment accruing against said property become delinquent or liable to have execution issued therefor, then and in either of said events said principal note, together with all arrearages of interest thereon, shall at once become due and collectible at the option of the holder thereof," are not in conflict. But even if so, the condition of the note would prevail, and in the present case the principal note was declared due and collectible under the condition above referred to as set out in the note.
The allegations made by the answer were wholly irrelevant and immaterial, setting forth no defense whatever to the suit on the note, and therefore the answer was properly stricken on demurrer.
The evidence demanded the verdict as directed; and the judgment entered thereon, both in form and substance, was in accordance with the pleading and the proof.
(Additional Syllabus by Editorial Staff.)
A plea in abatement, alleging that the suit was prematurely brought being a dilatory plea, was too late when not filed until after the lapse of three terms.
T. O. Hathcock and J. E. Golightly, both of Atlanta, for plaintiffs in error.
Moore & Pomeroy, W. W. Hood, and R. P. Jones, all of Atlanta, for defendant in error.
This was a suit brought by Mrs. Laura D. Anderson against the defendants as makers of a promissory note; it being alleged in the petition that the defendants were indebted to the petitioner on said note in the principal sum of $10,500, that the original principal sum of the note was for $11,000, but that defendants had paid $500 of the principal, which payment was credited on the note, leaving the balance of the principal due $10,500. It was also alleged that the defendants were indebted to the petitioner in the sum of $420 as interest on said principal sum up to February 23, 1912; that defendants had executed and delivered to petitioner interest coupon notes representing the interest to be earned upon the principal note; that the coupon note for $420 sued on was originally for the sum of $440, but that the payment of $500 on the principal had reduced the interest represented by this coupon note to the sum of $420. The principal note with the coupon note are made a part of the petition. It is also alleged that, according to the note and the deed to certain real estate therein described, which was given to secure the payment of the note, and the interest coupons, time was of the essence of the contract, and that a failure to pay any of the interest coupon notes when due, or to pay the taxes when due on the real estate described in the security deed, would result in the holder of the note having the option of declaring the whole principal due, and that the defendants had failed to pay the interest coupon note maturing February 23, 1912, and had likewise failed to pay the state and county taxes on the property described in the security deed referred to, for which reasons the principal note became due and was payable; and therefore suit is brought to recover the principal and the coupon note due February 23, 1912, and also 10 per cent. of the principal and interest as attorney's fees, under the stipulation of the note and the deed alleging that the statutory notice had been duly given as to attorney's fees. A demurrer was filed to the suit, which being overruled, exceptions pendente lite were preserved. Defendants also filed what was called a plea in abatement. This plea in abatement was demurred to generally and specially. The trial judge sustained the demurrer and struck the plea, and this judgment was excepted to. The rulings in the lower court on the demurrer and on the plea in abatement were brought to this court by direct bill of exceptions. Subsequently the case was reached for trial on the merits in the lower court. A motion was made to strike the answer, and (there being no offer to amend after time had been allowed for amendment) the motion was sustained and the answer stricken; and thereupon a verdict was allowed against the defendants and in favor of the plaintiff, and judgment entered accordingly for the various sums sued for. To the judgment striking the answer and to the final judgment entered in the case, a writ of error was sued out to this court. Both cases are here now for review, and will be considered together.
We will endeavor to take up the questions raised by both records and decide them in the order in which they were made in the court below.
First, as to the demurrer. The first ground of the demurrer is that the petition sets forth no cause of action. This being a plain suit on a promissory note, and containing all the allegations essential in such a suit with copies of the note and of the security deed (a part of the same contract) attached to the petition as exhibits, it is manifest that this ground of the demurrer is without merit.
The second ground of the demurrer is that there was a change in the contract because $500 had been paid on the principal of the note; in other words, that the payment of the $500 on the principal changed the original contract to the extent of eliminating therefrom the right to declare the principal due on a failure to pay any of the coupon notes when due. This ground of the demurrer is manifestly without merit. We fail absolutely to understand why, as a matter of law, payment of any part of a note before due, by mutual consent of the parties thereto, in any manner affects or alters the terms of the original note or the character of the contract. The only effect such payment could have would be simply to reduce the principal of the note in accordance with payment made thereon; and in the present case the payment of $500 reduced the principal of the note from $11,000 to $10,500 and also necessarily reduced in proportion the amount of the outstanding coupon notes.
The third ground of the demurrer is that the interest coupon due February, 1911, has been paid, and no judgment is prayed against defendants on said coupon note. We do not see the relevancy or materiality of this ground of the demurrer. It is true that the coupon note due February, 1911, had been paid, and therefore no judgment is asked for as to this, but why this fact should furnish any reason in law why the plaintiff would not have the right to declare the principal due upon the failure to pay a subsequent coupon note according to the contract is not apparent.
The fourth ground of the demurrer is that attorney's fees are recoverable only where the defendants fail to pay the note at maturity, and that the condition of the contract relating to the failure to pay interest...
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