Mississippi Power & Light Co. v. A. E. Kusterer & Co.

• Decision Date: 06 January 1930
• Docket Number: 28172
• Citation: 125 So. 429,156 Miss. 22
• Parties: MISSISSIPPI POWER & LIGHT CO. v. A. E. KUSTERER & CO
• Court: Mississippi Supreme Court

125 So. 429

156 Miss. 22

MISSISSIPPI POWER & LIGHT CO. v. A. E. KUSTERER & CO

No. 28172

Supreme Court of Mississippi

January 6, 1930

Division B

1 CORPORATIONS. Coupons reciting issuance as additional interest were not bonus as rcspected rights to redemption under provision of mortgage.

Additional interest coupons, reciting on their face that they were issued as additional interest on bonds, evidenced additional interest for use of money rather than a bonus to purchasers of bonds, as respected right of redemption under provision of mortgage authorizing redemption on any interest payment date.

2. CONTRACTS. Every word and part of contract should be given effect, if possible.

Every word and part of contract should be given effect, if possible, and made to operate according to the intention of parties thereto.

3 INTEREST. "Interest" is compensation for use or forbearance of money.

"Interest" is compensation allowed by law or fixed by parties for use or forbearance of money.

4. BONDS. Interest coupons attached to bonds are negotiable regardless of provision in respect thereto.

Interest coupons attached to bonds, even though they contain no provision that they are subject to separate negotiation from the bonds, nevertheless are so negotiable, but until detached and separately negotiated they serve no independent purpose.

5. BONDS. Interest coupons in hands of holders of bonds are mere incidents thereto, and have no greater effect than stipulation in bonds for payment of interest.

Interest coupons while in the hands of holders of bonds are mere incidents of bonds, and have no greater force or effect than stipulation in bonds for payment of interest, regardless of whether they are attached to or detached, in that they are mere evidence of existence of interest stipulated for in bonds.

6. BONDS. Holders of interest coupons, with notice that they were for additional interest, could not recover as for bonus, on theory coupons were negotiable.

Holders of additional interest coupons, with full notice by recitals of bonds and mortgage that coupons were for additional interest on bonds, were not entitled to recover as for a bonus, on theory that coupons were negotiable instruments and had been purchased by holder for value without notice.

HON. V. J. STRICKER, Chancellor.

APPEAL from chancery court of Hinds county, First district HON. V. J. STRICKER, Chancellor.

Suit by A. E. Kusterer & Co. against the Mississippi Power & Light Company. Decree for complainant, and defendant appeals. Reversed and rendered.

Reversed.

Agnes C. Tufverson, of New York City, and Green, Green & Potter, of Jackson, for appellant.

A contract as a whole will be looked to and its meaning determined from the entire instrument; every word therein used must be given effect, if possible, and made to operate according to the intention of the parties.

Lampkin v. Heard, 137 Miss. 523, 102 So. 565; Copiah Hardware Co. v. Johnson, 123 Miss. 684, 86 So. 369; Shapleigh v. Spiro, 141 Miss. 38, 106 So. 209, 44 A.L.R. 393.

The subject of interest is one of statutory creation. Interest was not allowed by common law.

Eastin v. Vandorn, Walker Rep. 215; Taylor v. Benham, 46 U.S. 233, 5 How. 233, 12 L.Ed. 130; Jackson v. Whitfield, 51 Miss. 205; Railroad v. Adams, 78 Miss. 895, 20 So. 996; Homer v. Kirkland, 25 Miss. 96.

Until negotiated or used in some way, interest coupons serve no independent purposes; and while they are in the hands of the holder they remain mere incidents of the bonds, and have no greater or other force or effect than the stipulation for the payment of interest contained in the bonds; and while they remain in the ownership and possession of the owner and holder of the bonds, it can make no difference whether they are attached to or detached from the bonds, as they are then mere evidences of indebtedness for the interest stipulated in the bonds.

Bailey v. County of Buchanan, 115 N.Y. 297; Elliot on Contracts, 3578, 7 C. J. 50; 3 R. C. L. 846.

Appellees being charged by law with notice that herein sought to be recovered is interest, may not when principal has been paid on a callable obligation therefore now sue.

These coupons are payable either in Illinois or New York; hence, the laws of those states should control.

Lienkauf Banking Company v. Haney, 93 Miss. 613, 46 So. 628.

If, the coupons refer to the bond, this charges the holder with notice of their provisions and of any provisions in the bond as to the maturity of the bond or of the coupons.

Elliot on Contracts, 3587; Grant v. Ry. Co., 89 N.W. 60, at 63; Gullford v. Ry. Co., 48 Minn. 560, 51 N.W. 658, 31 Am. St. Rep. 694; Belleville Savings Bank v. Southern Coal & Mining Co., C. of Errors and Appeal, 173 Ill.App. 250 at 252-6; Boley v. St. R. R. Co., 64 Ill.App. 305; Seibert v. Minn. & St. L. Ry. Co., 52 Minn. 246; Reitz v. Pontiac Realty Co., 293 S.W. 382; Coal Co. v. Coal & Mining Co., 194 Mo.App. 598, 186 S.W. 1152; Belleville Savings Bank v. Southern C. & M. Co., 173 Ill.App. 253; St. Louis Cartersville Coal Co. v. Southern Coal & Mining Co., 186 S.W. 1152; McClelland v. Norfolk Southern R. Co., 110 N.Y. 469, 18 N.E. 237, 1 L.R.A. 299, 6 Am. St. Rep. 397; Brinsmade v. Johnson, 179 S.W. 967.

If there were no express contract therefore the right to sue for interest contract would not exist when the principal was paid.

Yazoo & Miss. Valley R. R. Co. v. Craig, 71 So. 561; McClelland v. Norfolk Southern R. R. Co., 110 N.Y. 469, 1 L.R.A. 299; Clark v. Iowa City, 87 U.S. 20, Wall 583, 22 L.Ed. 427; Bailey v. County of Buchanan, 115 N.Y. 297, 6 L.R.A. 562; City v. Lamson, 70 U.S. 477; Wailes v. Cooper, 24 Miss. 228; Parker v. Foy, 43 Miss. 266; Kennedy v. Green, 3 My. & K. R. 719; Ploughby, 1 Gallison, 41; Hinds v. Vattier, 1 McLain, 128; Carr v. Hilton, 1 Curtis C. C. Rep., 393.

Alexander & Alexander, of Jackson, for appellee.

The bonus notes are negotiable instruments. They are payable to bearer and their negotiability is recognized, authorized and encouraged by their own provisions.

Section 2757, Hemingway's Code.

Coupons where payable to bearer and carrying no provisions making them nonnegotiable paper are negotiable.

Section 1051, Fletcher Cyc. of Corp.

A reference in the coupons to the fact that they are given for interest, does not affect their obligation.

Taylor v. Curry, 109 Mass. 36; Union Ins. Co. v. Greenleaf, 64 Me. 123; Barker v. Valentine, 10 Gray (Mass.) 341; White v. Haight, 16 N.Y. 310; Bresee v. Crumpton, 121 N.C. 122, 28 S.E. 351; Pendleton v. Knickerbocker L. Ins. Co., F. 169; Markey v. Corey, 108 Mich. 184, 36 L.R.A. 117, 62 Am. St. Rep. 698, 66 N.W. 493; Strand Amusement Co. v. Fox, 87 So. 332.

The negotiability of coupons is not affected by the fact that they are, by their terms, declared to be for interest upon bonds specified by their numbers.

Everettson v. National Bank, 66 N.Y. 14.

Coupons when severed from the bonds are negotiable and pass by delivery. They then cease to be incidents of the bonds and become in fact independent claims; they do not lose their validity if for any cause the bonds are canceled or paid before maturity; nor their negotiable character; nor their ability to support separate securities; and the amount at which they are issued draws interest from its maturity. They, then, possessed the essential attributes of commercial paper:

Clark v. Iowa City, 20 Wall. 583, 22 L.Ed. 437; Smith v. Nelson, 212 F. (C. C. A.) 56; Fidelity Mutual Life Ins. Co. v. Wilkes Barre, etc., Railroad Co., 98 N.J. 507, 120 A. 734; Jones Company v. Guttenburg, 66 N.J.L. 666.

The bond and the coupons are not parts of one debt, they are separate debts and may be held by different persons and suit on the one should not bar suit on the other.

Mack v. American Tel. Co., 79 N.J. 109; 9 C. J. 50; Jones v. Guttenburg, 66 N.J.L. 666, 51 A. 274; Mack v. American Tel. Co., 79 N.Y. Law 109, 74 A. 263; Fidelity Mut. Life Ins. Co. v. Wilkes-Barre & H. Co., 120 A. 734; Dickerson v. Wilkes-Barre & H. R. Co., 124 A. (N.J.) 512 (1924); Lovett v. Lessler, 132 A. 77 (1926); Colton v. Depew, 60 N.J.Eq. 454, 46 A. 728, 83 Am. Rep. 650; Chancellor v. Seiberlich, 75 N.J.Eq. 501, 72 A. 948; Mack v. Tel. Co., 79 N.J.L. 109, 74 A. 263; Fidelity Ins. Co. v. Wilkes-Barre R. R., 98 N.J.L. 507, 120 A. 734; Dickerson v. Wilkes-Barre R. R., 124 A. 512; Lovett v. Lessler, 132 A. 77; Fidelity Mutual Co. v. Wilkes-Barre & H. R. Co., 98 N.J.L. 507, 120 A. 734; Levy v. A. City & S. R. Co., 135 A. 974.

Argued orally by Garner W. Green, for appellant, and by Julian P. Alexander and J. C. Satterfield, for appellee.

OPINION

Anderson, J.

Appellee, a corporation under the law of the state of Michigan, filed its bill in the chancery court of Hinds county, against appellant, a Maryland corporation, to recover the sum of one thousand seven hundred five dollars, with interest, being the face value of certain coupons described in the bill, held by appellee against appellant. The chancery court acquired jurisdiction through foreign attachment by virtue of the fact that appellant was a nonresident corporation, with property in Hinds county in this state. There was a trial on bill, answer, and proofs, resulting in a decree in appellee's favor for the amount sued for; and from that decree appellant prosecutes this appeal.

On June 7, 1920, the Jackson Public Service Corporation executed and delivered to the Chicago Trust Company, corporate trustee and W. F. Hopkins, individual trustee, a mortgage, which was duly recorded in the office of the chancery clerk of Hinds county, where the property conveyed in mortgage is situated, to secure a principal amount of three million dollars of bonds then issued by the Jackson Public Service Corporation. Each of...