Strickland v. Bank of Cartersville
| Decision Date | 23 April 1914 |
| Docket Number | 287. |
| Citation | 81 S.E. 886,141 Ga. 565 |
| Parties | STRICKLAND ET AL. v. BANK OF CARTERSVILLE. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
Where a debtor and creditor entered into a contract by which the creditor agreed to delay the collection of the debt upon compliance with two distinct conditions, he will not be prevented from proceeding to enforce the indebtedness if one of the conditions is not complied with, although the other may be performed.
Where a creditor agreed with his debtor to delay enforcement of the debt, provided the debtor should make a certain payment, keep certain property insured, pay taxes, etc., and also on condition that certain notes of a third person, which were deposited by the debtor as collateral security, should be paid promptly at maturity, if there was a departure from the exact terms of the contract as to the payment of taxes and insurance premiums at the times when they became due mutually acted upon as satisfactory, the creditor may not have been authorized on that ground alone to proceed to collect the debt without first giving notice to the debtor that he must thereafter strictly comply with the terms of the contract on that subject. But where there was no waiver of the requirement that the notes deposited as collateral security should be promptly paid, upon failure of such payment the creditor was not prevented from proceeding to enforce the debt.
(a) The allegations of the amendment to the answer did not show a waiver or mutual departure from the terms of the contract in regard to the requirement of prompt payment of the collateral notes.
Under the ruling in Strickland v. Lowry National Bank of Atlanta, 140 Ga. 653, 79 S.E. 539, that bank was a necessary party to the proceeding to enforce the security created by the deed given to it and to the present plaintiff.
(a) Where the objection for nonjoinder of a necessary party was made in the verified answer filed at the first term, and on demurrer the presiding judge erroneously held in effect that the Lowry National Bank of Atlanta was not a necessary party such ruling on the merits of the question will not be affirmed by this court on the contention that the point should have been raised by plea or demurrer, rather than by the answer, or that the paragraph of the answer which raised the question did not contain a prayer for abatement. The ruling of the court went to the merits of the question. These contentions go to the form in which it was made.
Where to a suit on a promissory note the defendants pleaded that the attorney who had represented the plaintiff in connection with the transaction, and who was also a director of the plaintiff bank, had interfered with or obstructed efforts on their part to borrow the money to meet certain of the indebtedness held by the bank, on which they were liable, but the allegations failed to show that the attorney in so doing was acting within the scope of his employment, or that he had any authority from the bank to do the acts complained of such allegations were properly stricken on demurrer.
(a) The mere fact that one who commits a tort is a director in a corporation does not, without more, render the corporation liable therefor.
(b) As a general rule, a tort cannot be set off against a suit on a contract.
Under the statutes of this state, if a different rate of interest is not expressed in a contract, the legal rate is 7 per cent. It is not unlawful to contract to pay interest at a rate not exceeding 8 per cent.; but any rate above 7 per cent., to be collectible, must be specified in writing; and in no event can it exceed 8 per cent.
(a) If a promissory note on its face bore interest at the rate of 6 per cent., and, after it fell due and was unpaid, the holder announced its intention to proceed to enforce collection, and in consideration of a delay in so doing the makers of the note agreed in parol to pay 8 per cent. interest thereon instead of 6 per cent., and a delay for some two years was thus obtained, and during that time interest was paid at the rate of 8 per cent., such payments were valid, and the interest paid in excess of 6 per cent. could neither be recovered by the makers of the note, nor thereafter applied as a credit on the principal of the note, at their option.
In connection with the evidence tending to show a parol agreement on the part of the makers of the note to pay 8 per cent. interest, instead of 6 per cent., the obtaining of delay by reason thereof, and the actual payment of 8 per cent. interest, there was no error in admitting in evidence a resolution passed by the directors of the bank, directing the cashier to call the loan at once, or secure a written agreement from the makers and indorsers to pay 8 per cent. from the 1st of the preceding January, where there was evidence tending to show notice of such resolution to the makers of the note, and their agreement to pay 8 per cent. in order to secure delay in the enforcement of the debt, although no written agreement was made as to the increased interest, and although it was not calculated at the increased rate prior to the agreement.
Where, some two years after the making of such parol agreement, one of the makers of the note entered into a written contract with the holder, by virtue of which he deposited certain notes, falling due monthly, as collateral for this and other indebtedness, and agreed to make a certain cash payment (which was made), and to pay certain taxes and insurance premiums, and the holder of the note agreed that, if the conditions of the contract were complied with, the time for payment would be so extended as to discharge the indebtedness by the payment of the collateral notes as they matured, and where the contract so made contained no provision for paying the increased rate of interest, and the evidence showed that the time of payment of the note now in suit was extended upon the consideration of the written contract, that contract superseded the parol agreement to pay 8 per cent. interest upon the note instead of 6 per cent.; and after it was made, the holder of the note, upon receiving payments under the contract, was not authorized to apply them partly to payment of interest thereafter accruing on the note at the increased rate.
Under the special facts of this case, there was no error in charging that the plaintiff was entitled to recover 10 per cent. attorney's fees on any amount which should be found due upon the note.
Error from Superior Court, Bartow County; Price Edwards, Judge.
Action by the Bank of Cartersville against Albert Strickland and another. Judgment for plaintiff, and defendants bring error. Reversed.
In an action on a note, providing for 10 per cent. attorney's fees, held not error, where there was no conflicting evidence on the subject, to instruct that plaintiff was entitled to such fees.
The Bank of Cartersville brought suit, in Bartow superior court against Albert Strickland and George W. Brooke on a promissory note dated Atlanta, Ga., February 10, 1906, due six months after date for the principal sum of $7,500, with interest at 6 per cent., signed by the defendants and payable to the order of the Etowah Milling Company. On this was an indorsement in the following terms: "For value received * * * hereby guarantee the payment of this note at maturity," signed by the payee. There were also indorsements showing payment of the interest to March 2, 1911. It was alleged, in brief, as follows: The defendants paid the interest on the note at the rate of 6 per cent. per annum to June 30, 1907. On or about the first Tuesday in July of that year the plaintiff told the defendants that it could no longer carry the note at the rate of 6 per cent. per annum, and would have to collect such note unless the defendants paid interest at the rate of 8 per cent. per annum. In order to induce the plaintiff to carry the note and not collect it, the defendants agreed to pay interest at the rate of 8 per cent. per annum, and have so paid it from June 30, 1907, to March 2, 1911. Had it not been for such promise and agreement and the payment of such interest, the plaintiff would not have carried the note, but would have collected it, which was well known to the defendants. More than 10 days prior to the bringing of the suit the plaintiff gave to the defendants written notice of its intention to sue on the note, with a description thereof, and the term of court to which the suit would be brought, and the date of convening of such court. Other notes were given for a part of the purchase money of the property, and were purchased by the Lowry National Bank of Atlanta, Fulton county, Ga., and to secure the payment of the note in suit and the other notes the Etowah Milling Company executed and delivered on February 10, 1906, to the plaintiff and the Lowry National Bank a deed conveying to them the property in the proportion of an undivided three-tenths interest to the plaintiff, and an undivided seven-tenths interest to the Lowry National Bank. On February 10, 1906, the Etowah Milling Company executed and delivered to Strickland and Brooke a bond for title, obligating itself to convey to them the property known as that of the Etowah Milling Company upon payment of the purchase price by them; and on June 25, 1907, Strickland and Brooke transferred the bond for title to the plaintiff to secure the payment of the note now sued on, and all other indebtedness due by the defendants, as indorsers or otherwise, for Riverside Milling & Power Company. By virtue of the deed from the Etowah Milling Company to the plaintiff and the Lowry National Bank, the plaintiff has a special lien to secure the payment of the note sued on, superior to all other liens, upon an undivided three-tenths interest...
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