Floyd v. Candler

114 So. 344 | Miss. | 1927

^* Corpus Juris-Cyc. References: Alteration of Instruments, 2CJ, p. 1210; n. 20; p. 1213, n. 44; Appeal and Error, 4CJ, p. 851, n. 53; As to whether change in rate of interest is material alteration which will avoid note, see annotation in 35 L.R.A. 466; 1 R.C.L. 977; 1 R.C.L. Supp. 299; 6 R.C.L. Supp. 51. This suit is one to recover on a note for one thousand six hundred dollars dated October 21, 1924, due ninety days after date, with interest at eight per cent. per annum, payable to appellees, E.S. and M.A. Candler, and signed by appellants, John Floyd and G.R. Whittaker. When the note became due, the makers failed to pay it, and this suit followed.

At the trial, the signers of the note, the appellants, contested its collection on two grounds: First, that the note had been materially altered by the payees after its delivery, in that the payees had written a memorandum on the back of the note, reading, "Interest on this note reduced to six per cent on January 21, 1925, E.S. and M.A. Candler;" and, second, that the principal and interest in the note were forfeited by the payees, because the interest rate charged and collected by the payees from the makers was more than twenty per cent. as prohibited by law (section 2678, Code of 1906 [section 2223, Hemingway's 1927 Code]), which provides, in substance, that, where interest is contracted for, or received, in an amount greater than twenty per cent. per annum, the principal and all interest shall be forfeited.

The facts herein, very briefly stated, are that one of the appellants, John Floyd, applied to one of the appellees, M.A. Candler, to borrow, one thousand five hundred dollars for a period of ninety days, to meet an important emergency, and proposed to Candler that he would give him one hundred dollars in addition to the eight per cent. interest for the loan. Afterwards, when the note for one thousand six hundred dollars above referred to, was executed by the appellants, and the one thousand six hundred dollars turned over to them, they returned one hundred dollars to Candler as they had offered to do to procure the loan. The testimony of appellees is to the effect that Floyd paid Candler one hundred dollars as an agreed compensation for Candler having procured the loan for Floyd. Candler had to raise part of the money from his brother, E.S. Candler, and the evidence is, even though there may be conflict therein, that M.A. Candler received the one hundred dollars as compensation for obtaining the loan, and not as interest on the loan.

This question of fact was submitted to the jury, as to whether the one hundred dollars was paid as interest on the note, or was paid as compensation for procuring the loan, and the jury decided that the one hundred dollars was not paid as interest on the note, but was paid as compensation for procuring the loan; and we think that issue was properly submitted to the jury, and their finding of fact will not be disturbed by us.

As to the other proposition, that the note was vitiated because materially altered by changing the rate of interest by memorandum on the back of it, we do not think this memorandum on the back of the note reducing the rate of interest from eight per cent. to six per cent. is a material alteration of the note within the meaning of the Negotiable Instruments Law (Hemingway's Code 1927, sections 2739-2950). The memorandum written on the back of the note subsequent to its execution and delivery was not a material alteration of the original contract, because it was merely an independent, collateral agreement on the part of the payees, voluntarily made, and was no part of the note in the sense that it materially altered the original contract between the parties.

Therefore we hold that the note herein involved was not materially altered by the payees changing the interest in a memorandum on the back of it, and that the note is valid. 2 C.J., p. 1213, section 71, and section 44, p. 1198.

In view of these conclusions, we think the judgment of the lower court is correct, and must be affirmed.

Affirmed.