98 Ga. 24 | Ga. | 1895
The official report states the facts.
1. The question as to whether the contract to pay the principal of a promissory note and the contract to pay interest thereon are so united as to be incapable of separate assignment and enforcement in the hands of separate holders, we are now for the first time in this State called upon' to determine:
"We know of no principle of law which is violated by such an arrangement, and can see no reason why it should not be allowed; While the contract to pay interest is dependent upon the contract to pay principal, it is also in a certain sense independent. They may be made to stand for execution at different times. The agreement to pay interest may be void for usury, and yet the ágreement to pay principal remain unaffected. By agreement between the parties, the principal may be discharged and the accrued interest still remain due, and vice versa. So it would seem that the right to demand an enforcement of the one is not dependent upon the enforcement of the other; and hence we can see no good reason why the holder of a promissory note cannot retain title to it and give or sell the increment of interest to another, so as to retain to himself the right to* collect the principal and vest in that other the right to* collect the interest, and vice versa. If this be true, then one may well be pledged without the other. Nor does the fact that actual delivery of the evidence of indebtedness is essential to the validity of the pledge, affect the principle stated, as the one evidence of indebtedness may well represent several obligations to pay. The quality of separability between principal and interest is recognized in many classes of cases, notably in case of bonds bearing interest, with coupons attached representing the accruing interest. So if in the* one case principal and interest are separable, they are not so indissolubly connected as- to be incapable of dissociation. That the contract to pay principal and interest may be
2. The promissory note sued on in the present case was made payable at the expiration of ten years from its date, •but contained a stipulation that if the accruing interest were not paid at stated times, the entire debt should immediately become due. The principal of the note was pledged before any instalment of interest became due, and the accruing interest with the right to collect the same was reserved by the payee. When an instalment of interest became due, the payee extended to the «drawer time within which to pay the interest beyond that stipulated in the note, and thereafter the pledgee brought suit for the principal debt, alleging that it had matured by reason of the non-payment of interest to the payee. A plea in abatement was filed upon the ground that the suit was premature, and this