37 Ga. 384 | Ga. | 1867
The general rule as to the liability of a surety is forcibly expressed by this Court in Bethune vs. Dozier, 10th Ga. R., 238. Says Judge Lumpkin, in this case: “The undertaking
1. How what was the effect of this payment of interest, in advance ? “ Where a bond creditor, by agreement with his debtor, takes interest on his debt by anticipation, that will in effect be giving time to the debtor, and will discharge the surety; since a Court of Equity would restrain proceedings on the bond until the expiration of time for which the creditor had received interest on the bond.” White vs. Blake, 1 Y. & C. Exch. Cas., 420; 2 W. & T. Lead. Cas. in Eq., 2 Pt. top p. 362, (Ed. 1852). The very idea of payment of interest in advance presupposes that delay of the payment of the principal is to be given for the time. The payment of the interest is the consideration for an agreement implied from the transaction itself if not distinctly expressed, to give time on the principal. The general rule is that the reception of interest in advance upon a note is prima facie evidence of a binding contract to forbear and delay the time of payment; and no suit can be maintained, against the maker during the period for which the interest has been paid, unless the right to sue be reserved by the agreement of the parties. The payment of the interest in advance is not of itself a contract to delay, but is evidence of such a contract, and while this evidence may be rebutted, yet in the absence of any rebutting evidence it becomes conclusive. Crosby vs. Wyatt, 10th N. H. Rep., 318. There may be cases found conflicting with this rule, but we think this sustained by the better reason and adopt it.
2. The contract between Johnson and Cardwell for forbearance, then, being valid, and made without the assent of Saffold, necessarily released' the indorser from liability.
It is insisted, however, that while the general rule may be as here laid down, yet the peculiar phraseology of the note sued on takes this transaction out of the rule. The note is a
3. We have looked into the authorities and are satisfied that a contract to pay money at a subsequent period, with interest to be paid annually, and if the interest be not paid annually then the interest to become principal is a valid and binding contract, and will be enforced by the Courts. It is neither usurious, unconscionable nor contrary to public policy. If the interest be not paid when due, suit may be maintained to collect it. Some cases may be found where Courts of Equity have refused to carry into effect such contracts on the ground that they savor of usury; but the weight of modern decisions, as well, perhaps, as of the older ones at law, is in favor of the enforcement of such contracts. In LaGrange vs. Hamilton, 4 T. R., 612; when a sum of money was due by bond, with quarterly payments, and at the end of each year, the year’s interest due was to be added, and the credits then deducted, and the balance to remain as principal, it was held not to be usurious. This case was carried into the Exchequer Chamber in error, and affirmed. 2
We think the Court charged right in relation to the custom sought to be set up in favor of this private banker or broker.
We are not aware of any authority which will make the habits of dealing of an individual a part of the laws of the land. Under the facts of this case the jury very properly found in favor of the endorser.
Judgment affirmed.