Lewis v. Citizens & Southern Bank

Court of Appeals of Georgia

Lewis v. Citizens & Southern Bank

121 S.E. 524, 31 Ga. App. 597, 1924 Ga. App. LEXIS 83

CourtCourt of Appeals of Georgia

DecidedFebruary 9, 1924

Docket14722

StatusPublished

This text of 121 S.E. 524 (Lewis v. Citizens & Southern Bank) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Lewis v. Citizens & Southern Bank, 121 S.E. 524, 31 Ga. App. 597, 1924 Ga. App. LEXIS 83 (Ga. Ct. App. 1924).

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Opinion

Stephens, J.

1. Section 3426 of the Civil Code (1919), which provides that a’ contract to pay interest in excess of seven per cent, must be in writing, applies only to a contract containing, an executory promise to pay such excess interest, and - does not apply to a contract where such excess interest has been actually paid and such payment has been [598]*598accepted by tlie opposite party to the contract in consideration of the latter’s promise to extend the time of payment of the principal sum.

Decided February 9, 1924. Mundy & Watkins, for plaintiffs in error. Winfield P. J ones, W. E. Fielder, contra.

2. Where after the maturity of a note the debtor pays to the creditor a sum of money representing advance interest upon the principal at the rate of eight per cent, per annum for a definite period of time, in consideration of a promise by the creditor to extend the time of payment of the principal, this agreement, although not in writing, constitutes a valid contract between the parties, and, when made without the consent of the surety upon the note, operates to release and discharge the latter. Civil Code (1910), § 3543.

3. The ruling hero made is clearly distinguishable from that laid down in Ver Nooy v. Pitner, 17 Ga. App. 229. In that case there was no enforceable agreement between the principal debtor and the' creditor to extend the time of payment, but a voluntary indulgence of the debtor by the creditor, and acceptance from the debtor by the creditor from time to time of past-due interest.

4. In a suit by the creditor against the sureties, where such an alleged contract of renewal was pleaded by the defendants as a release, and the evidence authorized the inference that such a contract had been executed, an instruction to the'jui'y contrary to the principle above laid down was error, and the jury having found for the plaintiff, the court erred in overruling the defendants’ motion for a new trial.

Judgment reversed.

Jenlcins, P. J., and Bell, J., coneur.

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Stephens, J.

1. Section 3426 of the Civil Code (1919), which provides that a’ contract to pay interest in excess of seven per cent, must be in writing, applies only to a contract containing, an executory promise to pay such excess interest, and - does not apply to a contract where such excess interest has been actually paid and such payment has been [598]*598accepted by tlie opposite party to the contract in consideration of the latter’s promise to extend the time of payment of the principal sum.

Decided February 9, 1924. Mundy & Watkins, for plaintiffs in error. Winfield P. J ones, W. E. Fielder, contra.

2. Where after the maturity of a note the debtor pays to the creditor a sum of money representing advance interest upon the principal at the rate of eight per cent, per annum for a definite period of time, in consideration of a promise by the creditor to extend the time of payment of the principal, this agreement, although not in writing, constitutes a valid contract between the parties, and, when made without the consent of the surety upon the note, operates to release and discharge the latter. Civil Code (1910), § 3543.

3. The ruling hero made is clearly distinguishable from that laid down in Ver Nooy v. Pitner, 17 Ga. App. 229. In that case there was no enforceable agreement between the principal debtor and the' creditor to extend the time of payment, but a voluntary indulgence of the debtor by the creditor, and acceptance from the debtor by the creditor from time to time of past-due interest.

4. In a suit by the creditor against the sureties, where such an alleged contract of renewal was pleaded by the defendants as a release, and the evidence authorized the inference that such a contract had been executed, an instruction to the'jui'y contrary to the principle above laid down was error, and the jury having found for the plaintiff, the court erred in overruling the defendants’ motion for a new trial.

Judgment reversed.

Jenlcins, P. J., and Bell, J., coneur.

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Bluebook (online)

121 S.E. 524, 31 Ga. App. 597, 1924 Ga. App. LEXIS 83, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lewis-v-citizens-southern-bank-gactapp-1924.

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