Case ID: rob_7/html/0539-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Bullard, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Honoré Bacchus v. Manuel Moreau.
    Where it is stipulated in a notarial act of sale that the purchaser may postpone the payment of a note given by him for the price for a certain time after maturity, on paying interest annually in advance, and the obligor states on the face of the note, which was executed at the same time as the act of sale, that lie reserves to himself the right to postpone the payment for the stipulated time, the note and the act must be construed together, and be considered as proving a contract that the principal shall not be exigible until the time to which it was agreed that payment might be postponed, on the payment of interest annually ; and the failure of the maker to pay the interest due for any year, will not operate as a forfeiture of the right to delay the payment of the principal, no such penalty being expressed, or implied. The holder of the note has only a right of action, at the commencement of each year, for the interest due.
    
      A stipulation in an act of sale that the purchaser may postpone the payment of the principal for a certain time, on paying interest at six per cent annually in advance, is not usurious or illegal.
    Appeal from the District Court of the First District, Buchanan, J.
    
    
      Michel, for the plaintiff.
    Bodin, for the appellant,
    contended, that the stipulation requiring the interest to be paid in advance was usurious : that it is equivalent to exacting interest upon interest, which is expressly-forbidden by art. 1934 of the Civil Code. Such a stipulation cannot be assimilated to the discount of a note. Discount, says Merlin, verbo, Intéréts, § 3. p. 522, is where a debtor pays before the term allowed him by the contract, when he may retain the interest for the term that is to elapse before the maturity of the debt. The stipulation in this case for interest in advance, is very different.
    “ L’intérét,” says Pardessus, Droit Comm. vol. 2. p. 297, « ne peut etre perg,u $ avance par le preieur, par voie de retenue sur la somme comptée a Vemprunteur ; paree que, Vintérét n'étant que le prix de V usage et en quelque sor te, le fruit civil de Vargent, ne peut étre du d’avance <fcc. The authority given by law to banks on the subject of interest, may be considered as an exception to the general law on the subject.
    The defendant has not been put in mora. 14 La. 37. 1 Rob. 131. 3 Rob. 403.
   Bullard, J.

In this case it appears, that the appellant, Moreau, purchased of Bacchus certain real property for seven thousand dollars, of which five thousand were paid in hand. For the remaining two thousand he gave his note payable at the office of the Parish J udge of the parish of Jefferson, two years after date, with interest at six per cent from maturity, and on the face of the note the obligor says: “I reserve to myself to postpone payment for five years.” The payment is secured by mortgage on a part of the property sold ; and in the act of sale there is a stipulation to the effect, that if the purchaser shalL think proper to postpone the payment of his note for five years from its maturity, he may do so, on paying upon the amount of the note an annual interest of six per cent, payable at the beginning of each year, to the vendor, or any bearer of the'note upon his receipt.

The note was protested upon maturity, payment' of it having been demanded at the office of the Parish Judge; and thereupon, the plaintiff took out an order of seizure, which was enjoined upon the ground, that the defendant had a right to renew the note according to the stipulation in the act, on the payment of the interest in advance, which he alleges he has always been ready to pay, and which he deposited in court.

The injunction was dissolved, and the defendant appealed.

The record shows, that on the 18th of April, about three weeks after the note fell due, Moreau wrote to Bacchus, that knowing that his note was to fall due on the 27th of the preceding month, he had looked for him in order to pay him the interest upon $2000, which he owed him.

It appears to us, that the expression on the face of the note, “ I reserve to myself to postpone payment for five years,” was an acceptance of the offer to do so, on the payment of interest each year in advance. The act itself left to the defendant the option to pay at maturity, or to postpone the payment of the principal sum for several }mars, on the payment of the interest at the commencement of each year. Having made his election, as expressed on the face of the note, it became an agreement between the parties, that the principal should not be exigible until after five years, on the payment of interest at the commencement of each year. The note and the notarial act being construed together, may well be considered as proving such a contract ; and it is tantamount to a note payable five years after date, with the interest payable and exigible each year, at its commencement. The question then is, whether the failure of the maker to pay the second year’s interest, operates as a forfeiture of the term, or right to delay payment ? We are of opinion that it does not. No such penalty is expressed ; and, in our opinion, it is not implied from the nature of the agreement itself. A right of action accrued to the holder of the note to recover each year, at its commencement, the year’s interest, independently of the principal. The payment of the interest being secured by mortgage, as well as the principal, an order of seizure and sale might be issued to make the same out of the mortgaged premises.

It is, therefore, adjudged and decreed, that the judgment of the District Court be reversed; and ours is, that the injunction be reinstated, reserving to the appellee the right to take out of court the year’s interest deposited, and to proceed for another year’s interest, which has since fallen due, and successively as the same may hereafter fall due, if not punctually paid ; and it is further ordered, that, the plaintiff pay all the costs, except those incurred before the deposite of the money in court, and that those be paid by the appellant. 
      
       The act and note were executed on the same day, and the former paraphed, by the notary, to connect it with the act of sale, in which a mortgage was reserved to secure its payment.