Case ID: iowa_46/html/0237-01.html
Source: Caselaw Access Project
Author: {"author": "Beck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Oskaloosa College v. Hickok.
    1. Promissory Note: indorsement. An indorsement upon-a note, to the effect that the maker may use the principal after maturity by the payment of interest semi-annually, does not release the maker from the obligation of payment.
    2. -: -: failure to pay interest. Upon the failure of the maker to pay the interest according to the terms of the indorsement, the principal of the note became due and payable.
    3. -: -: subsequent payment. The subsequent acceptance of interest would not entitle the maker to an extension of time of payment, the interest thus paid being merely a partial payment of the note.
    
      Appeal from Louisa Circuit Court.
    
    Wednesday, June 13.
    Action upon a promissory note of which the following is a copy:
    “ $25.00. . SCHOLARSHIP NOTE No. 148.
    “ Columbus City, Iowa, Eeb. 10,1868.
    “For valine received, I promise to pay in five equal installments, the first of which shall be due the first day of January, 1869, to the treasurer of Oskaloosa College or order, at Oskaloosa, Iowa, the sum of twenty-five dollars, with interest at the rate of ten per cent per annum till paid, payable annually on the first day of January — it being for the purpose of endowing the bible department in said college.
    “ (Signed,) A. I). Hickok.”
    The following indorsement appears upon the note: “ The giver of this note, if he desires, may use the principal after due by paying the interest annually.
    “N. E. Cart, Agent.”
    
    The cause" was submitted to the court, without a jury, and judgment rendered for defendant. The plaintiff appeals.
    
      Sprague c& Bileg, for appellant.
    
      Caldwell <& Waters, for appellee.
   Beck, J.

I. It may be admitted, as contended by defendant’s counsel, that the indorsement was a part of the original contract, and must be so regarded in construing the instrument.

II. But it cannot be held that the indorsement so changes the effect of the note as to release the obligation of defendant to pay the principal. The language of the indorsement indicates no such intention; on the other hand it unmistakably leads to the contrary conclusion. It permits the defendant to use the principal after due — to retain it upon the terms expressed. This indicates that plaintiff did not wholly surrender its right to the principal, but that defendant could withhold it. This, however, could be done only upon the terms expressed, namely, the payment of interest annually.

III. It cannot be doubted that if the conditions, upon which this stipulation of the contract whereby the defendant was to retain the principal was made to depend, were not performed by him, he could not claim its enforcement. He cannot violate his part of the contract and hold plaintiff to the performance of its agreement.

IV. Therefore, if the interest was not paid annually, as required by tbe contract, defendant cannot insist that tbe principal is not due according to the terms of the note. The evidence, -without contradiction, shows that defendant did not pay the interest, annually and made no tender thereof; lie admits this in his testimony. The principal of the note therefore became due and payable according to the .terms of the note.

Y. But it appears that the reason defendant did not pay the note is, that plaintiff demanded the installments and principal. This is no excuse for the defendant to refuse to perform or offer to perform his obligation. Because plaintiff claimed more than defendant agreed to do, he cannot be regarded as performing the contract, or be excused of its full performance, upon doing less.

YI. The defendant paid the interest before suit was commenced. But by his failure to pay the interest annually the note matured according to its terms and the indorsement became inoperative. The acceptance of interest afterward was only the acceptance of partial payment. The note having matured according to its terms, the defendant was entitled to no further extension of time.

Beversed.