Case Name: The Mayor and Council of Griffin, plaintiff in error, vs. The City Bank of Macon, defendant in error
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1877-01
Citations: 58 Ga. 584
Docket Number: 
Parties: The Mayor and Council of Griffin, plaintiff in error, vs. The City Bank of Macon, defendant in error.
Judges: 
Reporter: Georgia Reports
Volume: 58
Pages: 584–586

Head Matter:
The Mayor and Council of Griffin, plaintiff in error, vs. The City Bank of Macon, defendant in error.
1. Municipal bonds, having on their face many years to run, but issued and put in circulation with an indorsement upon each of them, to the effect, that in case default be made in paying any of the interest coupons at maturity, then, as a part of the contract, the bond itself shall become due and payable, are legally due, as to the whole of the principal, whenever a default in paying interest according to any of the coupons occurs. Time is of the essence.of the contract.
2. In other respects, this case is ruled by that of the Mayor and Council of Griffin vs. Inman, Swann & Co.
Negotiable Instruments. Contracts. Before Judge Hall. Spalding Superior Court. February Term, 1816.
A verdict having been rendered in favor of the City Bank of Macon against the Mayor and Council of Griffin for the principal and interest of the bonds sued on, the latter moved for a new trial upon the following, among other, grounds:
1. Because the court erred in charging the jury that if the defendant failed to pay the interest when the same became due, and was demanded, and there is on the back of said bonds a stipulation, that in the event of the failure to pay the interest, the bonds should become due and payable, then you should find a verdict for the amount of said bonds, with all interest due on the same.
2. Because the court erred in charging that the indorsement on the back of said bonds sued on was not a penalty, but was legal and valid, when it appeared in the evidence that if said indorsement was placed there, it was simply by a resolution of council on the minutes, and not by an ordinance duly adopted.
The motion was overruled, and the defendant excepted.
The facts, so far as material, will be found in the opinion.
As to the questions referred to in the second head-note, see 57 Ga. Rep., 370.
Speer & Stewart; R. H. Johnson, for plaintiff in error.
Boynton & Dismuke, for defendant.

Opinion:
Bleckley, Judge.
Having subscribed for stock in a railroad, the mayor and council, on the 20th of March, 1872, issued bonds of the city to discharge the subscription. On each bond was indorsed a resolution of the mayor and council, to the effect that, in case default should be made in paying any of the coupons at maturity, then, as a part of the contract, the bond itself should become due and payable. Each of the coupons was for a half year's interest, at the rate of seven per cent, per annum. The bonds, on their face, had many years to run — some of them twenty-nine years. They were payable to tbe railroad company or bearer, and were delivered to the company, having upon each of them, at the time of delivery, a copy of the resolution above mentioned. Certain of the bonds, some due at twenty-five years, some at twenty-seven, and some at twenty-nine years, became the property of the City Bank of Macon, and upon these default was made in paying the coupons which fell due in January and July, 1874, and in January, 1875, being the fifth, sixth, and seventh installments of interest. Suit was brought upon the over-due coupons, and upon the bonds themselves.
It was competent to make the terms specified in the resolution a part of the bonds; and this was effected by indorsing the resolution upon the bonds before they were put in circulation. Time thus became of the essence of the contract ; and, on failure to meet the interest promptly, a right of action accrued for the principal also. See 3 Kelly, 94; 7 Paige, Ch. R., 179; 54 Penn. State, 127 ; 15 Ill., 336; 4 Edw. Ch., 207; 28 Barbour, 29; 37 Ib., 60 ; 44 Ib., 336.
As to all further questions, this case is ruled by that of The Mayor and Council of Griffin vs. Inman, Swann & Co., 57 Ga. Rep., 370.
Judgment affirmed.