Court Opinion

ID: 5616216
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:18:42.984955+00
Date Added: 2024-06-11T08:37:15.556778
License: Public Domain

Bloodworth, J.
(After stating the foregoing facts.)
Section 3433 of the Civil Code (1910) provides that “When a payment is made upon any debt it shall be applied first to the discharge of any interest due at the time, and the balance, if any, to the reduction of the principal.” There is nothing in the note upon which suit was brought to take it out of this general rule. The 2d headnote in Linam v. Anderson, 12 Ga. App. 735 (78 S. E. 424), is as follows: “Where a note contains a condition that a failure to pay any installment of interest when due gives to the holder thereof the right, at his election, to declare the note due and payable, the acceptance of a payment on the principal of the note before the note is due does not, without ah agreement to that effect, prevent the holder from subsequently exercising the option above stated.” In the opinion in that case Chief Judge Hill (p. 737) said: “The second ground of the demurrer is that there was a change in the contract, because $500 had been paid on the principal of the note; in other words, that the payment of the $500 on the principal changed the original contract to the extent of eliminating therefrom the right to declare the principal due on a failure to pay any of the coupon notes when due. This ground of the demurrer is manifestly without merit. We fail absolutely to understand why, as a matter of law, payment of any part of a note before due, by mutual consent of the parties thereto, in any manner affects or alters the terms of the original note or the character of the contract. The only effect such payment could have would be simply to reduce the principal of the note in accordance with the payment made thereon.” In the ease under consideration the last payment'on the note prior to suit was made February 10, 1921. There was therefore due on May 24, 1921, the date when the first annual payment of interest was due, the interest that had accumulated on the remainder of the principal after applying the payments according to the provisions of the section of the code to which reference is made above, and the failure to pay this interest on May 24th, 1921, matured the note. The court erred in granting a nonsuit.

Judgment reversed.

Broyles, G. J., and Luke, <7., concur.