Carroll County Savings Bank v. Strother

Citations

• 28 S.C. 504
• 6 S.E. 313
• 1888 S.C. LEXIS 77

Syllabus

<p>1. A note given to T for the purchase money of an engine, and payable to him, was discounted by B for value, T, together with F and L, guarranteeing the payment of the note when due; but F and L were strangers to the original contract, and received no benefit from the discount of the note. Held, in action by B against F and L that defendants should be permitted to show a failure of consideration in the note itself, as such failure would relieve them of liability under their guaranty.</p> <p>2. The judge having directed a verdict, this court considered an alleged error as to which no instruction to the jury was asked for.</p> <p>3. In an action on a guaranty of payment indorsed upon an unnegotiable instrument, it is not necessary in order to fix the guarantor’s liability to prove demand of payment from the principal debtor, and notice to the guarantor of non-payment, nor the use- of due diligence in pursuing the principal by legal process. Will the same rule apply to the guaranty of a negotiable instrument? Cases fully considered and reviewed.</p> <p>4. A note is not negotiable where it (1) contains a stipulation for the payment of “all counsel foes and expenses in collecting this note if it is sued or placed in the hands of counsel for collection or (2) gives to the payee “full power of declaring this note due at any time they may deem this note insecure, even before the maturity of the same or (3) promises to pay the amount named with exchange added.</p> <p>5. A provision in a note for the payment of usurious interest after maturity rests upon the same consideration as the other provisions of the note.</p> <p>6. Where a note stipulates for the payment of illegal interest after maturity “as agreed for negotiating and carrying this loan so long as it remains unpaid,” this stipulation cannot be construed as intended to operate only as a penalty to enforce prompt payment, but it is usury.</p> <p>7. This note being usurious as to the maker, it is also usurious as to