{ "id": 8681018, "name": "JANE D. HOUSTON vs. JOHN M. POTTS", "name_abbreviation": "Houston v. Potts", "decision_date": "1870-01", "docket_number": "", "first_page": "33", "last_page": "39", "citations": [ { "type": "official", "cite": "64 N.C. 33" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [], "analysis": { "cardinality": 547, "char_count": 11702, "ocr_confidence": 0.334, "pagerank": { "raw": 4.947487136851577e-08, "percentile": 0.3118915427115635 }, "sha256": "4eac8b5dcc4a16e7c7d98e126d635440e031a8ad94fc7c4af63a504c0d814826", "simhash": "1:902762aa7a52a20f", "word_count": 2144 }, "last_updated": "2023-07-14T17:28:35.890237+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "JANE D. HOUSTON vs. JOHN M. POTTS." ], "opinions": [ { "text": "Settle, J.\nThe plaintiff, Jane D. Houston, went to the house of the principal, R. C. Potts, who resided in the State of South Carolina, for the purpose of collecting money then due from him to her wards. The said principal being unprepared to pay the money at that time, proposed to execute his bond to the plaintiff, with his brother J. M. Potts, who resided in North Carolina, as surety. To this the plaintiff assented, upon the agreement between them that the said R. C. Potts would secure to her South Carolina interest, to-wit,: 7 per cent., -which, was the legal rate of interest in that State. In pursuance of this agreement, R. 0. Potts came to Mecklenburg county, North Carolina, and obtained the signature of his brother to the bond in question, and offered it to the plaintiff, who reminded him that she was to have \u201cSouth Carolina interest;\u201d thereupon R. 0. Potts wrote the words \u201cPleasant Valley, So. Oa.,\u201d at the head of the note, in order to carry out the contract made, several days before in South Carolina.\nThe principal, R. C. Potts, testifies that \u201cit did not enter his mind, nor did he he suppose that it entered the mind of the plaintiff, to evade the usury laws.\u201d Indeed he does not pretend that there was anything in the contract, or conduct of the plaintiff, to warrant the suggestion of fraud. It is evident, from his own testimony, that the other defendant J. M. Potts, signed the hondas surety for his brother, without regard to the defence which he now attempts to set up, for he cannot state whether the words \u201cPleasant Valley, So. Ca.\u201d were or were not upon the bond at the time he signed it. He states that he and his brother were both men of large means, and that he would not have hesitated to sign a much larger bond for his brother at that time, &c., but that he had no idea he was signing a seven per cent, note, because he was a magistrate and also a man of means, and could have borrowed money at six per cent, in Meck-lenburg.\nThis reference is made to the testimony of this defendant in order to show its unsatisfactory character, for taking all that he says to be true, it amounts to no defence in this action. He signed as surety for his brother who resided in South Carolina, and it mattered but little with him whether the bond bore 6 or 7 per cent., for he did not expect to pay either amount, as his brother was a man of \u201clarge means at that time.\u201d But the evidence shows this contract, to which he became surety, to have been made in South Carolina, and in the absence of any stipulations to the contrary, it must be governed by the lex loci contractus, in respect to interest and its other incidents. The addition of the words \u201cPleasant Valley, So. Ca.\u201d in this instance did not vary the terms of the contract. They amount to nothing more than was already implied by law.\nTake it that this contract, which had been made before in South Carolina with the express understanding that it was to be governed by the laws of that State, had never been reduced to writing until the day on which it was delivered to the plaintiff in North Carolina, still that circumstance would not change the law, or defeat the recovery in this case. So far then as B. C. Potts is concerned, he is clearly bound for South Carolina interest, and when J. M. Potts became his surety in North Carolina, it did not alter the locality of the contract with regard to interest.\nThe defendant contends that this case is to be distinguished from Arrington v. Gee, 5 Ire. 590, as here the money had been previously borrowed in this State, and the contract between the parties was only for a renewal of the security. But it must be borne in mind that the plaintiff went to the domicil of the principal, B. C. Potts, not to renew a debt, but to collect money then due her wards, and while in another State, was induced by that person to enter into a new contract, in which it was stipulated that it was to be governed in respect to interest by the laws of his domicil, thus making assurance doubly sure, by expressly contracting to do what the law already implied.\nWe consider the case of Arrington v. Gee, supra, directly in point, and as the learning on this subject is there collected, we deem it unnecessary to do more than refer to tljat case, and the authorities upon which it is based.\nIn this view of the case we have not thought it proper to decide a very interesting question which was pressed upon the argument, to-wit: the effect of our recent statute repealing the usury laws.\nHis Honor having intimated that he shonld instruct the jury upon the facts proved (and there appears to he no dispute about the facts which control this action) that the plaintiff could not recover, she submitted to a non-suit and appealed to this court.\nWe are of opinion that there is error in the ruling of his Honor. Let this be certified, &c.\nPee Cueiam. Error.", "type": "majority", "author": "Settle, J." } ], "attorneys": [ "Wilson and, Dowd, for the appellant.", "II. Barringer, contra." ], "corrections": "", "head_matter": "JANE D. HOUSTON vs. JOHN M. POTTS.\nThe plaintiff, a resident of this State, holding a note as guardian, against a person living in South Carolina, went to the house of her debtor in 1861, to collect the money, but whilst there was induced by this debtor to taire a new note, upon which he promised that the defendant, his brother, who resided in North Carolina, would become surety; and it was also agreed that South Carolina interest (7 per cent.) should be paid. Afterwards, in pursuance of this agreement, the debtor executed a note in the ordinary form, without express stipulation for interest, and the defendant also executed it as surety, in this State; upon its being presented by the debtor to the plaintiff,in this State, she reminded him of his agreement as to interest, whereupon, in order to give effect to that, he prefixed to the note, \u201cPleasant Valley, S. C:\u201d Suit having been brought against the surety, he pleaded Usury :\nHeld, that as the contract^had been made in South Carolina, the stipulation for seven, per cent, interest was not unlawful.\nAlso, that the prefixing of the words \u201cPleasant Valley, S. C.,\u201d did not materially alter the note.\n(Arrington v. Gee, 5 Ire. 590, cited and approved)'.\nDebt upon a bond, tried before Logan, J., at tbe January Special Term 1870, of Mecklenburg- Court.\nTbe defendant pleaded, General issue, Usury, and That tbe agreement between tbe principal in tbe bond and tbe plaintiff was a fraud upon himself as surety.\nPlaintiff introduced tbe bond as follows :\n$900. Pleasant Valley, S. O.\nOne day after date we or either of us promise to pay to Jane D. Houston or order, nine hundred dollars, for value received, as witness our hands and seals.\nR. C. POTTS. [seal.]\nJOPIN M. POTTS, [seal.]\nThe execution of the same by John M. Potts was also proved.\nJane D. Houston, the plaintiff, testified that she was the guardian of her two infant children, Abner and Mary J. Houston; and in that capacity held a note on R. C. Potts, the principal in the present bond; that she resided in Union county, near the South Carolina line, and said R. 0. Potts resided between two or three miles from her, in Lancaster district, S. 0.; that shortly before the present bond was given, she went to the house of said R. C. Potts, and requested payment of the note. He replied that if he could make collections he would come over and settle in a few days; but if he could not, he would give her a new note, with his brother, the present defendant, as surety. To this plaintiff assented, upon the agreement between them, that said R. 0. Potts would secure to her South Carolina interest. In a few days thereafter, R. 0. Potts brought to her, at her house in Union county, the note in suit, except that the words, \u201cPleasant Valley, S. 0.,\u201d were not upon it; that when the note was presented to her, she stated that it was all right, except she was to have South Carolina interest, and that should be specified in the note. R. C. Potts said it was not too late yet to make it so, and took up the pen and wrote at the top of the note, and as a part of it, the heading, \u201cPleasant Valley, S. 0.\u201d She thereupon took the bond, and gave a credit on the guardian note for $900 \u2014 it being agreed that the small balance should be settled by an accormt due from plaintiff to said R. 0. Potts.\nThe defendant introduced the Statute of South Carolina, fixing the rate of interest in that State at seven per cent.\nR. C. Potts, the principal in the bond, testified that plaintiff called upon him for a settlement of the note due to her as guardian, hut whether it was at his house or hers, he did not now recollect; that he promised to pay if he could make collections to do so; but if not, as his father was dead, he would give her a new note, with his brother John as surety. To which plaintiff replied, \u201cBut Robert, if I do that you must allow me South Carolina interest.\u201d To which witness agreed; that witness, a few days after, came up to Mecklen-burg county, N. 0., where the defendant, John M. Potts, then resided, and still resides, and got his signature to the bond as it was then drawn, without the heading, \u201c Pleasant Valley, S. C.;\u201d that he did not mention anything to him about the 7 per cent, interest, or in any way allude to it; that he took the bond thus signed by himself and defendant, to plaintiff, who, upon looking at it, remarked, \u201cRobert you promised me South Carolina interest,\u201d and thereupon witness wrote the caption upon the note, to effectuate that purpose. Witness further testified that he had no authority from the defendant to add the heading to the bond, nor did he communicate to him that he had so added it, until a short time before this suit was instituted; witness could, not recollect whether he wrote the body of the present bond, or signed it, in South or North Carolina, and it did not enter his mind, nor did he suppose it entered the mind of the plaintiff, to evade the usury laws.\nJohn M. Potts, the defendant, testified that his.brother brought the note to him, in Mecklenburg county, N. C., where he resided, and that he signed it; that he cannot state from his own recollection, that the words \u201c Pleasant Valley, S. C.,\u2019? were or were not upon it at the time; but that he had no idea he was signing a 7 per cent, note; that he was a magistrate at the time, and does not believe he would have signed it, especially as his brother as well as himself, at that time, were men of large means, and the money could have been borrowed without difficulty, in this county at six per cent.; he would not have hesitated to sign a bond much larger tiran this for Ms brother at that time. He also testified that he had no idea that any alterations or addition had been made upon the bond, until shortly before this suit was brought, and his brother, R. C. Potts, then told him about it.\nIn obedience to an intimation from the Court, the plaintiff submitted to a non-suit, and appealed.\nWilson and, Dowd, for the appellant.\nII. Barringer, contra.\nWhere a bill is accepted generally, and the drawer, without the consent of acceptor, adds words making it payable, at a particular place, this is a material alteration and discharges acceptor. Oowie v. Halsall, 3 Eng. Com. Law. 584, 3 Starlde 36, 4 B. & Aid. 197. Adding rate of interest in the margin, is a material alteration, and avoids note. War-rington v. Early, 75 Eng. C. L. 703, 2 E. & B. 763. Smith\u2019s Leading Oases, 1 vol. 489 Master v. Miller, and notes. The present case is directly the reverse of the case Arring-ton v! Gee, 5 Ire. 591, and the principle in that ease, makes the present contract usurious. The money had previously been borrowed in this State, and the contract between the parties, was only for a renewal of the security, and to substitute a new note in the place of the old one. Also see Broom\u2019s Comment, 376." }, "file_name": "0033-01", "first_page_order": 57, "last_page_order": 63 }