Bradley, Wheeler & Co. v. Asher

Ellison, J. Plaintiff sued the defendants, Asher, as makers of a promissory note and the defendant lumber and hardware company as indorser thereof to plaintiffs. The defendants demurred to the plaintiff’s petition and the demurrer being overruled, they stood on the same and appealed to this court. The grounds of demurrer were: First. That the petition did not' state facts sufficient to constitute a cause of action; and, second, that the petition disclosed that the court had no jurisdiction of the subject-matter of the action. The point made on the last ground was that the amount of the note was $50, and that, under the statute, section 3318, Amended Laws, 1891, page 106, it is provided that the circuit court has no original jurisdiction in cases on promissory notes, unless the sum demanded, exclusive of interest and costs, shall exceed $50. The petition declares that the makers “promised for value received to pay to the order of the Grant City Lumber Company and Hardware Company, one year after-date of said note, the sum of $50, with interest at the rate of eight per cent per annum, payable annually, to become as principal and bear the same rate of interest,” etc. ’ The prayer of the petition was: “Wherefore, plaintiff prays judgment against defendant for said sum of $50 and interest thereon at [593] the rate of eight per cent per annum from the date of said note, and for costs of suit and for all other proper relief.” The plaintiff’s contention is that his note does exceed $50, exclusive of interest, and he seeks to sustain such contention on the idea that since the note reads that if the interest was not paid annually, when due, it should become part of the principal and bear the same rate of interest. But this can not alter the patent fact that all additions to the original amount of the note came by way of interest, as earned by the principal sum. Though it is stated in the note that the unpaid interest shall become a part of the principal and bear the same rate of interest, it was evidently so stated merely for the purpose of compounding the interest and did not alter the indisputable fact that the additions to the original sum were interest additions. So that, therefore, when you exclude the interest earned, it leaves $50, a sum not within the original jurisdiction of the circuit court. Monks v. Strange, 25 Mo. App. 12. It may well be doubted whether under our present statute, differing as it does from statutes of 1845 and 1855, interest- can be made a part of the principal. Interest is a creature of the statute and under section 5977, Eevised Statutes, 1889, it is provided that-“parties may contract in writing for the payment of interest upon interest; but the interest shall not be compounded oftener than once a year.” Formerly the statute authorized a contract that the interest should become a part of the principal, but not so now. So that it may reasonably be said that the statutory interest is only allowable as such. But, however this may be, we are satisfied that the object and intent of the statute was to fix the principal sum, upon which, as a foundation, the interest is built, as the test of the jurisdiction. [594] 2. The note was indorsed to this plaintiff, the indorsement containing the words: “Protest waived.” We are of the opinion that this, under the case of Bank v. Lowe, 47 Mo. App. 151, was a waiver of all the steps necessary to fix the liability of the indorser. But since, as we have seen, the circuit court had no jurisdiction of the case, the judgment will be reversed and cause dismissed. All concur.