Matthews v. Ormerd

Appeal from the judgment and from an order denying a new trial.

The action is to foreclose a mortgage given to secure a note dated September 25, 1893, for five thousand five hundred dollars, due in one year, with interest at the rate of one per cent per month. The answer admits all the allegations of the complaint, except the allegation that no part of the principal *Page 85 has been paid, and sets up another instrument, in writing, which, it is averred, — and so the court found, — was executed by the mortgagee and delivered to the mortgagors at the same time the note and mortgage were executed, and as part of the same transaction. The writing is as follows: —

"Whereas, Henry and Mary Jane Ormerd, of San Diego, California, have this day, by their attorney in fact, Jeremiah Browell, executed to me their note and mortgage for the sum of $5,500.00, payable in one year, with interest at one per cent per month, now, this is to certify that I will only exact upon said note and mortgage interest amounting to eight per cent per annum, and I agree to refund to said parties all interest paid me by them over and above eight per cent per annum after I have out of said one per cent per month paid the mortgage tax. "H. MATTHEWS.

"SAN FRANCISCO, CAL., September 26, 1893."

Upon the matter of the payment of the taxes, it was agreed, in substance, at the trial, that the mortgagors paid the taxes and that plaintiff refunded to defendants the excess above eight per cent interest he had received. Counsel, at the trial, stated the mode a little differently. Counsel for plaintiff said, "Mr. Matthews sent the money down here to pay these taxes to Mrs. Ormerd and out of the money sent by Mr. Matthews to Mrs. Ormerd, the four per cent, she paid the taxes, sent the receipt to him, and retained the balance of the four per cent."

"Mr. Wells. — That is substantially true. Mrs. Ormerd paid the taxes out of her own money first, and subsequently Mr. Matthews refunded the four per cent in excess of the eight per cent."

It was further stipulated that the amount of taxes so paid was $800.13, on the mortgage interest, "and that plaintiff has remitted to the defendant four per cent of the twelve per cent which he had received."

Whichever way the matter is stated, the effect is the same. The plaintiff received eight per cent per annum interest upon his loan, and the mortgagors paid the taxes. The instruments must be construed as one, and although the note called for twelve per cent, in another part of the same contract the mortgagee agreed that he would exact only eight per cent per annum, and would refund all over that amount after deducting the taxes. This was what was done year by year, *Page 86 only Mrs. Ormerd first paid the taxes, and then plaintiff refunded the four per cent paid as interest. It was as plainly an agreement for interest at eight per cent, and that the mortgagors would pay the taxes, not exceeding four per cent, upon the amount of the note, as though the contract had been so expressed.