Phelps v. Mayers

BRITT, C.

—On October 18, 1895, Mayers, the defendant, made and delivered to Phelps, the plaintiff, a mortgage of certain land in the county of Shasta to secure the payment of a promissory note of the same date, by the terms of which note Mayers promised to pay to Phelps on or before November 1, 1898, the sum of fifteen hundred dollars, with interest at the rate of nine per cent per annum, interest payable semi-annually in advance from date of the note. The mortgage recited said note at length and proceeded: “And these presents shall he void if payment he made according to the tenor and effect thereof.

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But in case default be made in the payment of the said principal or interest as herein provided, then” the mortgagee is “hereby empowered to sell the said premises .... or any part thereof, in the manner prescribed by law, and out of the money arising from such sale to retain the said principal and interest, together with the costs and charges .... of suit for foreclosure, including counsel fees at the rate of fifteen per cent, upon the amount which may be found to be due,” etc.

This action for the foreclosure of said mortgage was begun on May 27, 1897; it is alleged in the complaint that defendant has paid nothing on the note except the interest thereon to October 18,'1896, and that the principal thereof, with interest from said last-mentioned date, is due and unpaid. The court rendered judgment for the foreclosure of the mortgage to pay both the principal of the note and the interest due. The judgment contains also a recital that there is due from defendant to plaintiff the sum of one hundred and eighty-four dollars and forty cents, “costs, percentage, and necessary disbursements,” and a direction that plaintiff be paid that sum from the proceeds of sale as “costs of this suit.”

The defense is that the action was prematurely brought; defendant maintains that the instruments in suit do not provide that the principal of the debt shall become due on default in payment of interest, and hence that a foreclosure for both principal and interest was unwarranted. The note and mortgage, however, must be construed together; interest on the note is payable semi-annually, and the mortgage is clear that upon default in the payment of the interest, equally with default in the payment of the principal, the mortgagee may cause the premises to be sold and retain from the proceeds “the said principal and the interest”; there is scarcely room for interpretation in these provisions; they support the action for the amount of the note, both principal and accrued' interest.