Williams v. Gordon

CURTIS, J.

Action to foreclose mortgage. Judgment in favor of plaintiffs from which two of the defendants, John A. and Clara H. Gordon, appeal. Said defendants, the appellants herein, appeared in said action and filed an answer to the complaint. The plaintiffs thereupon moved to strike out portions of said answer on the ground that the same were sham, irrelevant, and immaterial, and also filed a demurrer to said answer on the ground that it failed to set forth facts sufficient to constitute any defense to plaintiffs’ cause of action. The court granted said motion and sustained said demurrer. Upon said defendants’ failure to file any further or amended answer, their default was entered and later judgment was given against them by default. They now claim on this appeal that the trial court erred in granting plaintiffs’ motion to strike out portions of said answer and in sustaining the demurrer to their answer, for the reason that said answer stated facts which, if true, were sufficient to constitute a valid defense to plaintiffs’ cause of action.

[592]

The note secured by said mortgage was dated September 20, 1924, and was payable on or before three years after date. It provided that the interest should be paid quarterly, “and if not so paid, it shall become part of the principal, and bear the same rate of interest as the principal; and should the interest not be paid when due, then the whole sum of principal and interest shall become immediately due and payable at the option of the holder of this note. ’ ’ The quarterly installments of interest falling due on December 20, 1925, and March 20, 1926, were not paid, and the action was begun April 28, 1926. The first defense set up in the answer, is that defendants’ failure to pay said installments of interest was due to the fault of the bank, with which said note and mortgage had been deposited, in neglecting to send the usual notice that an installment of interest was about to fall due; that all parties to said mortgage intended -that the interest should be paid in the usual course of business and according to the custom prevailing in that locality, which is alleged to be that the note should bo deposited in the bank where it was made payable, and that the bank should send such notice a reasonable time before each installment became due; and that plaintiffs so deposited said note and mortgage and the bank failed to send any notice regarding either of said installments of interest. These facts constituted no defense to said action. There was nothing in either the note or mortgage which gave defendants any right to notice of the time when the installment of interest would fall due, and the terms of the note and mortgage must govern and determine the rights of the parties thereto.