Stevens v. De Cardona

By the Court, McKinstry, J.: The stipulation in the mortgage, that in case of default in the payment of the interest, on or before the 5th of any month, to McDonald, agent, he should take charge of the mortgaged premises, collect the rents, deduct interest, and pay excess to mortgagor, does not necessarily conflict with the previous stipulation, that in default of payment of interest for a period of sixty days the mortgagee might consider the principal sum due and foreclose.

By the stipulation first mentioned, if the mortgagor failed to pay interest, or any part thereof, on the 5th of any month, McDonald would have the right to collect the rents and apply the same to the payment of interest. McDonald might pay out of the rents received such sums as by the contracts between the mortgagor and the tenants in possession were to be paid by the former, but he was not authorized to pay taxes or make other expenditures merely because the mortgagee, by the terms of the mortgage, had the right to make them (and to have his lien therefor) in case they were not paid by the mortgagor. To construe the stipulation as authorizing the agent, McDonald, to make such expenditures, would be to construe it as authorizing him to pay such sums as would, perhaps, reduce the rents received, so that they would be insufficient to meet the interest, [491]and thus set the sixty days running contrary to the meaning and intent of the covenants of the mortgage.

Judgment and order reversed, and cause remanded for a new trial.