Monroe v. Fohl

Hayne, C. — Action to foreclose a mortgage, the plaintiff claiming that he was entitled to elect, and did elect, to have the principal become due for non-payment of interest. The plaintiff had judgment on demurrer to the answer, and the defendant appeals. We think the answer presented no defense.

1. The note was dated June 25, 1885, and the interest was payable annually. On October 10, 1885, the defendant paid eight hundred dollars on account of the note, without anything being said on either side as to whether the payment was to be applied to the interest or to the principal. Conceding, in favor of the defendant, that the payment was to be applied first to the interest, it will be so only as to interest up to the date of the payment. The balance of the payment must be applied to the principal. The law will not apply it to future or unearned interest. After making the application as above stated, there remained something over eight months’ interest to fall due on June 25, 1886. That balance of interest fell due on that day, — for the meaning of the contract is that the interest was to be paid annually from its date, and not annually from [570]any date at which a payment might happen to be made; and the fact that the defendant chose to make the payment above mentioned does not affect the interest on the unpaid principal. The non-payment of this eight months’ interest entitled the plaintiff to elect to consider the principal as due.

2. The plaintiff did elect to have the principal become due. The complaint alleges that on July 14, 1886, the plaintiff notified the defendant of his election by leaving a notice at the defendant’s residence with a person of discretion in charge of such residence, and by leaving a notice at the defendant’s place of business with a person of discretion in charge of such place of business, the defendant being then absent from his residence and place of business, and the plaintiff having been unable, after diligent search and inquiry, to ascertain his whereabouts. The only construction we can give to the answer is, that the defendant was not personally notified or “ informed ” of the election. We think the notice given was sufficient.

3. The execution and delivery of the note payable to the order of plaintiff being admitted, the denial that plaintiff was the “ holder ” of the note and the assertion that the bank was the holder, without averring any facts showing such to be the case, were of conclusions merely, and raised no issue. (Poorman v. Mills & Co., 35 Cal. 119; Wedderspoon v. Rogers, 32 Cal. 571; Hook v. White, 36 Cal. 302.)