Smalley v. Renken

52 N.W. 507, 85 Iowa 612

• Court: Supreme Court of Iowa
• Decided: May 25, 1892
• Status: Published

Opinion

G-ranger, J.

I. The claimed default in the payment of interest is reduced to this: The amount of 1. Mortgages: right of foreclosure: default in interest. interest due March 31, 1889, was fifty-five dollars and twenty-six cents. It was paid an^ aecepted on the fourth day of April, 1889, by a “check,” as follows:

“Ashton, Iowa, April 4, 1889.

Bank of Ashton.

“Pay to Isaiah Smalley or order fifty-five and twenty-six one-hundredths dollars, in full of interest due on his mortgage of six hundred and ninety dollars and seventy-eight cents, on the west half northwest quarter 21, 98, 42, due April 1, ;89.

“[$55 26-100.] J. Renken.”

The interest on the deferred payment of interest for the short time is eleven cents, which, it seems, was not included in the check or otherwise paid. It is urged that this failure works a forfeiture of the contract as to time, and will justify this action, under the conditions expressed. We think not. The amount of the unpaid interest is nominal. The “check” specifies the amount thereof to be “in full of interest due on his mortgage * * * due April 1, 1889.” There is some obscurity in the language of the check, observing it literally, for the mortgage was not due April 1,1889; but the meaning, in the light of the admitted facts, is unmistakable. It means a payment of the interest due April 1, 1889. The interest to March 31st was from that day a debt due, and designated as interest, as would be the case with an interest coupon. It is in a sense, a distinct claim, and its payment in full includes the interest accumulated thereon. If the check read, “In full of interest coupon due April 1, 1889,” and the payment was made after j;he coupon was due, there could not well be a dispute but that the payment included all due on the coupon to date of payment. No more should there be in this case. The acceptance of the check, which was paid on presentation, indicates unmistakably a purpose to receive that amount in discharge of the interest claim. It should be said that the action was commenced under a belief that there had been a default in the payment of the entire interest for two years, because, by a mistake, it had not been indorsed on the note. When discovered, there was an amendment to show the facts.

It is also urged that the default in the payment of the fifty-five dollars and twenty-six cents till April 4th, although then paid and accepted, works a forfeiture as to time, and the action should be sustained. In the absence of a showing to- the contrary, the law will infer that such a payment was with the understanding that it was intended in fulfillment of the obligations under the contract, and the acceptance is a waiver of any claims of forfeiture. When the action was commenced as to interest, the plaintiff had his entire dues, and a forfeiture would be at the expense of absolute justice. The courts will not so decree it. The case of Sloat v. Bean, 47 Iowa, 60, is very different. The payment was to an agent not authorized to waive conditions, and the plaintiff refused to accept the money in full payment.

II. The condition of the mortgage, that all taxes should he paid within thirty days from the time they 2. -: -: default in payment of taxes. became due and payable, is a ground upon which ^ is sought to declare the note due and sustain the action. The default in this respect was not made a basis for the action at its commencement, but was so made by an amendment filed January 6, 1890. The taxes were paid August 27, 1889. The appellee urges this point, because it is within the letter of the contract: Courts look at the intent of the parties in making the contract. The suit cannot be regarded as commenced as to this particular default until the filing of the amendment to the petition, January 6, 1890. At that time the taxes were paid. What did the parties stipulate that the taxes should be paid by defendant for? To protect the plaintiff from the loss or impairment of his security. At the filing of the amendment every right of the plaintiff in this respect was fully protected. The object of the condition of the mortgage was to enable the plaintiff to treat the debt as due, and save himself from loss because of the default. After the payment of the taxes, all such liability for loss was at an end. His situation was exactly as if there had been no default as far as the conditions for forfeiture were concerned. To justify a forfeiture under such circumstances would work an injustice that the court ought not to permit. We think the payment of the taxes, after a breach of the condition for their payment, and in a way that no prejudice could result because of the default, and before suit brought to declare the debt due because of the default in payment, is a bar to such a proceeding. As bearing upon the questions herein discussed, see Watts v. Creighton, ante, page 154.

We are united in the conclusion that the petition should be dismissed. Reveeseix