§ 271 — Construction of covenants in mortgages on leases of real property and bonds or notes

§ 271. Construction of covenants in mortgages on leases of real\nproperty and bonds or notes. In mortgages on leases of real property and\nin bonds or notes secured thereby, the following or similar covenants or\nagreements must be construed as follows:\n 1. In default of payment, mortgagee to have power to sell.--- A\ncovenant that the mortgagor "will pay the indebtedness, as provided in\nthe mortgage, and if default be made in the payment of any part thereof,\nthe mortgagee or obligee shall have power to sell the premises therein\ndescribed, according to law," must be construed as meaning that the\nmortgagor or obligor shall well and truly pay unto the mortgagee or\nobligee the said sum of money mentioned in the condition of the said\nbond, note or obligation, and the interest thereon, according to the\ncondition of the said bond, note or obligation. And if default shall be\nmade in the payment of the said sum of money therein mentioned, or in\nthe interest which shall accrue thereon, or of any part of either, that\nthen and from thenceforth it shall be lawful for the said mortgagee or\nobligee, his legal representative or assigns, to sell, transfer and set\nover, all the rest, residue and remainder of the said term of years then\nyet to come, and all other, the right, title and interest of the said\nmortgagor or obligor of, in and to the same, at public auction,\naccording to the act in such case made and provided. And as the attorney\nof the said mortgagor or obligor for that purpose by these presents duly\nauthorized, constituted and appointed, to make, seal, execute and\ndeliver to the purchaser or purchasers thereof, a good and sufficient\nassignment, transfer or other conveyance in the law, for the said\npremises, with the appurtenances; and out of the money arising from such\nsale, to retain the principal and interest which shall then be due on\nthe said bond, note or obligation, together with the costs and charges\nof advertisement and sale of the said premises, rendering the overplus\nof the purchase-money (if any there shall be) unto the said mortgagor or\nobligor, his legal representatives or assigns; which sale, so to be\nmade, shall forever be a perpetual bar, both in law and equity, against\nthe said mortgagor or obligor, and against all persons claiming or to\nclaim the premises or any part thereof, by, from or under him or them,\nor any of them.\n 2. Mortgagor to keep buildings insured.--- A covenant "that the\nmortgagor will keep the buildings on the said premises insured against\nloss by fire, for the benefit of the mortgagee," must be construed as\nmeaning that the said mortgagor or obligor shall and will keep the\nbuildings erected and to be erected upon the lands above conveyed,\ninsured against loss and damage by fire, by insurance, and in an amount\napproved by the said mortgagee or obligee and his assigns, and either\nassign the policy and certificates thereof or have such insurance made\npayable to the said mortgagee or obligee or his assigns, and in default\nthereof it shall be lawful for the said mortgagee or obligee and his\nassigns to effect such insurance, and the premium and premiums paid for\neffecting the same shall be a lien on the said mortgaged premises, added\nto the amount of the said bond, note or obligation, and secured by these\npresents, and payable on demand, with legal interest.\n 3. Mortgagor to pay rent and charges on premises.--- A covenant that\nthe mortgagor "will pay the rent and other charges mentioned in and made\npayable by said indenture of lease within ....... days after said rent\nor charges are payable," must be construed as meaning that the said\nmortgagor or obligor and his legal representatives and assigns, will pay\nor cause to be paid, and discharge all rent and rents mentioned in and\nmade payable by the indenture of lease aforesaid, and also all taxes,\nassessments or other charges that now are a lien, or hereafter shall or\nmay be levied, assessed or imposed and become a lien upon the premises\nabove described or any part thereof; and in default thereof, for the\nspace of ....... after such taxes or assessments or ....... after the\nsaid rent or rents, or any of them shall have become due and payable by\nthe terms of said lease or by law, then and in each and every such case\nthe said mortgagee or obligee, his legal representatives or assigns may,\nat option, and without notice, pay such rent or rents, taxes,\nassessments or other charges and expenses, and the amount so paid, and\ninterest thereon, from the time of such payment, shall forthwith be due\nand payable from the said mortgagor or obligor, his legal\nrepresentatives or assigns, to the said mortgagee or obligee, his legal\nrepresentatives or assigns, and shall be deemed to be secured by these\npresents, and shall be collectable in the same manner, and at the same\ntime, and upon the same conditions as the interest then next maturing\nupon the principal sum hereinbefore mentioned.\n 4. Agreement that whole sum shall become due.--- The words "And it is\nhereby expressly agreed that the whole of the said principal sum shall\nbecome due at the option of said mortgagee or obligee after default in\nthe payment of any instalment of principal or after default in the\npayment of interest for ....... days, or after default in the payment of\nany rent or other charge made payable by said indenture of lease for\n......... days, or after default in the payment of any tax or assessment\nfor ....... days after notice and demand," must be construed as meaning\nthat should any default be made in the payment of any instalment of\nprincipal or any part thereof, or of said interest or any part thereof,\nor of any rent or other charge made payable by said indenture or lease,\non any day whereon the same is made payable, or should any tax or\nassessment, which now is or may be hereafter imposed upon the premises\nhereinafter described, become due and payable, and should the said\ninterest, rent or other charge aforesaid, remain unpaid and in arrear\nfor the space of ....... days, or such tax or assessment remain unpaid\nand in arrear for ....... days after written notice by the mortgagee or\nobligee, his executors, administrators or assigns, that such tax or\nassessment is unpaid, and demand for the payment thereof, then and from\nthenceforth, that is to say, after the lapse of either one of said\nperiods, as the case may be, the aforesaid principal sum, with all\narrearage of interest thereon, rent and other charges paid by the\nmortgagee or obligee, shall, at the option of the said mortgagee or\nobligee, his executors, administrators or assigns, become and be due and\npayable immediately thereafter, although the period above limited for\nthe payment thereof may not then have expired, anything thereinbefore\ncontained to the contrary thereof in anywise notwithstanding.\n