Des Moines Sav. Bank & Trust Co. v. Littell

• Court: Iowa Supreme Court
• Writing for the Court: MORLING, J.
• Citation: Des Moines Sav. Bank & Trust Co. v. Littell, 209 Iowa 22, 227 N.W. 503 (Iowa 1929)
• Decision Date: 21 November 1929
• Docket Number: 39802
• Parties: DES MOINES SAVINGS BANK & TRUST COMPANY et al., Appellees, v. O. O. LITTELL, Appellant, et al

227 N.W. 503

209 Iowa 22

DES MOINES SAVINGS BANK & TRUST COMPANY et al., Appellees, v. O. O. LITTELL, Appellant, et al

No. 39802

Supreme Court of Iowa, Des Moines

November 21, 1929

Appeal from Van Buren District Court.--R. W. SMITH, Judge.

Suit to recover on promissory note and to foreclose mortgage securing it. The maker set up in his separate answer the defense of former recovery and res adjudicata. The answer was stricken. Decree was entered in favor of plaintiffs. The maker appeals.

Affirmed.

George M. Faul and W. M. Vanderwaal, for appellant.

Parsons & Mills, for appellees.

MORLING J. ALBERT, C. J., and STEVENS, FAVILLE, DE GRAFF, KINDIG, and WAGNER, JJ., concur.

OPINION

MORLING, J.

By the note in suit, dated February 3, 1923, the appellant promised to pay, March 1, 1928, to the Iowa Loan & Trust Company or order $ 8,000, with interest from March 1, 1923, at 5 1/2 per centum per annum until maturity, and 8 per cent per annum thereafter, payable annually at its banking house in Des Moines on the first day of March in each year "according to the tenor and effect of five appropriate interest coupons of even date herewith * * * all for the sum of $ 440 each, all payable to the order and at the place of payment aforesaid, evidencing the several installments of interest on said principal sum up to and including the maturity thereof and bearing interest after maturity at the rate of 8 per cent per annum." The note provided that if default were made in payment, in whole or in part, of any of the installments of interest, or in performance of any of the covenants of the mortgage, the principal sum, together with accrued interest, should, at the election of the legal holder, and without notice, at once become due. The payee agreed to accept payments of $ 100 or any multiple of $ 100 on principal on March 1, 1926, or any interest maturity date thereafter, provided that 60 days' written notice should be given. Coupons accordingly signed by the maker of the principal note were attached. All were paid except the last, which reads:

"$ 440.00 Des Moines, Iowa, February 3, 1923, Due on the first day of March, A. D. 1928, to the order of Iowa Loan & Trust Company * * * the sum of Four hundred forty and no/100 Dollars at its banking house in the City of Des Moines, Iowa, with interest thereon after maturity at the rate of 8 per cent per annum, payable at said bank, being for an installment of interest due on said last mentioned date" on the principal note and mortgage in controversy.

The coupon provided that it would not be payable if the maker exercised option to repay the principal note.

After the maturity of the principal note and coupon, the plaintiff, which had become the holder, sued the maker in the municipal court of Des Moines on the coupon, and recovered judgment for the amount thereof. The maker (appellant) here contends that the principal note and coupon maturing at the same time in the hands of the same holder gave rise to but a single cause of action, which could not be split into one on the coupon and another on the principal note, and that the judgment on the coupon was an adjudication of all the rights of the parties, barring plaintiff from maintaining the present action.

It was within the province of the parties to the loan to so sever the promises to pay the installments of interest from the promise to pay the principal as to make each separate and independent of the other. Many reasons, about which it is wholly useless for us to speculate, might impel either party, or both, to desire the severance and independence of these promises. (See cases below.) The only question here is whether the obligations in question are so drawn as to work such a severance. The first suit was not brought on the mortgage, or on any agreement amalgamating or consolidating or merging the promises to pay the interest with or into the promise to pay the principal, or to subject the property to an indistinguishable liability for both principal and interest. The promise sued on in the first action is specific, and independent of the promises to pay other installments of interest or coupons or the principal. The court is of the opinion that the promise to pay the interest as evidenced by the coupons, though the principal note had matured and was in the possession of the same...