Frye v. Shepherd
Decision Date | 07 July 1913 |
Citation | 158 S.W. 717 |
Parties | FRYE v. SHEPHERD. |
Court | Missouri Court of Appeals |
BILLS AND NOTES (§ 125) — STIPULATION FOR PAYMENT OF INTEREST — CONSTRUCTION.
A note which calls for the payment five years after date of a specific sum with interest at the rate of 8 per cent. per annum, and which provides that "if the interest be not paid annually to become as principal to bear the same rate of interest," does not provide for the payment of interest annually, and the failure to pay interest annually does not authorize the foreclosure of a mortgage stipulating that if the note shall not be paid according to its tenor the mortgagee may sell the property described therein.
Appeal from Circuit Court, Jasper County; Joseph D. Perkins, Judge.
Action by Albert F. Frye against Edward Lee Shepherd. From a judgment for plaintiff, defendant appeals. Affirmed.
A. C. Burnett, of Joplin, for appellant John Dolan, of Joplin, for respondent.
This was a suit to enjoin a mortgagee from advertising and selling certain real estate mentioned in a mortgage which had been given by plaintiff to secure his promissory note, which is as follows:
The plaintiff's petition alleged the facts concerning the note and mortgage and stated that the mortgage contains this provision: etc.
It is alleged in the petition that the note is not yet due and payable according to its tenor and effect, but that defendant has caused said property to be advertised for sale on a certain date for the purpose of paying said note. The usual allegations of irreparable damage to invoke equitable jurisdiction are followed by a prayer for injunctive relief, restraining the defendant from selling said property under the mortgage until maturity of the note and default in its payment.
After a hearing, and upon the issuance of a permanent injunction, the defendant appealed. The question for our determination is whether a failure to pay interest annually on the note is a breach authorizing foreclosure of the mortgage. Appellant contends that it is, and respondent by a vigorous negative supported by the decision of the learned trial judge makes the issue. The evidence shows that about 30 days before the expiration of the first year of the note's existence the payee notified respondent that he expected the interest to be promptly paid; that it was not so paid, respondent saying he applied for an extension of time and was given ten days, at the end of which time he says he went to defendant's office and asked to see the note, and upon seeing it told the defendant that it was a compound interest note; that it was optional with him whether he would pay the interest until the maturity of the note; and that defendant had no right to sell the property under the note and mortgage. Appellant advertised the property for sale and respondent brought this suit.
The note is unambiguous and means just what its language imports in plain English. A similar case arose in the state of Kansas in which the note followed substantially the same form as the one in our case (Motsinger v. Miller, 59 Kan. 573, 53 Pac. 869). The Supreme Court of that state said:
In Koehring v. Muemminghoff, 61 Mo. loc. cit. 406, 21 Am. Rep. 402, the Supreme Court of this state said:
In Wood v. Whisler, 67 Iowa, 676, 25 N. W. 847, it was held that where the notes secured by a mortgage provide that, "if interest is not promptly paid annually, the same becomes a part of the principal and shall bear interest at the same rate of interest," and the mortgage contains a provision that "if default be made in the payment of said sums of money, or any part thereof, principal or interest, * * * the whole amount of the indebtedness shall become due," it is optional with the mortgagor to pay the interest...
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