Mutual Sav. & Bldg. Ass'n v. Canon Block Inv. Co.

• Decision Date: 01 December 1919
• Docket Number: 9405.
• Parties: MUTUAL SAV. & BLDG. ASS'N v. CANON BLOCK INV. CO. et al.
• Court: Colorado Supreme Court

185 P. 649

67 Colo. 75

MUTUAL SAV. & BLDG. ASS'N v. CANON BLOCK INV. CO. et al.

No. 9405.

Supreme Court of Colorado

December 1, 1919

Department 3.

Error to District Court, Mesa County; Thos. J. Black, Judge.

Suit by the Mutual Savings & Building Association against the Canon Block Investment Company and another. Judgment for plaintiff for insufficient relief, and it brings error.

Affirmed.

McMullin & Sternberg, of Grand Junction, and William H. Gabbert, of Denver, for plaintiff in error.

Benjamin Griffith, of Denver, for defendants in error.

ALLEN J.

This is a suit brought by the Mutual Savings & Building Association against the Canon Block Investment Company and a public trustee to foreclose a deed of trust which secured a promissory note. From the allegations of the complaint it appears that the plaintiff claims that the sum of $3,667.56 is due on the principal of the note, and that there is also due interest on this sum at the rate of 10 per cent. per annum from February 2, 1917. To the complaint there was interposed a defense which set forth a certain extension agreement relating to the note in question. It is further alleged in the answer that there was due on the note on February 2, 1917, the sum of $1,765.53, which sum was tendered plaintiff on that date and refused and is tendered in full satisfaction and discharge of the deed of trust and the note secured thereby. The extension agreement was recited in the answer, and is relied on by the defendant, as showing that the amount tendered by the defendant the Canon Block Investment Company is all to which the plaintiff is entitled as the owner of the note in question.

The plaintiff filed a demurrer to the above-mentioned defense of the answer. The trial court overruled the demurrer, and, the plaintiff electing not to reply to the answer but to stand on the demurrer, a judgment was rendered allowing the plaintiff the amount admitted by the defendant to be due, and also interest thereon from February 2, 1917, at the rate of 7 per cent. per annum. The plaintiff brings the cause here for review.

The controversy in the instant case relates entirely to the construction which is to be placed upon the extension agreement above mentioned, so far as such agreement affected the provisions of the note concerning the rate of interest which it should bear after maturity.

The promissory note in question was executed and delivered on May 18, 1901, and contains, in part, the following language:

'On the eighteenth day of May, 1906, for value received, I promise to pay to the order of Otho S. A. Sprague, the principal sum of twenty-five thousand dollars, with interest thereon at the rate of six (6) per cent. per annum from date until maturity, payable quarter yearly. * * * This note bears interest after maturity at the rate of ten (10) per cent. per annum, payable quarter yearly. * * *

'[Signed]

Orson Adams, Jr.'

The extension agreement consists of a request or application for extension, made by the maker of the note, and the granting of the extension by the holder of the note, or its agent. The agreement is evidenced by the following writings:

'Application for Extension.

'Loan of Orson Adams, Jr., of the Colorado Title & Trust Company.

'To the Colorado Title & Trust Company, Colorado Springs, Colorado

Gentlemen: I, Orson Adams (formerly Orson Adams, Jr.), hereby request you to obtain an extension of one (1) year, dating from October 3, 1912, of a certain loan of twenty-five thousand ($25,000) dollars, evidenced by a certain promissory note executed by Orson Adams, Jr., in favor of Otho S. A. Sprague, dated May 18, 1901, due May 18, 1906, and secured by deed of trust on lots numbered thirteen (13), fourteen (14), fifteen (15) and sixteen (16), in block numbered one hundred and nineteen (119), in the city of Grand Junction, according to the official plat thereof filed with the recorder of Mesa county, Colorado, together with all the improvements thereon, which deed of trust is recorded in the office of the clerk and recorder of said county in book 67, at page 405, all of which loan now remains unpaid, said deed of trust remaining in full force and effect until said indebtedness is fully paid; and I agree to pay said indebtedness of twenty-five thousand ($25,000) dollars and interest thereon from October 3, 1912, until paid, at the rate of seven per cent. (7%) per annum, payable semiannually, on the third (3d) days of April and October of each year, and the debt at maturity.

'All conditions contained in the note and deed of trust relating to the payment of interest, taxes and insurance premiums, and the rights of the holder in case default is made in such payments, and all other conditions and covenants contained in such note and deed of trust, not especially modified by this application to remain in full force and effect, excepting that the rate of interest shall be seven per cent. (7%) per annum instead of six per cent. (6%) per annum as called for in said note.

'[Signed]

Orson Adams.

'Lettie L. Adams.

'Witness: Albert E. Baylis.'

'To Orson Adams and Lettie L. Adams: We have obtained from the holder of the above-described loan authority to extend payment of the same as above requested, and such extension is here granted.

'The Colorado Title & Trust Company,

'By J. Arthur Connell, President.

'Colorado Springs, Colorado, October 24, 1912.'

The contention of the plaintiff in error, plaintiff below,...