Northwestern Mut. Life Ins. Co. v. Allis

• Decision Date: 07 February 1877
• Citation: 23 Minn. 337
• Parties: NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY and another <I>vs.</I> MARY C. ALLIS, impleaded, etc.
• Court: Minnesota Supreme Court

23 Minn. 337

NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY and anothervs.

MARY C. ALLIS, impleaded, etc.

Supreme Court of Minnesota.

February 7, 1877.

Action to foreclose a mortgage, brought by the insurance company and William R. Marshall, against Lorenzo Allis and Mary C. Allis, his wife, in the court of common pleas of Ramsey county, on March 13, 1875. Trial before Simons, J., who ordered judgment for plaintiffs, which was entered, and the defendant Mary C. Allis appealed.

Frederick Allis, for appellant.

George L. & Charles E. Otis, for respondents.

GILFILLAN; C. J.¹

From the facts found it appears that the defendants are, and, at the several transactions involved, were, husband and wife, and that at St. Paul, on June 1, 1874, they executed their joint promissory note for the payment, to the order of William R. Marshall, two years from said day, of $10,000, with interest semi-annually, at 10 per cent. per annum, and exchange on New York, which note contained this stipulation: "It being distinctly understood and agreed that should there be any default in the payment of the said interest, as above mentioned, that then, and as often as such default shall be made, the whole of said principal sum, together with all accrued interest thereon, shall immediately become due and payable, at the option of the holder of this note, within thirty days from the time of such default;" and at the same time, to secure said note, they executed to Marshall a mortgage upon real estate, the separate property of Mary C. Allis, which mortgage contained this recital in the description of the note which it was given to secure: "Said note also containing a provision to the effect that should any default be made in the payment of the said interest, or any part thereof, on any day whenever the same is made payable as above expressed, that then, and as often as such default shall be made, the aforesaid principal sum of ten thousand dollars, with all arrearages of interest thereon, shall, at the option of the said party of the second part, or his legal representatives or assigns, become and be due immediately thereafter, and payable within thirty days from the date of such default." There was in the mortgage a covenant that the mortgagors should pay all taxes prior and subsequent to its execution, with the stipulation that, in default thereof for thirty days, the mortgagee might pay them, and the same should thereupon be due and payable by the mortgagors to the mortgagee, and be deemed secured by the mortgage; "and in default of such payment by the said parties of the first part, their heirs, executors, administrators, or assigns, the whole of the principal sum and interest secured by this mortgage shall, at the option of the said party of the second part, his executors, administrators, or assigns, immediately become due and payable." This note and mortgage were, in August, 1874, transferred by Marshall to plaintiff, now the holder, as collateral security.

The note and mortgage were in fact given to secure an individual debt of the husband, and the money he received thereon was used exclusively for his benefit. Of these facts, however, Marshall had no notice, but he was led to believe, and did believe, that the note and mortgage were given to secure the indebtedness of both defendants.

At the same time of executing this note and mortgage, and as further security for said note and another note for $4,000, the defendants executed to Marshall a mortgage upon other real estate, the property of the defendant Lorenzo. The property covered by this last mortgage was, at the time of the trial, so heavily encumbered by prior liens as to make it of no value whatever as a security for the payment of the note for $10,000. Defendants failed to pay the instalment of interest on the $10,000 note falling due December 1, 1874, and have never paid it.

Taxes levied upon the property were due and unpaid August 28, 1874, and were never paid by either of defendants, but, about that time, and before the transfer of the notes and mortgages, were paid by Marshall.

On January 11, 1875, plaintiff served on defendants notice of its election to declare the principal sum of the note and mortgage due. This notice is not set out in the record. Judgment for the foreclosure of the $10,000...