Swearingen v. Lahner

• Decision Date: 19 December 1894
• Citation: 93 Iowa 147,61 N.W. 431
• Parties: SWEARINGEN v. LAHNER ET AL.
• Court: Iowa Supreme Court

93 Iowa 147

61 N.W. 431

SWEARINGEN

v.LAHNER ET AL.

Supreme Court of Iowa.

Dec. 19, 1894.

Appeal from district court, Fayette county; L. O. Hatch, Judge.

Suit in equity to foreclose a mortgage. Defendants, other than the administrator, Platt, answered, averring that the notes in suit were not due; that plaintiff had done nothing to declare any option he might have of declaring them due; and averred a tender of the interest due before the commencement of the suit. Defendant Platt, as administrator, answered that the notes which the mortgage was given to secure were never filed against the estate he was administrator of, and that this action was not commenced within one year from the time of his appointment as administrator, and he asked that no claim be established against the estate. Plaintiff demurred to these answers, and the demurrers were sustained; and, defendants electing to stand thereon, a decree of foreclosure was rendered as prayed, and defendants appeal. Affirmed.Woodward & Cook, for appellants.

D. W. Clements & Son and Cardell & Nichols, for appellee.

DEEMER, J.

The notes on which the suit is predicated contain the following condition: “And, in case of nonpayment of interest when due, the whole sum of principal and interest to become due and collectible at the holder's option.” The mortgage made to secure them has this stipulation: “And it is hereby further agreed that, if the said Anton Lahner allows the taxes to become delinquent upon said property, or permits the same, or any part thereof, to be sold for taxes, or if he fail to pay the interest on said note promptly as the same becomes due, the note secured hereby shall become due and payable in thirty days thereafter, and the mortgagee, their heirs or assigns, may proceed at once to foreclose this mortgage; and, in case it becomes necessary to commence proceedings to foreclose the same, then the said Anton Lahner, in addition to the amount of said debt, interest, and cost, agrees to pay the mortgagee herein named, or to any assignee of the mortgagee herein, a reasonable attorney's fee for collecting the same, which fee shall be included in judgment in such foreclosure case.” Unless these provisions caused the notes to mature because of nonpayment of interest, and authorized the foreclosure of the mortgage, then the debt is not due; and it is upon the theory that such nonpayment did not mature the note until some election was exercised by the mortgagee, and notice thereof given to the mortgagor, that the answer of all of the defendants except the administrator was based. This answer also alleged that the defaulted interest was tendered before the commencement of this suit.

We have, then, these two propositions for determination: (1) Was the holder of the note required to make an election, declare the notes due for the failure to pay interest, and give notice thereof to the mortgagors before commencing his suit? And (2) did a tender of the interest due long after its maturity, but before the commencement of the suit, bar plaintiff of his right to foreclose for nonpayment of interest? The interest became due on the notes in suit March 1, 1893, and was not paid, and no effort made to make payment, until September 23, 1893, when, it is alleged in answer, the defendants tendered the amount, with interest thereon to that time. This the plaintiff refused to accept, and on October 14th, without further notice, commenced this suit. Some courts have held that contracts in notes and mortgages given to secure them are separate and independent, and each contract must be construed with reference to its own particular terms. White v. Miller (Minn.) 54 N. W. 736;McClelland v. Bishop, 42 Ohio St. 113; Railway Co. v. Sprague, 103 U. S. 756. Should we adopt this rule, then it is clear from the authorities cited that the stipulation in the mortgage itself authorizes the remedy sought to be obtained in this case. Plaintiff, in his petition, does not ask for a personal judgment. He could not obtain it if he did, for the maker of the notes is dead. The defendants are the administrator and the heirs at law of the maker of the note, and are made parties to cut off their equity of redemption. True, plaintiff asks to have the claim established as a general claim against the estate of the deceased, but the court, in passing the decree, did not so order. The decree simply directed the sale of the real estate to pay the judgment. So that, on defendants' theory of the case, we think the court was right in sustaining the demurrer. But the decided weight of the opinion in this country is that a note and mortgage executed at the same time and as one transaction are to be construed together, and, so far as possible, construed as one instrument. See Noell v. Gaines, 68 Mo. 649;Chambers v. Marks (Ala.) 9 South. 74;Manufacturing Co. v. Howard, 28 Fed. 741;Schoonmaker v. Taylor, 14 Wis. 313; Stanclift v. Norton, 11 Kan. 218; Mallory v. Railroad Co., 35 N. Y. Super. Ct. 174; Lantry v. French (Neb.) 50 N. W. 679. And this is the rule adopted by this court in Clayton v. Whitaker, 68 Iowa, 412, 27 N. W. 296;Sloat v. Bean, 47 Iowa, 60;Dobbins v. Parker, 46 Iowa, 357;Dean v. Ridgeway, 82 Iowa, 757, 48 N. W. 923;Bank v. Griffin, 54 Iowa, 749, 6 N. W. 155;Kramer v. Rebman, 9 Iowa, 114. The notes in suit leave it optional with the holder whether he will declare the whole amount of principal and interest due upon nonpayment of interest when due; and the mortgage provides that, if the mortgagor fails to pay interest on the notes promptly as the same becomes due, the notes secured shall become due and payable in 30 days thereafter, and the mortgagee, his heirs or assigns, may proceed at once to foreclose the mortgage. The only inconsistency here relates to the option plaintiff may exercise, and the time within which it may be exercised, if required at all, after 30 days. But as, by the terms of either the notes or the mortgage, the plaintiff had the right, at the time he commenced the suit, to elect to treat both the principal and interest due, and proceed to foreclose, it is not necessary for us to put a construction upon these two stipulations. Stipulations such as are found in these notes and in the mortgage...