129 Misc. 205 | N.Y. Sup. Ct. | 1927
The mortgage in this case called for an installment payment of a part of the principal and provided that “ the whole of said principal sum shall become due after default in the payment of any installment of principal or of interest for thirty days.” Ordinarily this would be construed as giving the mortgagor a leeway of thirty days within which to pay an installment of principal or interest before the balance of the principal should become due. But the parties have employed the wording of the statutory form of mortgage. (Real Prop. Law, § 258, sched. M, as amd. by Laws of 1917, chap. 681.) In such case the Legislature has taken from the court the function of construction and enacted that these words shall have a statutory meaning which limits the thirty days’ provision to the payment of interest. (§ 254, subd. 2, as amd. by Laws of 1917, chap. 682.) When the installment of principal was unpaid on the due date the balance of the principal became due at the option of the mortgagee. The mortgagor assumed that he had thirty days of grace within which to pay the installment of principal and did not make a tender on the due date, but did make a tender before the thirty days had expired, but after this action had been commenced. The mortgagee refused to accept the tender upon the ground that the whole of the principal had become due and he had brought this action to foreclose the mortgage, claiming the whole amount as due and in default. The mortgagor was mistaken in bis construction of the mortgage and was also under the common erroneous impression that the provision requiring the lapse of a certain time after a default before the acceleration of the time of payment of the principal goes into effect gives a period of grace for payment. The payment of interest and of installment of principal becomes due on the date specified in the mortgage and there is an immediate default if not then paid and the time is not enlarged by any provision in respect to the acceleration of the due dates of the balance. The mortgagee was within his rights in demanding payment of the whole principal and his action of foreclosure is well founded. The disposition of the courts towards this question of acceleration has been modified by recent decisions. In earlier cases there was an attitude of reluctance to grant any relief against the enforcement of the provision. It was/ said that the parties had made their contract and that the court had no right to modify its effect. But later decisions regard this provision for acceleration of the due date as in effect a penalty for default in complying strictly with the terms of the contract and hold that it may be relieved against by a court of equity when the plaintiff invokes the jurisdiction of such a court to foreclose his mortgage. The mortgagor acted in good faith under a mistaken conception of
