70 Wash. 169 | Wash. | 1912
This action was commenced by Equitable Savings & Loan Association, a corporation, against Andrew R. Cox, William Bowes, Hugh Carlin, and their respective wives, to foreclose a real estate mortgage. The only issue was whether $726.88, tendered by defendants, or $893.19, with attorney’s fees and costs-, demanded by plaintiff, was the sum remaining unpaid. The trial court entered findings and a
The note and mortgage were executed on July 27, 1906, by Andrew R. Cox and Sarah Cox, his wife, then the owners of the real estate in the mortgage described. Material portions of the note read as follows:
“For value received, I . . . promise to pay ... to the order of the Equitable Savings & Loan Association, . . . the sum of twenty hundred and twenty-five and sixty-hundredths dollars ($2,025.60) in one hundred twenty equal monthly installments of sixteen and eighty-eight hundredths dollars ($16.88) ; . . . the same being as and for a payment on account of the principal sum of a loan of twelve hundred dollars ($1,200) obtained from said association, and the proportion of eight hundred twenty-five and sixty-hundredths dollars ($825.60), interest thereon, which may have accrued on the balance of said principal sum remaining unpaid at the date of the last installment payment, said sum of eight hundred and twenty-five and sixty-hundredths dollars ($825.60) being total interest for said period of one hundred twenty months upon said principal sum calculated upon unpaid monthly balances. If default shall be made in the payment of any of the aforesaid installments of principal and interest upon the day the same becomes due and payable, all of the remaining unpaid installments of principal, and interest accrued to date, provided for in this obligation, shall at once become due and payable at the option of the Board of Directors of said Equitable Savings & Loan Association. . . . After twenty-four months from date and after twenty-four monthly installments have been paid, this note may be paid in full by paying balance of the principal and interest accrued to date of payment; or, additional payments of any multiple of the monthly installment, or multiples of $100 may be made, interest ceasing on any sums so paid.”
On November 23, 1906, Cox and wife conveyed the real estate to the appellants Bowes and Carlin, subject to the mortgage hen. Forty-eight installments, to July 20, 1910, inclusive, were paid in accordance with the terms of the note. On August 17, 1910, three days before the next installment matured, appellants tendered $726.88 in full satisfaction of
The substance of their contention, as shown by such computation, is that $6.88 was to be applied on principal and $10 on interest each and every month during the life of the note, and that, after forty-eight installments had been paid, the total credits on principal would amount to $480, leaving $720 unpaid. To this they added $6.88, one month’s install
Respondent’s theory is that each monthly installment of $16.88 was to be first applied on the interest earned during the preceding month, then as part payment on the principal, and that each month the principal was to be thus decreased. For instance, the original principal was $1,200, and it appears from a proper computation incorporated in the record that of the first installment of $16.88 payable on August 20, 1906, $11.52 was to be applied in payment of interest earned on $1,200 during the preceding month, at the rate of 11.52 per cent per annum, while $5.36, the remainder of the monthly installment, would decrease the original principal, leaving a reduced or new principal of $1,194.64 upon which interest at 11.52 per cent per annum would be computed during the second month. It will thus be noted that, while the monthly installments of $16.88 were to continue without change for the entire period of one hundred and twenty months, the proportions thereof to be applied on interest and principal would constantly change; that each month the interest payment would decrease, while the principal payment would increase, the latter increasing to the exact sum that the former decreased. A computation of this character, made at the rate of 11.52 per cent per annum, will also show that in the one hundred and twenty months contemplated in the note, payments would total $825.60 on interest, and $1,200 on
The trial court, after allowing an additional stock installment credit of $1.20, entered judgment for $893.19, upon the theory that, in the event of default, interest should be computed at the rate of twelve per cent per annum from the date of the note instead of 11.52 per cent, the true rate which the note was earning. In this we think error was committed, our construction of the stipulations of the mortgage relative to a default being that 12 per cent was to be computed after default on the principal then remaining unpaid, which would not be increased by the default. It is therefore manifest that judgment was entered' for a sum slightly in excess of the principal unpaid on July 20, 1910. Judgment should have been entered for $874.84, less the stock installment credit of $1.20, or for $873.64, with 12 per cent interest thereon from July 20, 1910, in addition to the attorney’s fees allowed and costs taxed. Reduced to that amount, the judgment will stand affirmed. Neither party will recover costs on this appeal.
Parker, Gose, and Chadwick, JJ., concur.