87 N.Y. 476 | NY | 1882
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *478 We think that the true interpretation of the agreement of January 5, 1877, is, that the plaintiffs agreed to extend the time of payment of the $956.28 then due them, by making the amount payable in monthly payments of not less than $25 each, to be paid on the first day of each month, thus giving the defendant not exceeding thirty-eight months within *479 which to pay the whole debt, and the consideration for this extension was the conveyance by Andrews of the land at Newark as security. The construction sought by the defendant to be put upon this stipulation, and which was sustained by the court below, was, that there was an absolute extension of the whole debt for thirty-eight months, and that it was optional with the defendant whether or not to make the monthly payments; but this construction seems to us at variance with the spirit and intent of the agreement, and with its language when read as an entirety. It is true that it states that the plaintiffs have agreed to accept monthly payments, but we do not think that this means that they had agreed to accept these payments in lieu of a payment of the whole amount at the end of thirty-eight months, but that they would accept them in lieu of the payment of the whole amount which was due, and which they had the right to exact immediately, and that the extension of not exceeding thirty-eight months was not an absolute extension of the whole debt, without regard to the monthly payments, but the extension which would result from accepting payment in monthly installments; that is, they gave the defendant not exceeding thirty-eight months within which to pay in installments of not less than $25 on the first of each month. These installments were fixed at a minimum amount, which would about discharge the principal of the debt in thirty-eight months if no more than $25 per month were paid, and sooner if the payments were made larger, and an understanding that they should be due and payable on the first of each month was necessarily implied. The whole debt was to be discharged within thirty-eight months, and although the plaintiffs could not during the running of the time exact more than $25 per month, yet if the defendant did not make the payments large enough to discharge it within the time, he would doubtless have been bound to pay the residue at its expiration. There was no need of an express promise to pay the installments, for the whole debt was due, and the extension given operated only for the first month, and after that upon the amounts which would from time to time remain owing after the payment of *480 installments. This view is confirmed by the form in which the security was taken. The instrument recites that Andrews has conveyed the lot of land, not as security for the payment of the entire debt at or before the expiration of thirty-eight months, but "to secure said monthly payments." This conveyance was in substance a mortgage to secure the installments as they became due, and could have been foreclosed before the end of the time if these installments were not paid. It assumes that the principal debtor was bound to pay them, and shows that the parties so understood. If, at the time the agreement of January 5th was made, the original debt had not been due, and the object had been to give the defendant the privilege of discharging it before maturity, there would have been room for the position he now takes. But he cannot place himself in that position by separating the different sentences of the agreement, and reading the agreement to give time not exceeding thirty-eight months, without reference to the other parts of the instrument, which show the manner in which the payment was to be made within that time. At the time this action was commenced, two of the monthly installments had become payable, but it does not follow that the whole debt had become due. The debt was, by the agreement and in consideration of the security given, changed from one payable immediately to one payable in monthly installments, and in the absence of a stipulation, that, on default in the payment of any of these, the whole should become due, the plaintiffs were entitled only to recover the installments due at the time of the commencement of the action. They cannot now recover more, without taking the necessary steps to enable them to bring in installments accruing since the commencement of the action. The plaintiffs were not bound to surrender their security. They could have enforced it for the collection of the installments as they fell due, and their retention of it did not preclude them from recovering on the personal liability of their debtor. We think the action must be regarded as having been commenced on the 26th of March, 1877, when the summons was served. *481
The judgment should be reversed and a new trial ordered, costs to abide the event.
All concur.
Judgment reversed.