49 Kan. 545 | Kan. | 1892
On the 13fch day of February, 1892, E. G. Benedict filed his petition in the district court of Osborne county against Catherine Hutchinson and John C. Hutchinson, to foreclose two mortgages, amounting in the aggregate to $1,500, and each falling due July 1, 1891. The principal of each debt was evidenced by a note, in the usual form for farm loans, with coupons attached, fixing the interest upon the notes at 7 per cent, per annum. The notes and coupons bore interest at 12 per cent, per annum from maturity, payable semi-annually. The language of each one of the principal notes, with reference to the interest after maturity, reads as follows:
“ If any part of the principal and interest is not paid at maturity, it shall bear interest thereafter at the rate of 12 per cent, per annum, payable semi-annually, and if any interest remains unpaid 20 days after due, the principal shall become due and collectible at once without notice, at the option of the holder.”
The mortgages each contain the usual conditions, and, after reciting the rate of interest in the notes and coupons, have this further clause:
“But if default be made in such payment, or any part thereof, or the taxes, or if the insurance is not kept up thereon, then this conveyance shall become absolute, and the whole shall become due and payable at once, without notice, at the option of the holder, with 12 per cent, interest per annum from the date hereof.”
The,interest coupons were all paid except those maturing Julyl, 1891. The court below gave judgment for the amount of the notes, with 12 per cent, interest from date, less the interest coupons paid, in accordance with the condition in the mortgages.
It is urged by counsel for the plaintiffs in error that the mortgage clause providing for 12 per cent, interest from date should not be enforced, because it is in direct conflict with the condition in the notes, in providing a greater rate of interest
In the case of the Railway Co. v. Sprague, 103 U. S. 756, where there appeared to be a difference between the terms of certain bonds and the mortgage given to secure the payment of the former, the court held that the bonds being the principal thing, containing the obligation of the company, and the mortgage a mere security to insure the performance of that obligation, the terms of the bonds should control.
We think this decision of the supreme court of the United States and the decisions of this court settle the question, and the interest should be calculated in accordance with the terms' of the note, and the condition in the mortgages should not govern. It follows from this conclusion that the district court was in error in computing interest upon the entire debt at the rate of 12 per cent, per annum from the date of the notes. The plaintiff below should only have had judgment for the sum of $1,552.50, with interest from the 1st day of July,
It is recommended that the judgment be so modified.
By the Court: It is so ordered.
