120 Neb. 742 | Neb. | 1931
Opinion on motion for rehearing and on the merits of an ■action to foreclose a second real estate mortgage of date May 28, 1925, executed and delivered by the defendants to plaintiff and plaintiff’s assignee to secure payment of the sum of $18,250, evidenced by a promissory note of even date, due June 1, 1935, “with interest at the rate of ten per cent, per annum, payable annually, from date until paid.” This action was commenced in the district court ■ for Cedar county on the 28th day of August, 1928, and is based upon an alleged accelerated maturity caused by nonpayment by the defendants of interest on the indebtedness accruing and due on June 1, 1927, and June 1, 1928, and also because of the failure of the defendants to “pay all taxes and assessments levied upon, said real estate” covered by the mortgage in suit “before the same became delinquent.” As to the condition of this mortgage, plaintiff in her' petition alleges: “Said mortgage deed was by the terms thereof conditioned as follows: ‘Subject to a mortgage of $17,000 to the Omaha Trust Company, of Omaha, Nebraska. The intention being to convey hereby an absolute title in fee simple including all the rights of homestead and dower. To. have and to hold the premises above described, with all the appurtenances thereunto belonging unto the said D. A. and N. A. Matthews and to their heirs and assigns, forever; provided always, and these presents are upon the express condition that if the said Friedrich Guenther, his heirs, executors, administrators or assigns shall pay or cause to be paid to the said D. A. and N. A. Matthews, their heirs, executors, administrators or assigns, the sum of $18,250, payable as follows, to wit, $18,250 on or before the 1st day of June, 1935, with interest thereon at ten per cent, per annum, payable annually, according
“ Tt is further agreed: (1) That if the said mortgagor shall fail to pay such taxes * * * the said mortgagee may pay such taxes; * * * and the sum so advanced, with interest at — per cent, shall be paid by said mortgagor, and this mortgage shall stand as security for the same; (2) that a failure to pay any of said money, either principal or interest, when the same becomes due, or a failure to comply with any of the foregoing agreements, shall cause the whole sum of money herein secured to become due and collectible at once at the option of the mortgagee.’ ”
The defendants in their amended 'answer and cross-» petition, filed January 3, 1929, set up and rely upon usury as their sole defense. They expressly admit the existence of an unpaid first or prior mortgage of $17,000; the execution and delivery of plaintiff’s mortgage as alleged; in apt terms charge that the concurring agreements to pay the 10 per cent, by the terms of the note and mortgage, and in addition thereto to pay the taxes levied against the real estate involved, or such as might be levied against the mortgage and note in suit, constitute usury; that the defendants had paid interest at 10 per cent, on the $18,250 from date to June 1, 1926, in the sum of $1,700 ($1,825), and all taxes levied and assessed against said premises for 1926 and prior thereto; that on the 8th day of September, 1928, the defendants paid the taxes levied against the premises for 1927, and allege they are entitled to have the $1,700 ($1,825) thus paid credited upon the principal note, and deny the right of plaintiff to a foreclosure until the maturity of such note on June 1, 1935.
To this answer and cross-petition a reply was filed, which, in substance, may be considered a general denial.
Upon conclusion of the evidence, and after consideration of the briefs and arguments of counsel, the trial court found generally for the defendants and dismissed plaintiff’s petition and action. Plaintiff appeals.
. In the absence of the defense of usury, our previous decisions are decisive of the rights of the litigants herein. Thus, under provisions of mortgages, substantially identical with the language of the instrument in suit, we have sustained foreclosures based on accelerated maturity occasioned by the nonpayment of interest. Lowenstein v. Phelan, 17 Neb. 429; McCarthy v. Benedict, 89 Neb. 293; Moorehead v. Hungerford, 110 Neb. 315; Northwestern Mutual Life Ins. Co. v. Butler, 57 Neb. 198; National Life Ins. Co. v. Butler, 61 Neb. 449. And as to the effect of default by the mortgagor under tax covenants identical with those here presented, we are likewise committed to the view that — “A stipulation in a mortgage authorizing the mortgagee to accelerate the maturity of the mortgage debt, if the taxes on the mortgaged premises are not paid at or before the time they become delinquent, is not forbidden by statute, nor contrary to public policy, and may be enforced.” Further: “And the payment of such delinquent taxes after the commencement of an action to foreclose the mortgage does not deprive the mortgagee of the right secured, by the exercise of his option.” Hockett v. Burns, 90 Neb. 1. See Crawford v. Houser, 115 Neb. 62.
In Gibson v. Sherman County, 97 Neb. 79, this court, speaking through Sedgwick, J., has approved the'doctrine as to usury announced by the supreme court of the United States in Dwell v. Daggs, 108 U. S. 143, in effect holding, “the right of a defendant to avoid his contract is given to him by statute, for purposes of its own, and not because it affects the merits of his obligation,” and its penalties
Under our statutes the facts in the instant case, therefore, do not invoke the application of the maxims that, he who comes into a court of equity must come with clean hands, or that, he who seeks equity must do equity. The controlling maxim here applicable is, equity follows the law. The statutes heretofore quoted expressly provide for controversies involving usury, and enjoin judicial action by the court with express directions as to what shall be done. These terms are controlling in a court of equity as well as in a court of law. Indeed, in Stuart v. Durland, supra, and cases following the rule announced therein, the right of foreclosure to the extent limited by the statute quoted was expressly recognized, approved and directed. In Dawson County State Bank v. Temple, 116 Neb. 727, Good, J., in delivering the opinion of this court, in a case involving
The implication which the above language sustains, as relates to the facts in the instant case, is obvious, but a stronger reason is to be found in the express provisions of the statute. Our tax laws provide: “All property in this state, not expressly exempt therefrom, shall be subject to taxation, and shall be valued and assessed at its actual value.” Comp. St. 1929, sec. 77-201. “Taxes on all real property shall be a first lien thereon from and including the first day of December of the year in which they are levied until the same are paid.” Comp. St. 1929, sec. 77-203. See Taylor v. Harvey, 90 Neb. 562; Mutual Benefit Life Ins. Co. v. Siefken, 1 Neb. (Unof.) 860; Merriam v. Goodlett, 36 Neb. 384.
Sections 77-1501 to 77-1505, Conip. St. 1929, contain special provisions relating to the assessment of real estate mortgages, and provide that in the absence of an agreement the interests of mortgagors and mortgagees shall be separately assessed. Even so, it is also therein provided: “In case of nonpayment of any tax levied upon the interest of the owner or mortgagee or assigns, the land upon which the tax is unpaid shall be sold at the time and in the manner provided by law for the sale of real
We concede for the purpose of this opinion, but do not decide, that the defendants are entitled to have the interest paid by them ($1,825) credited on their principal note as of date of payment, and that no interest may be collected thereon. However, there is no contention that any attempt ever was, or will be, made to tax plaintiff’s note and mortgage except as under our statute it became an interest in the real estate. Therefore, this leaves for our consideration the words of the tax covenant, a part of plaintiff’s mortgage, to the effect that the mortgagors “shall pay all taxes and assessments levied upon said real estate * * * before the same become delinquent.” It may be remembered that originally the object and purpose of the tax clause in a real estate mortgage was for the' protection and preservation of the mortgage security. Such indeed still remains its mission. As a contract provision its true intent and scope must be determined from the language employed, the provisions of the statutes involved, the subject-matter, the object to be accomplished thereby, and the situation of the parties. So construed, “all taxes and assessments” can be given no other meaning
The motion for rehearing is overruled in part, the former judgment of this court is set aside, the judgment of the district court is reversed and the cause remanded, with directions for further proceedings in harmony with this opinion.
Reversed.