43 Neb. 517 | Neb. | 1895
March 19, 1888, Mordecai C. Maxwell and wife made a mortgage to the Dakota Mortgage Loan Corporation upon a tract of land in Dawes county to secure a note for $200, payable April 1, 1893, with interest at seven per cent, payable semi-annually. On the 4th day of September, 1889, the same persons made another mortgage upon this land in .favor of William Stewart and Alexander W. Stewart to secure the payment of a note for $800, payable September 1, 1894, with ten per cent interest, payable semi-annually.
The Stewarts answered, setting up their mortgage and .alleging a default in the payment of several installments of interest then due as well as a further default because of the breach of the covenant against incumbrances contained in the mortgage; the incumbrance constituting the breach being the plaintiff’s mortgage.
Kime demurred, the language of his demurrer being as follows: “Come now the defendant, James B. Kime, by Spargur & Fisher, his attorneys, and enters herein his demurrer to the petition and cross-petition, and for the following reason: Because it appears upon the face of said cross-petition that it does not state facts sufficient to constitute a cause of action, or to entitle them to relief against this defendant.” This demurrer purports to be directed against both the petition and cross-petition, but states no ground of demurrer against the petition. Therefore, by virtue of section 95 of the Code of Civil Procedure it must be taken as a demurrer to the petition on the ground that ■it does not state facts sufficient to constitute a cause of action.
Mordecai Maxwell answered, admitting the execution of the plaintiff’s mortgage and denying all other allegations of the petition. He also asked that Alfred Bartow be made a party He then averred that he had put into the hands of Bartow $250, and constituted Bartow his agent for the purpose of paying such sum in satisfaction of plaintiff’s mortgage; that Bartow did not pay the same, but converted said
The evidence showed beyond all controversy that Bar-tow was the agent of the Stewarts; that Maxwell applied to him for a loan; that Bartow informed him that the incumbrance caused by plaintiff’s mortgage must be cleared away in order to procure the loan, and that Maxwell assured him that it could be discharged at any time. Maxwell and Bartow then entered into correspondence with the-agent of the Dakota company with a view of procuring a. release of its mortgage. Bartow offered six months’ interest in advance as an inducement for the release. He afterwards offered to pay the debt with interest in full until its maturity. All this was with the knowledge of Maxwell. Pending the negotiations the mortgage to the Stewarts was executed. On September 9, 1889, Bartow and Maxwell were met with a point blank refusal on the part of the Dakota company to accept payment of its mortgage before maturity. It was then agreed between Maxwell and Bar-tow that Bartow should withhold from the $800, $256 as-security for the Stewarts against the plaintiff’s mortgage-A statement was then prepared on this basis and the remainder of the money resulting from the Stewart loan paid over to Maxwell. On these facts the court established the lien of plaintiff as a first lien and decreed foreclosure. It then found that Bartow, on behalf of the Stewarts, had withheld $256 to apply in payment of the plaintiff’s mortgage, and that three months from the date of the mortgage-to the Stewarts would have been a reasonable time for-making such payment and procuring a release. The court then established the mortgage of the Stewarts as a second lien, allowing interest on $800 for three months and interest on $544 for the remainder of the time — so ascertain
On behalf of Maxwell the argument is that the plaintiff’s assignor, having refused to receive payment of its mortgage, should not be permitted to foreclose before its maturity according to its terms; that, if this be not true, then the default was brought about by the failure of the Stew-arts to apply the money withheld by them in making .interest payments; that the Stewarts should not be permitted to foreclose on account of default in interest while withholding a portion of the loan greater than the interest due; that in any event under the facts the burden of the costs should be cast upon the mortgagees. The plaintiff certainly had a right to foreclose. The note, to secure which his mortgage was given, was payable at a day certain. The payee was not under any obligation to accept payment before maturity, and Maxwell acquired no rights as against him by offering to pay before; under his contact he had no-right to do so. The duty of the debtor was to pay the interest installments when they matured, and the principal debt when it matured. The right of the creditor was to receive payment at such times and not before. The appellants have, therefore, shown no defense against the plaintiff’s foreclosure, nor any equity whereby to subject the plaintiff to costs. As to the Stewarts, the case might be different if the appellants had not made default on their mortgage.
In one respect we think the court erred. Under the ■evidence we can see no foundation for allowing interest on the $256 withheld for three months or any other time. When the agreement was made it was known the first mortgagee would not accept payment, and there was no occasion for the Stewarts to keep this money for any time at the disposal of Maxwell. It was simply withheld to meet the first mortgage when it matured, and neither Maxwell nor Kime had the use thereof. The amount found due on the mortgage should, therefore, be reduced by $6.40 — the interest at the rate the mortgage bore on $256 for three months. So modified the decree will be affirmed, as under the circumstances we see no reason for not sustaining the discretionary act of the trial judge in taxing the costs against the appellants.
Decree accordingly