118 P. 666 | Idaho | 1911
This action was brought by the respondent to foreclose a mortgage dated July 1, 1909, and executed by the appellant, the Gooding Implement and Hardware Co., a corporation, upon certain town lots in the town of Gooding, to secure the payment of a certain promissory note of same date for $4,000, due in three years after date, with interest at the rate of eight per cent per annum, interest payable semi-annually. The mortgage contained the following provision: “But in ease default be made in the payment of said principal sum, or any part thereof, as provided in said note, or if the interest be not paid as herein specified, that it shall be optional with the said party of the second part, his executors, administrators, or assigns, to consider the whole of said principal sum expressed in said note immediately due and payable, although the time expressed in said note for payment has not yet arrived.”
The interest payment due January 1, 1911, was not paid, as the said implement and hardware company had become insolvent and was unable to pay its debts. However, on the 24th of January, 1911, said implement and hardware company sent its check to the respondent for $160, the semi-annual interest due on January 1, 1911. That check was protested
It appears that on February 7, 1911, a meeting of the creditors' of said corporation was held at the town of Gooding, and said corporation assigned and transferred on that day all of its property, including the property in question, to William Bowen as trustee for the creditors, and said trustee immediately entered into the possession of all the property of said corporation for and in behalf of the creditors. On that day the respondent, who resided in Denver, wrote a letter to the appellant corporation, stating that he had received notice of the protest of said interest cheek and asked what disposition the company desired to make of it. Said letter was turned over to said trustee and he wrote to the respondent and stated that the estate of the appellant corporation had been turned over to the creditors, and asked that the matter of the protested check be permitted to remain open for ten days and that respondent’s claim had been placed among the preferred claims. It appears that there were several communications in the form of letters and telegrams passed between the parties. On February 23d, said trustee wired respondent as follows: “Have you protested check from Gooding? Answer so can remit you to-day.” On the same day respondent answered said message as follows: “Protested check returned to Governor Gooding. Forward amount here and I will return check.” On the same day, and upon receipt of that telegram, the trustee forwarded his check for $160 to cover the protested check for interest due on mortgage, stating that he did not know the amount of protest fees but would forward same when advised, and also asked respondent to execute duplicate vouchers. Said check was received by respondent on February 25th, but he refused to accept it on the ground that he could not be expected to accept a check on the Gooding
The first assignment of error is that the court had no jurisdiction to enter a personal judgment against the trustee. All of the property of the appellant corporation had been turned over to said trustee, and had the mortgaged property not sold for sufficient to pay the mortgage debt, the judgment creditors would no doubt have had the right to resort to other property in the hands of the trustee. However, it appeared on the argument of the case that the property was sold under said foreclosure proceeding and sold for a sufficient amount to fully satisfy the mortgage debt, so the judgment has already been satisfied against the trustee and no personal judgment has attached, and never could have attached, against him.
It is next contended that the respondent had waived the right to declare the principal debt due on account of the failure to pay the interest due January 1st, 1911, because of the communications had between the trustee and the respondent in regard thereto and the tender of said interest made by the trustee. As shown from the facts above stated, the check which was sent by the appellant corporation to the respondent at Denver to pay said interest was not paid and was protested; that thereafter the creditors of the appellant
After a careful review of all of the evidence in regard to waiver, tender and estoppel, we are satisfied that it fails to establish either waiver, tender or estoppel. The bringing of the foreclosure suit on February 13, 1911, was an election by the respondent to declare the principal of said note due and payable under the provision above quoted from said mortgage. That stipulation in the mortgage is not in the nature of a forfeiture or penalty, as suggested, by counsel, but was a part of the contract and of its substance. (See Dean v. Nelson, 10 Wall. 158, 19 L. ed. 926.) It was held in Houston v. Curran, 101 Ill. App. 203, that such a provision in a mortgage is a valid and binding part of the contract, and is not objectionable as being in the nature of either a penalty or a forfeiture. The supreme court of Iowa, in passing on a similar question, in Swearingen v. Lahner, 93 Iowa, 147, 57 Am. St. 261, 61 N. W. 431, 26 L. R. A. 765, held that a stipulation or option giving a mortgagee a right to begin a foreclosure upon default of the payment of 'interest is not in the nature of a penalty or forfeiture, but is merely an agreement for the bringing of the note and mortgage to maturity before the time provided for therein, and that no notice other than the bringing of the action is necessary to show that the mortgagee has exercised the option and elected to declare the debt due and payable.
From the whole record we are satisfied that the judgment must be affirmed, and it is so ordered, with costs in favor of the respondent.