68 Tenn. 438 | Tenn. | 1877
delivered the opinion of the court.
The question in this case is the proper construction of the following obligation, to-wit:
“Eight years after date, with interest from date, to be paid annually, I promise to pay Delilah Marsh five hundred dollars for value received June 10, 1862. It is understood, if I fail to pay the interest annually on above sum, that it is all to be due from that date, that is, the date of my failure, and the said Delilah Marsh, or. her representative, may proceed to collect the principal and interest remaining on said debt after such failure. Witness my hand and seal. The above to be in current bank notes.
“(Signed) Wm. B. Hudson, [l. s.']”'
The interest was not paid annually, the only payment being credits upon the note, to-wit: $20, April 17, 1866; $65, January 22, 1867; $20, December 5, 1868. Hudson execafet^ a deed of trust upon certain lands to secure the debt, the deed in substance following the terms of the above obligation. Ho steps were taken to enforce the collection of the money until after the expiration of more than eight years from the date of the note, to-wit, in 1875, when the trustee was proceeding to sell the land in accordance with the power in the deed, when the heirs of Hudson (he having died) filed the original bill, insisting that by the terms of the note it fell due at the
We think the decree is erroneous. We hold that the condition annexed to the obligation, that the failure to pay the interest annually should cause the entire amount to fall due and give the payee the right then to proceed to collect the entire amoiurt, was a stipulation for the benefit oltln^ payee, Mrs. Marsh, in the nature of a penalty to enforce the prompt payment of the annual installments of interest — a .stipulation that Mrs. Marsh might have enforced, but which she might waive. This was not a stipulation for the benefit of the obligor, Hudson. He had no right at the expiration of the first year to pay the whole amount of principal and interest on the note, and had he tendered it in proper funds Mrs. Marsh would not have been bound to receive it. Such was not the
It was held in the case of Caruthers v. McBurney, 3 Sneed, 590, that a stipulation in a contract for the sale of land, that the failure to pay the money on the day specified should render the contract void, was a stipulation for the benefit of the vendor, which he might, waive, But which the purchaser could not insist upon; and we have applied the same principle in one or more unreported cases. And so we hold in this case, that the stipulation in question was for the benefit of the payee in the note, and has been waived, and that the obligation (ell due eight years Irom date.
The decree will be reversed, and a decree rendered here in accordance with this opinion.