Bank of San Luis Obispo v. Johnson

By the Court : “ In case of default by the mortgagor in the payment of said note or interest, or in the performance of any of the conditions hereof, then the mortgagee may at its option either commence proceedings to foreclose this mortgage in the usual manner, or cause the said premises or any part thereof to be sold,” etc., is the phraseology of the mortgage ; but we find nothing in these words which, by fair intendment, gives countenance to the idea that by the mere failure of the defendant to pay the stipulated 102 interest accruing monthly upon the debt, the principal sum should become due. By the distinct terms of the promissory note delivered simultaneously with the mortgage, the principal sum was not to become due until two years after the date of the note—and the stipulations contained in the mortgage are not inconsistent therewith. Thus the provision already quoted, to the effect that if default be made in the payment of the note or the interest thereon, the mortgagee may foreclose, etc., is fully satisfied by limiting the foreclosure proceedings to the collection of so much of the interest as may appear to be due. The parties to a loan may, and often do, provide that the principal sum, not otherwise due, may become due by default of the debtor in the payment of interest at stipulated periods of time, but in this instance we do not see that they have done so. Judgment reversed and cause remanded.