Renard v. Hatton

Ladd, J. mortgagesright1??forementoflnteí" est' A condition of the mortgage is that, “in default of any of the stipulations, provisions or conditions of this mortgage or said note, then the whole amount secured hereby shall immediately become due and payable.” Another is that payment of the promisS01T note he made at maturity, “according to the terms thereof.” If, then, the interest was not paid when promised in the note, the payee had the option to declare the amount of the note due and payable. We necessarily turn to the note,-to ascertain whether there had been any default in the payment of interest. In it, the [47] maker promises “to pay to Henry Renard . . . five thousand nine hundred dollars . . . for value received, with interest at the rate of 5 per cent per annum after date until paid, payable annually; and if the interest be not so paid, it shall thereupon become a part of the principal, and draw interest at the same rate and on the same terms as the original sum above named.” That the interest may become, a part of the principal does not obviate the promise to pay it “annually.” This is a condition of the note, and one on default of which the mortgage authorized the mortgagee to declare “the whole amount secured” by the mortgage due and payable. Failure to pay the interest “annually” was none the less a “default” because of what might subsequently become of the interest. Evidently, it is made by the note a part of the principal for the purpose of bearing interest, and becomes effective whether the entire note becomes due or not. "Whatever the purpose, and even though the time between this happening and the maturing of interest be momentary, as suggested by appellant, the fact of there having been a .default in the promise to pay it “annually” remains, and we see no obstacle in the way of the mortgagee’s taking advantage of the broken condition at any time before payment. The case is readily distinguishable from Wood v. Whisler, 67 Iowa 676; for in that case, as said by the court, neither the notes nor the mortgage provided for the payment of interest annually. ‘ ‘ They simply provide that, in case it is not so paid, it shall draw interest, thus leaving it optional with the defendant to pay interest. ’ ’ Here, there was a distinct promise to pay annually, an omission so to do, because of which the mortgagee was authorized by the terms of the mortgage to elect to declare the entire indebtedness due. He did so, and was entitled to the relief prayed. The ruling in overruling the demurrer has our approval, and is — Affirmed. ■ Evans, C. J., Gaynor and Salinger, JJ., concur.