Maitland v. Godwin — 46 N.Y. St. Rep. 959

Majority

p. 959

Margaret S. Maitland, Resp’t, v. Thomas S. Godwin et al., App’lts.

(Supreme Court, General Term, First Department,

Filed June 3, 1892.)

Headnote

Mortgage—Non-payment oe instalment op principal.

Where the bond referred to contains a distinct agreement that upon non-payment of an instalment the whole principal sum should become due at the option of the mortgagee, and the mortgage contains a proviso that if default be made in the payment of principal or interest or any pait of either, the mortgagee may sell and out of the proceeds retain the principal and interest which shall be then due on the bond, the mortgagee has the right to foreclose for the whole principal sum upon the non-payment of an instalment thereof.

Appeal from a judgment of foreclosure and sale rendered at special term.

W. C. Dupignac, for app’lt; George L. Rives, for resp’t.

The only exception filed by the appellant is to the conclusions of law. The learned justice who tried the cause found as a fact that the defendants failed to pay part of an instalment of the principal due (under the mortgage sought to be foreclosed) on the 25th day of May, 1890, and that by reason of such non-payment the plaintiff had declared her option that the whole principal sum remaining due should become payable. To this finding there was no exception. The appellant contends that there is no provision in the mortgage that the mortgagee should have the right to foreclose for the whole principal sum upon the nonpayment of an instalment. But he is in error in this respect. The mortgage refers to the bond, which contains a distinct agreement that, upon the non-payment of an instalment, the whole principal shall become due at the option of the mortgagee; and in addition there is a special proviso in the mortgage that if default shall be made in the payment of the principal or the interest, “ or of any part of either,” the mortgagee may sell, etc., and out of the money arising from said sale retain the principal and interest which shall he then due on the bond. That is, the whole principal if the option

p. 960

given by the bond was exercised upon the non-payment of the instalment

As to the Croton water rent, taxes and ground rent which were unpaid at the time of the trial, the decree authorized the purchaser to pay them out of the purchase money. It is only in case the purchaser fails to avail himself of this privilege tnat they are payable to the plaintiff; and this is correct, as she is liable therefor, under the terms of the mortgage, upon entry and assumption of the covenants with regard thereto. In neither event can the appellant be prejudiced by the decree on that head, as, if the amounts in question have actually been paid, they will not be paid the second time, and if unpaid, they are liens. In any event the proper surplus will be deposited.

The judgment should be affirmed, with costs.

Yak Brunt, P. J., concurs.