Stevens v. De Cardona

California Supreme Court
Stevens v. De Cardona, 53 Cal. 487 (Cal. 1879)
McKinstry

Stevens v. De Cardona

Opinion of the Court

By the Court, McKinstry, J.:

The stipulation in the mortgage, that in case of default in the payment of the interest, on or before the 5th of any month, to McDonald, agent, he should take charge of the mortgaged premises, collect the rents, deduct interest, and pay excess to mortgagor, does not necessarily conflict with the previous stipulation, that in default of payment of interest for a period of sixty days the mortgagee might consider the principal sum due and foreclose.

By the stipulation first mentioned, if the mortgagor failed to pay interest, or any part thereof, on the 5th of any month, McDonald would have the right to collect the rents and apply the same to the payment of interest. McDonald might pay out of the rents received such sums as by the contracts between the mortgagor and the tenants in possession were to be paid by the former, but he was not authorized to pay taxes or make other expenditures merely because the mortgagee, by the terms of the mortgage, had the right to make them (and to have his lien therefor) in case they were not paid by the mortgagor. To construe the stipulation as authorizing the agent, McDonald, to make such expenditures, would be to construe it as authorizing him to pay such sums as would, perhaps, reduce the rents received, so that they would be insufficient to meet the interest, *491and thus set the sixty days running contrary to the meaning and intent of the covenants of the mortgage.

Judgment and order reversed, and cause remanded for a new trial.

Reference

Full Case Name
JAMES STEVENS v. S. A. DE CARDONA and EUFROSINA DE CARDONA
Status
Published
Syllabus
Construction of Mortgage.—A stipulation in a mortgage that in case of default in the payment of the interest upon the note, secured by the mortgage, on or before the 5th day of any month, to the agent of the mortgagee, the agent should take charge of the mortgaged premises, collect the rents, deduct interest, and pay the excess to the mortgagor, does not conflict with a previous stipulation in the same mortgage, that in default of payment of interest for a period of sixty days, the mortgagee might at his option consider the principal sum due and foreclose. Same—Expenditures from Rent Money.—Although by a provision of the mortgage it was covenanted that in case the mortgagor did not keep the property fully insured, or did not pay all taxes and assessments, the mortgagee might pay the same and have his lien therefor with interest, yet the agent named in the second of the stipulations was not authorized to pay such taxes, or assessments, or premium insurance, or make other like expenditures out of the rents received, and thereby, perhaps, reduce the amount received as rents below the interest to be paid on the note and mortgage, and set running the sixty days mentioned in the first of the stipulations.