McKissick v. Cannon

By the COURT.

On two of the three notes mentioned in the mortgage the interest is payable annually, and if not so paid, it is to draw interest at the same rate as the principal. The mortgage contains a stipulation to the effect that if the principal or interest shall not be punctually paid when the same becomes due, as in the promissory notes mentioned, then the principal sum and interest shall be deemed and be taken to be wholly due and payable, and proceedings may be taken for the recovery thereof. This stipulation in the mortgage was printed, while the copies of the notes were in writing. If the stipulation is valid—that is, if it is not repugnant to the terms of the notes—the action was not prematurely brought, and the court erred in dismissing it, so far as it related to the foreclosure of the mortgage, and retaining it only for the purpose of the reformation of the mortgage.

Stipulations of that character are frequently found in mortgages, and they cannot be justly regarded as inconsistent with the promissory notes intended to be secured. The promissory notes thus secured may not, and it is not requisite that they should, contain all the terms of the agreement made by the *68parties. Stipulations to the effect that taxes and assessments paid by the mortgagee shall be added to the principal sum, bear the like rate of interest, and become payable at the same time, are valid, and are not repugnant to the terms of the notes, though not therein mentioned. There is no better reason for holding that the stipulation in this case is invalid on the ground suggested than there would be to hold that a stipulation is invalid as repugnant to the promissory note that provides that if the note is not paid within a specified time, which will occur after the maturity of the note, the mortgagee may institute proceedings for the sale of the mortgaged premises; See Whitcher v. Webb, 44 Cal. 127.

The order of the court dismissing the action, except in so far as it sought for a reformation of the mortgage, is, in our opinion, erroneous.

Judgment reversed and cause remanded. Remittitur forthwith.