Case ID: nys_122/html/0477-01.html
Source: Caselaw Access Project
Author: {"author": "GIEGERICH, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CITY REAL ESTATE CO. v. MacFARLAND et al.
    (Supreme Court, Special Term, New York County.
    April 15, 1910.)
    Interest (§ 37)—Mortgage—Rate.
    Where a mortgage provides for payment of the debt at a specified date, with interest thereon to be computed at 5% per cent, per annum until the principal is paid, the contract rate of interest governs until payment of the principal, or until the contract is merged in the judgment of foreclosure, and the interest on the principal sum which has matured is not to Be computed as damages according to the rate provided by law in an action to foreclose.
    [Ed. Note.—For other cases, see Interest, Cent. Dig. § 77; Dec. Dig. § 37.)
    Action by the City Real Estate Company against Archibald J. MacFarland and others. Judgment for defendant.
    See, also, 121 App. Div. 652, 655, 106 N. Y. Supp. 333, 335.
    Harold Swain, for plaintiff.
    Spencer, Ordway & Weirum (Nelson S. Spencer, of counsel), for defendants Malcom and others.
    Everly M. Davis (Henry L. Scheuermann, of counsel), for defendants Whithin and others.
    Alvin C. Cass (Albert A. Wray, of counsel), for defendants Gibson and another.
    
      
      Far other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes
    
   GIEGERICH, J.

The mortgage in suit provides for the payment of the debt on December 13, 1906, with interest thereon to be computed at and after the rate of 5% per cent, per annum until the whole of said principal sum is paid. Under such a provision the contract rate of interest governs until payment of the principal, or until the contract is merged in the judgment, and the interest on thé principal sum which has matured is not to be computed as damages according to the rate provided by law. O’Brien v. Young, 95 N. Y. 428, 47 Am. Rep. 64; Taylor v. Wing, 84 N. Y. 471. The cases relied on-by the plaintiff are not applicable, for the reason that in none of them did the mortgage, as in the present case, provide for the payment of the stipulated rate of interest until the principal sum is paid.

All other questions presented for determination have been disposed of as indicated upon the margin of the proposed findings of the respective parties. A copy of the complete decision may be submitted for my signature upon two days’ notice of presentation.