Case ID: misc_67/html/0286-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Giegerich, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The City Real Estate Company, Plaintiff, v. Archibald J. MacFarland et al., Defendants.
    (Supreme Court, New York Special Term,
    April, 1910.)
    Interest — Rate — Terms of contract.
    Where a mortgage provides for the payment of the principal on a given date with interest thereon at a specified rate less than the legal rate “ until the whole of said principal sum is paid ” the contract governs the rate of interest until payment of the principal or until the contract is merged in a judgment; and the interest on the principal sum which has matured is not to he computed as damages according to the rate provided by law.
    Action to foreclose a mortgage.
    Harold Swain, for plaintiff.
    Spencer, Ordway & Weirum (Nelson S. Spencer, of counsel), for defendant George I. Malcolm and others.
    Everly M. Davis (Henry L. Scheuermann, of counsel) for defendants Frederick H. Whithin and others.
    Alvin C. Cass (Albert A. Wray, of counsel), for defendants Burton W. Gibson and another.
   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 five and one-half 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 the 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; Taylor v. Wing, 84 id. 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.

Ordered accordingly.