Case ID: iowa_67/html/0676-01.html
Source: Caselaw Access Project
Author: {"author": "Beck, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wood v. Whisler.
    1. Promissory Mote: interest: whether payable annually or not: construction. The notes declared on bore interest at the rate of 7 per cent per annum, and each contained the following clause: “ If interest thereon is not promptly paid annually, the same becomes a part of the principal, and shall bear the same rate of interest.” Held that it was optional with the maker whether he would pay the interest annually or not, and that no action on the notes could be maintained until the principal was due.
    
      Appeal from Fremont Circuit Cou/rt.
    
    Tuesday, December 15.
    
      Action to foreclose a mortgage. A demurrer to the petition, on the ground that it does not show that the debt secured by the mortgage is due, was sustained. Plaintiff appeals.
    
      W. P. Ferguson, for appellant.
    
      James McOabe, for appellee.
   Beck, Ch. J.

The mortgage was executed to secure two promissory notes each dated in August, 1883, one due in 1887, and the other in 1888. By their terms they draw interest at the rate of seven per cent per annum, and each contains a condition in the following language: “And if interest thereon is not promptly paid annually, the same becomes a part of the principal, and shall bear the same rate of interest.” The mortgage contains the following condition: “ And it is further agreed, if default shall be made in the payment of said sums of money, or any part thereof, princi<pal or interest, * * * then the whole amount of the indebtedness -to become due.” The petition alleges that a year’s interest is due and unpaid, and that, by reason of default in payment of the interest at the end of the year, the whole debt, with interest, becomes collectible. The demurrer assails the petition on the ground that it does not show that the debt, or any part thereof, is due. "We think the demurrer was rightly sustained. Neither the notes nor mortgage provide for the payment of interest annually. They simply provide that in case it is not so paid it shall draw interest; thus leaving it optional with the defendant to pay the interest at the end. of each year. The instrument will bear no other construction, and the case therefore demands no further consideration.

Affirmed.