Court Opinion

ID: 5459402
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:29:55.627958+00
Date Added: 2024-06-11T08:32:41.100304
License: Public Domain

Sutherland, J. (dissenting.)
I cannot agree with my associates in their Conclusion to affirm the judgment of the *551special term in this case. I think that judgment should he reversed with costs.
On the 2d day of December, 1855, the plaintiffs conveyed to the defendant, Smith, a certain lot of land in the city of New York, for the consideration of six thousand dollars, and at the same time Smith executed to the plaintiffs his bond and a mortgage on said premises for four thousand dollars of the consideration money. The bond and mortgage were dated back, the 27th day of June, 1855, for reasons stated in the defendant’s answer, which are admitted by the plaintiffs; and the case stands precisely as if the bond and mortgage had been executed on the 27th day of June, 1855, the day they bear date. The bond was conditioned for the payment of the said sum of four thousand dollars, on the 27th day of June, 1860, with interest thereon half yearly. The condition of the bond also contained a special agreement, that in case the interest, or any part thereof, should not be paid on the day when the same was payable/ and should remain unpaid and in arrear for the space of twenty days, then the principal sum of four thousand dollars, with all arrears of interest thereon, should, at the option of said plaintiffs, become due and payable immediately thereafter, although the period first above mentioned for the payment of the principal sum might not have expired. On the 27th day of December, 1855, one half year’s interest fell due. It was not paid on that day, and remained unpaid for twenty days thereafter; and thus the principal as well as interest was due and payable on the 16th day of January, 1856, according to the special agreement inserted in the condition of the bond. The mortgage recites the condition of the bond, including the special clause or agreement by which the whole principal was to be due and payable, in case the interest remained due for twenty days; and was given to secure the payment of the bond. On the 22d day of January, 1856, the plaintiffs’ attorneys notified the defendant, that the bond and mortgage had been placed in their hands for collection, and that the same had by the terms thereof become due and payable. This *552suit was commenced on the 4th day of February, 1856, to foreclose the mortgage, the plaintiffs claiming that the principal as well as interest was due and payable. On the 25th day of January, 1856, the defendant offered to the plaintiffs’' attorneys the half year’s interest, which fell due on the 27th day of December, 1855, with interest on the interest, and to stipulate in writing to pay the costs of the plaintiffs in this action, on their being adjusted. This offer was declined. On the third day of November, 1855, the plaintiffs were unable to give an unincumbered title to the premises, by reason of a judgment for -¡$518.18, which had been recovered against them in July previous, and which was a lien on the premises. But the defendant, at the request of the plaintiffs, consented to accept and did accept the deed, and execute the bond and mortgage, on the plaintiffs executing to him a written agreement, that they would within ninety days from that time, cause said judgment to he canceled or removed, so that the same should cease to be a lien, or deposit the amount of the judgment in the hands of the defendant, to he held until such judgment should be discharged. The judgment was canceled on the 31st day of December, 1855, hut -the defendant received no notice thereof, nor had he any knowledge of such cancelment, until the 25th day of January, 1856. On these, facts, the defendant having paid into court the interest due on the 27th day of December; and the interest thereon, the judgment of the special term was, that the complaint should be dismissed.
Now there not being in -this case a pretense of any surprise, mistake or fraud in the execution of the papers or agreements, out of which the rights of the parties arise, I do not see how the judgment of the special term can be sustained, without setting aside the agreement which the parties themselves made, and making a new one for them. The plaintiffs having1 the right of disposing of their property, the principle is clear, that they had the right of disposing of it on such terms as, they thought proper to fix, provided they were not illegal, or *553so unreasonable that the law would presume them void. (Roe v. Galliers, 2 T. R. 133.) Was the agreement of the defendant, that if the interest remained unpaid for 20 days, then the whole principal sum should be due and payable, illegal, or so unreasonable that the law pronounced it void ? It was neither illegal nor unreasonable. Why then should it not be enforced ? If public policy, not declared either by the common law or by statute, is a legitimate principle, upon which either courts of law or of equity, can declare contracts between individuals void, (which I do not admit,) what has public policy to do with the time or the contingency at which or upon which, a simple contract debt shall become due or payable ? It is the policy of the law and of the public, that individuals should bo left to make their own bargains and regulate their own affairs, except as restrained by law, or their public duties. Admitting that there are certain cases, in which a court of equity will relieve from a forfeiture, upon what principle is it said, that the plaintiffs in this action seek to enforce a forfeiture ? They seek to foreclose their mortgage because they say it is due. If it is due, it is a common case of foreclosure; and the foreclosure of this mortgage is no more the enforcement of a forfeiture, than any other case of foreclosure.
Is the mortgage due? It is, if the defendant’s express agreement is valid, and is to be enforced. Is the enforcement of it, the enforcement of a forfeiture ? If enforced, what will the defendant have to pay ? The principal and interest. If not enforced, and the defendant is relieved from his own default, what will he have to pay in 1860, when the mortgage becomes due, without reference to the special interest clause ? Principal and interest, and nothing more. How can the enforcement of the payment of a debt, with the legal interest and nothing more, be called the enforcement of a forfeiture ? What would the defendant have forfeited, by paying his debt with interest in 1856, rather than in 1860 with interest; the rate of interest being fixed by law; he paying the same rate in either case? Had money cheapened, and the defendant *554been able to procure the principal at five per cent, and pay off the mortgage in 1856, he certainly would not have complained, nor called his payment then a forfeiture. As he agreed to pay seven per cent—the lawful interest—how could the payment of the mortgage, with seven per cent, in 1856, be called a forfeiture? I can see no reason for calling, this foreclosure the enforcement of a forfeiture. The plaintiffs ask for no more than they bargained for; and the defendant could not have been compelled to pay any more than he agreed to pay. The parties agreed, that in default of the payment of the interest for a certain number of days, the whole principal should be due and payable sooner than it otherwise would. It was lawful for them so to agree, and if the default happened—if the contingency occurred—the principal thereupon became due and payable, by the agreement of the parties, in 1856, as it would have done in 1860, without such special agreement. What more is there in this case ? Was it the plaintiffs’ fault, or owing to their laches, that the defendant did not pay the interest within the twenty days ? What equity has the defendant, what grounds for relief, growing out of the plaintiffs’ agreement to discharge the judgment, which was a lien on the mortgaged premises, executed at the same time the bond and mortgage were executed ? The plaintiffs, by their agreement, agreed to cancel the judgment, or to deposit the amount thereof in the hands of the defendant within ninety days; say, on or before the first day of February, 1856. The defendant, by his bond or agreement, executed at the same time, agreed to pay one half year’s interest on the $4000, to the plaintiffs, on the 27th day of December, 1855. How can the defendant say that his payment of the interest on the 27th of December, 1855, was dependent on the plaintiff’s discharging or depositing in his hands the amount of the judgment on the 1st of February, 1856—more than a month after the interest became due ? Did the plaintiff’s agreement to discharge the ju4gmept withiq three piontfis, reyoke the defendant’s agree*555ment to pay the interest within two months ? The parties must be presumed to have known and understood' what they mutually agreed to, and to have intended then to fulfill their respective agreements.
The agreements were in no way dependent upon each other. The defendant’s undertaking to pay the interest was not upon condition that the plaintiffs should remove the lien of the judgment.
To permit the defendant to set up in this action, in bar of the plaintiff’s right of foreclosure, the want of notice that the judgment had been canceled before the twenty days expired, is in effect to make a new contract between the parties, and by it to take away the plaintiff’s rights, under the agreements actually made by the parties themselves. The judgment was in fact canceled or removed on the 31st day of December, 1855. Neither the plaintiff’s written agreement, nor any principle of equity or fair dealing, outside of it, that I can see, called upon the plaintiffs to notify the defendant that the judgment had been canceled, as a condition of their right to exact from the defendant the fulfillment of his agreement. The defendant had no right to expect, or to wait for such notice before he paid the interest. If he had gone and paid the interest at any time within the twenty days, it would have been natural for him to have asked whether the judgment had been canceled, and he then would probably have been informed that it had.
If the plaintiffs had not removed the lien of the judgment, or deposited the amount thereof with the defendant, within the ninety days as agreed, then the amount of the same should have been deducted from the mortgage; but I cannot see how a breach of the plaintiff’s agreement, on the 1st of February, could have justified a breach of the defendant’s agreement on the 27th of December previous, and the continuous default of the defendant, for twenty days thereafter.
Outside of the agreement I do not find an act or a declaration of the plaintiffs to mislead the defendant, and estop them *556from enforcing their rights under the written contracts. I think, therefore, the judgment of the special term should he reversed, with costs.
[New York General Term,
February 1, 1858.
Judgment affirmed.
Davies, Clerke and Sutherland, Justices.]