New England Mortgage Security Co. v. Casebier

*742 The opinion of the court was delivered by Gahvek, J. :

This action is based upon a note and mortgage. The only question presented for consideration is as to the amount of interest which the plaintiff is entitled to recover. The note provides :

“With interest from date until paid at 7 per cent, per annum, as per coupons attached. . . . On failure to pay interest within five days after due, the' holder may collect the principal and interest at once, and as stipulated in the mortgage made to secure this note.”

The mortgage, after the usual conditions, and after reciting the obligation of the mortgagor to pay the principal with interest thereon from date until paid at the rate of 7 per cent, per annum, contains the fol-

“In case of default of payment of any sum herein covenanted to be paid, for the period of five days after the same becomes due, or any default of performance. of any covenant herein contained, the said first parties agree to pay the said second party and its assigns interest at the rate of 12 per cent, per annum, computed annually on said principal note, from the date thereof to the time when the same shall be actually paid.”

In case of default and foreclosure, may the plaintiff recover, according to the terms of the mortgage, interest’at the rate of 12 per cent, from date, or is he limited to the 7 per cent, expressed in the note?' The two instruments constitute parts of one contract. (Muzzy v. Knight, 8 Kan. 456 .) But the note is the evidence of the debt, and is the principal obligation of the debtor, the mortgage being simply incidental thereto; and in case of variance or repugnance in iheir respective conditions or terms, the note will con *743 trol. (Hutchinson v. Benedict, 49 Kan. 545 ; Keys v. Lardner, 55 id. 331.) Were it not for the reference made in the note to the mortgage, it would be plain that the provisions of the mortgage could not be enforced without wholly ignoring or changing the agreement as to the rate of interest as it is expressed in the note; for the variance between them would be more radical than that which existed in the cases cited. Counsel for plaintiff construe the note as though it read: ‘ ‘ On failure to pay interest within five days after due, the holder may, at once, collect the principal, with interest as stipulated in the mortgage ” ; or, as stated in their brief, “On failure to pay interest, principal and interest may be collected as stipulated in the mortgage.” We cannot agree with them in such construction. That provision of the noté has, we think, reference solely to the !hne and manner of collection. It makes mention of “the principal and interest,” evidently meaning the principal and interest, at the rate of 7 per cent, which is expressed in the preceding part of the note. The reference to the mortgage — “and .as stipulated in the mortgage ” — includes the stipulations therein relative to both principal and interest; and a reasonable and natural construction limits it to the manner of procedure for the enforcement of the payment of the principal with the interest stipulated in the note. Had it been the intention of the parties, by thus referring to the mortgage, to incorporate into the contract the payment, on certain conditions, of interest from date at the rate of 12 per cent., instead of at the rate of 7 per cent, as stated in the note, until the principal was paid, they could easily have expressed that intention in plain language. It is only by a strained construction that the note can be given the *744 meaning contended for by plaintiff; and it is one which, in our opinion, was not in contemplation by the makers of the note.

Judgment affirmed.

All the Judges concurring.