Moyer v. Garrett ( 1880 )

Mr. Justice Green

delivered the opinion of the court, November 26th 1880.

There was no necessity for the introduction of parol testimony to explain the meaning of the contract between these parties. We are very clear that by its express terms the interest on the deferred payment was to be paid annually. If we do not give it this meaning we-practically reject the word “ annually,” from the contract. The interest would be payable.at the end of the seven years without that word. Hence, if the contention of the defendants is correct, we would have to hold the word a meaningless surplusage. We have no right to do that. Moreover the word is an adverb. It cannot qualify the payment of the principal sum because that is expressly payable in solido at the end of seven years, unless the purchaser chooses to pay at an earlier date. It can, therefore, only qualify the payment of the interest. But the learned court below' held that although the interest was payable annually, ejectment would not lie on the articles for its non payment. No authority is cited, nor is any reason given in the charge for that opinion, but we presume it must have been founded upon the idea that interest is no part of the purchase-money, and hence, would not come within the rule which allows a vendor under articles to enforce the payment of the purchase-money by action of ejectment. The distinct question does not appear to have been ruled in any direct decision of this court, but the relation which accruing interest bears- to the principal sum on which it is payable has been well established, and in such a mariner as removes all difficulty from this case. Prior to the case of Bank v. Chester, 1 Jones 282, it had been determined that a sale of mortgaged premises on a judgment against the mortgagor for a single instalment of the mortgage debt has the same effect as a sale on a judgment for the entire mortgage debt, and the lien of the mortgage was divested although the sale was made upon a junior judgment on a bond given for the payment of the instalment only. The question at issue in Bank v. Chester is thus stated by the eminent judge of the Common Pleas, whose opinion was adopted by this court. “ But this brings us only one step nearer to the question before us. The cases of Donley v. Hays, 17 S. & R. 400, and Cronister v. Weise, 8 Watts 215, were sales for instalments of the principal debt. Is the law the same where the sale is for the interest due upon part of the principal debt ? It must be so, for the instalment on which the mortgaged premises were sold in Cronister v. Weise, supra, was not more truly a part of the mortgage debt than was the interest for which the mortgaged premises were sold in this instance. Debt is the creature of contract; and a mortgage is a contract. * * * The certificates of loan issued by the railroad company stipulate for the payment of interest as expressly as for the payment of principal. The rate per centum, and the days of payment, are specifically mentioned. In the mortgage, which is only another security for the same debt, the parties stipulate for the payment of interest pursuant to the terms set forth in the said certificates respectively.’ They contemplated an. increase of the debt with lapse of time, and though the profits of the railroad were pledged for the payment of interest, yet, these failing, they made their securities expansive enough to embrace the. increase. * * * But hero the interest sued for .by Mr. Chester cannot be regarded merely as a legal incident of the mortgage debt, but as part of that debt, differing only from the principal in its inability to carry interest.” Upon referring to the certificate of indebtedness of which the foregoing language was predicated, we find it was a promise to pay “ $1000, with six per cent, interest per annum, payable on the first days of January and July of each year, being part of a loan of $150,000, for the payment of which the real estate and certain effects of said company have been pledged by indenture of mortgage dated on the 24th day of September a. d. 1839.” It will thus be seen that the pledge of the lands for the payment of the interest was a conclusion derived from the language of the certificate, which promised to pay the amount of the certificate with interest. It was this form of expression alone which made the interest a part of the principal. How is it in the case at bar ? The agreement provides, and the balance of three thousand five hundred to be paid within seven years from first day of April 1878, with interest at'the rate of six per cent, annually.” In other words, the debt to be paid is the principal sum with interest added to it. The debt, therefore, which is secured by the articles, is the principal sum increased by the interest upon it. The payment of interest is as much stipulated for as is the payment of principal. It was held in Bank v. Chester, supra, that a sale of the mortgaged premises under a judgment obtained for arrears of interest due upon the certificates of indebtedness whose payment was secured by the mortgage, divested the lien of the mortgage, extinguished the equity of redemption and transferred the legal title of the mortgagor ; and further, that the holders of the certificates were entitled, out of the money realized by the sale, to the principal and interest due them, with the same effect as if the sale had taken place under proceedings on the mortgage. We see no reason why the same doctrine should not be applied to the present case. In the former case the mortgage was a security for the payment of the debt with interest. In the present instance the articles of agreement are treated as a security for the payment of the purchase-money with interest. The interest is a part of the purchase-money, and the remedy for the recovery of the purchase-money necessarily includes the recovery of the interest. The same doctrine as to the incorporation of interest with principal was held in Hummel v. Brown, 12 Harris 313, where we said : “In such cases, where the terms of the obligation comprehend interest, it is inaccurate to say that interest is added by way of damages ; for it is a substantive part of the debt as much as the principal is, and is subject to the same remedies.” It is the familiar law of Pennsylvania that the vendor of land by articles of agreement, who has not parted -with his legal title, may enforce the payment of unpaid purchase-money by means of an action of ejectment. That is one of his remedies. Being a remedy for the recovery of principal it is also a remedy for the recovery of interest, which has been made a part of the principal by the agreement of the parties. The plaintiff in this case was therefore entitled to a verdict and judgment in this action, if, in point of fact, the interest due was unpaid, and the learned judge was in error in taking the case from the jury and • directing a verdict for the defendant.

Judgment reversed, and venire de novo awarded.