Citation Numbers: 162 A. 913, 111 N.J. Eq. 538
Judges: BACKES, V.C.
Filed Date: 11/9/1932
Status: Precedential
Modified Date: 7/5/2016
The complainant has a decree in foreclosure of its mortgages for the principal, interest, c., upon an election to declare the principal debt due for failure to pay installments of interest. The defendants, owners of the equity of redemption, petition to set aside the decree on the ground that it should have been entered for the interest only and they rest on chapter
The purpose of this legislation is to preserve to the mortgagee *Page 540 the lien of his mortgage after foreclosure for the recovery of interest. Before the statute, a mortgagee had the right to foreclose for his interest. Indeed, if a default in interest did not accelerate the due day of the principal, he could sue only for his interest. The statute would appear to be merely declaratory of the common law, emphasizing that the mortgage lien remains after foreclosure for interest.
The defendant argues that the effect of the statute is to prevent the acceleration of the principal debt upon default or breach of condition. That is a misconception. But if the act admitted of that construction then, in respect of existing mortgages (the complainant's mortgages were made in 1924) where the mortgagee has the right to accelerate the due day upon a default in payment of installments of interest, taxes, c., it is clearly in violation of article 4, section 7, chapter 3, of the state constitution denying to the legislature the power to pass any bill impairing the obligation of contracts or depriving a party of any remedy for enforcing a contract which exists when the contract was made. Baldwin v. Flagg,
*Page 541The motion to set aside the decree is denied for want of merit.