Campbell v. Doherty , 53 N.M. 280 ( 1949 )

On Motion for Rehearing The defendants (appellants) move for a rehearing and assert that we failed to consider their Point 14, which is as follows:

"Appellants should not be required to pay any interest to appellees."

Our failure to consider this point was a clear oversight.

The contract provided as follows:

"In consideration of the covenants and agreements of the grantor herein the grantee agrees and promises to pay to the grantor herein the sum of Two Thousand ($2,000.00) Dollars as follows:

"Two thousand Dollars to be paid in cash to the parties of the first part with the understanding that a loan on said property, in the amount of $3581.31, may be assumed effective this date, by purchasers. Loan is carried by Tucumcari Federal Building and Loan Association. Grantor agrees to pay interest to date * * *."

The contract further provided that defendants would keep the improvements on the lot insured for $5000 against loss by fire and wind "for the benefit of the parties hereto, as their interest may appear."

The record discloses that a mortgage was made by plaintiffs in favor of Tucumcari Federal Building and Loan Association securing a note for $3750 dated December 20, 1946, with interest at 7 percent for the first thirty-six months, beginning January 1, 1947 (other rates were prescribed for subsequent years), payable at $43.54 per month on the amortization plan. The balance due on the note at the date of the contract was $3581.31 which defendants were authorized to assume and pay, as a part of the consideration.

It is evident that it was the intention of the parties that this debt should be assumed and paid by defendants as a part of the consideration. This appears from the fact that the balance of $2000 was placed in escrow to be delivered upon completion of the transaction, and no other provision was made for the payment of the balance of the consideration; also no judgment was asked or given for the balance of the consideration of $3581.31.

Now it may be that plaintiffs have made payments on this note since the date of the contract to protect themselves against the acceleration provision in the mortgage. If they have made such payments they may be recovered from the defendants in an action for such purpose, and the decree herein shall not affect such right of action, and the district court should so provide. But the trial court erred in allowing interest on the amount of the mortgage debt which the defendants assumed to pay. The defendants should be required to pay interest on the $2000 only. The original opinion will not be disturbed as to questions therein decided.

The former order of remand is revoked. The cause is remanded to the district court with instructions to reform its decree in accordance with this opinion, but otherwise the decree of the district court is affirmed. The costs of appeal shall be apportioned equally between the parties.

It is so ordered.

LUJAN, SADLER, McGHEE, and COMPTON, JJ., concur.