This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Since performance can not be tendered before maturity, tender of a debt before the day for payment does not discharge the lien of a mortgage which is given to secure such debt.1 Tender of the amount of a debt secured by mortgage discharges the mortgage if made before condition broken on the day fixed by the contract for payment.2 It has been held, however, that such tender will not avoid the lien of the mortgage unless the tender is kept good by paying the money into court;3 and the discharge of the mortgage is said to date only from the date of payment into court.4 If condition is broken and tender of the debt is made after that time, with interest down to the time of making tender, some courts hold that such tender discharges the mortgage.5 Such a tender has been held to discharge a lien in the nature of a mortgage created by a lease of water power.6 Other courts hold that such tender does not discharge the mortgage.7 A tender by attaching creditors of a mortgagor discharges the lien of a mortgage.8 A tender which is kept good has been held to divest the lien of a chattel mortgage.9
To discharge the lien of a mortgage the tender must be so far free from conditions that it would be sufficient to stop interest and costs. If conditions are imposed by the party who makes the tender in excess of those imposed by law, the tender is ineffective.10 Refusal of a tender has been held not to discharge the lien of a mortgage if such refusal was due to a bona fide dispute as to the amount already paid in.11
1 Moore v. Kime, 43 Neb. 517, 01 N. W. 736.
See Sec. 2854.
2 United States. Jones v. Guaranty ft Indemnity Co., 101 U. S. 622, 25 L. ed. 1030.
Nebraska. Security State Rank v. Waterloo Lodge, 85 Neb. 255, 122 N. W. 902.
New Jersey. Shields v. Lozear, 34 N. J. L. 496, 3 Am. Hep. 250.
New York. Breunieh v. Weselman, 100 N. Y. 009, 2 N. E. 385 (obiter).
3 Parker, v. Beasley, 116 N. Car. 1, 33 L. R. A. 231, 21 S. E. 955
Contra, on the ground that payment into court is necessary as a defense to the debt, but not to the discharge of the lien. Kortright v. Oady, 21 N. Y. 343.
4 American Net & Twine Co v. Githens, 57 N. J. Eq. 539, 41 Atl. 405
5 Renard v. Clink, 91 Mich 1, 30 Am St Rep. 458, 51 N. W. 692; Werner v. Tueh, 127 N. Y. 217, 24 Am. St. Rep. 443, 27 N. E. 845.
6 Gordon v. Constantine Hydraulic Co., 117 Mich. 020, 70 N. W. 142.
7 Perre v Castro, 14 Cal. 519, 76 Am. Dec. 444; Howell v. Mitchell, 08 Me. 21; Holman v. Bailey, 44 Mass. (3 Met) 55; Hudson Bros. Commission Co. v. Glcncoc Sand & Gravel Co., 140 Mo. 103, 62 Am. St. Rep. 722, 41 S. W. 450. (In this case the earlier and to some extent inconsistent Missouri cases are discussed. In McCIung v. Minsouri Trust Co., 137 Mo. 100, 38 S. W. 578, there had been no tender in fact, but the court expressed the opinion that such a tender might stop interest but could not discharge the mortgage ) Shields v. Lozear, 34 N. J L 496, 3 Am Rep. 256.
8 Felker v Hazelton, 68 N. H. 303, 38 Atl 1051.
9 Gould v. Armagost, 46 Neb. 897, 66 N. W. 1064.
10 Moore v. Norman, 52 Minn. 83, 38 Am. St Rep 526, 18 L R A. 350, 53 N. W. 809.
11 Easton v. Littooy, 91 Wash. 648, 158 Pac. 531.