Dominion Savings Bank, FSB v. Costello

In this appeal, we consider whether two notes, which document the terms of repayment for two first mortgage real estate loans, provide for payment of interest in advance or on arrears each month. Because we conclude that the unambiguous terms of the notes pro vide for interest to be charged in advance, we will reverse the judgment of the circuit court finding that interest is to be paid on arrears.

I

Dominion Savings Bank, FSB, (the Bank) 1 made two first mortgage real estate loans to C. John Costello (Costello). The loans are evidenced by two promissory notes, each dated December 12, 1986. One…