Caldwell v. Kimbrough

• Decision Date: 25 November 1907
• Docket Number: 12497
• Citation: 45 So. 7,91 Miss. 877
• Court: Mississippi Supreme Court
• Parties: CHARLES S. CALDWELL ET AL. v. A. MCC. KIMBROUGH ET AL

45 So. 7

91 Miss. 877

CHARLES S. CALDWELL ET AL. v. A. MCC. KIMBROUGH ET AL

No. 12497

Supreme Court of Mississippi

November 25, 1907

From the chancery court of Leflore county, HON. PERCY BELL Chancellor.

Kimbrough and others, appellees, were complainants in the court below Caldwell and others, appellants, were defendants there. From a decree overruling a motion to dissolve an injunction defendants appealed to the supreme court.

The facts are stated in the opinion of the court.

Motion sustained and cause reversed and remanded.

Harris & Powell and Edward Mayes, for appellants.

It will be seen from the correspondence set forth and from the answer and other exhibits thereto that at no time from the writing of the letter of December 12, 1905, by Caldwell, informing the administrator that the beneficiaries in the deed of trust would proceed to assert their rights under the deed according to its terms, in other words declaring the whole debt due, to the time of the filing of the bill, was this declaration of maturity ever waived or dismissed or recalled or anything done, or said, from which it could be inferred that the maturity of the debt was not at all times insisted upon. The fact that the whole debt was declared due and considered due was kept prominently in view in all the correspondence and negotiations which took place between the parties and their attorneys. This is not only shown by the letters referred to but is clearly alleged and set forth in the answer. The only thing which was considered was a postponement of the time for the sale, the postponement being at the repeated and earnest solicitations of the administrator and of the heirs and their attorneys, to give an opportunity to raise the money, if possible, to pay off the whole debt, or to have the sale take place at a time when it would likely be more beneficial to the estate. That the sale for the whole debt was to take place was kept prominently in view, there was merely a question of postponement, the maturity of the debt was continuously asserted and continuously recognized. All of the parties concerned understood this, and it was with reference to this that the negotiation both written and verbal, in which the parties and their representatives all participated were had. The administrator as shown in his letter of December 13, 1905, above set forth, insisted upon a postponement upon the ground that if a sale were to take place in December it would inevitably bankrupt the estate and impoverish the heirs. Caldwell called the attention of the administrator to the fact that the trouble could have been avoided if he, the administrator had applied to the payment of the first interest notes the money which he had applied to the payment of his own debt. Yielding to the solicitations of the administrator and the attorneys for the heirs at law, the beneficiaries agreed to postpone the sale until October 1, always recognizing the maturity of the whole debt, and insisting upon the payment of it all. There was a further postponement of the sale from October 1 to October 10, then at the earnest solicitation of Yerger, representing all of the appellees here, the sale was further postponed until the first Monday in November, with the distinct understanding that if the debt was not paid off by that time the sale should proceed without further objection. There was never a postponement of the declaration of maturity; there was never a recalling of the declaration, but from December 12, 1905, until the filing of the bill, the whole debt was treated as being due and repeatedly so declared, and as shown by the answer after every opportunity had been given and nothing definite could be determined upon, the appellants acting strictly within their legal rights, strictly within conformity with their agreement with the parties, advertised the property for sale. There was no misleading, no fraudulent conduct -- the right to sell for the whole debt was continuously asserted, the fact that the sale would take place was positively and continually asserted, and there was merely a postponement of the time of making the sale, this wholly for the benefit of the appellees. As stated in the foregoing part of this brief, on the day that the sale was to take place after the advertisement, the appellants were enjoined.

The bill only partially stated the case. An answer was filed by the beneficiaries, putting before the court the whole case, denying the equities of the bill and setting forth the whole case. The answer being drawn under the well settled rule of equity practice that an injunction will be dissolved on bill and answer, where the answer sworn to is responsive to the allegations of the bill, and denies the equities of the bill. The rule is that if the complainant states an act, transaction or contract as the foundation of his equity, the defendant has the right to state the whole of such act, transaction or contract as in truth it was. Otherwise the plaintiff, by giving only part of the transaction, if the defendant must admit that part and cannot go on to describe truly all the parts of it, the grossest injustice might be done. The defendant must answer every material allegation in the bill, whether specially interrogated thereto or not, and unless he states the act or contract fully as it truly was, how can he conscientiously swear that the facts in his answer are true? Half a fact or half a contract is not the truth. 1 Beach on Equity Practice, sec. 370; Davis v. Hart, 66 Miss. 642; O'Connor v. Stark, 59 Miss. 481; Hutchison v. Lightcap, 52 Miss. 508; Magee v. White, 31 Miss. 41.

There were no exceptions to the answer and no proof taken.

Complainants proceed upon two assumptions:--

1. That as the defendants had not followed their declaration of maturity in December, 1905, at once by a sale, the declaration must be held for naught and treated as though no such declaration of maturity had been made, and therefore they had a right at any time to pay or tender the amount of the past due interest and thereby prevent a sale of the property on that account.

2. That even if they should be wrong in their contention as to the meaning of the clause of the trust deed set up in the bill, they had a right to pay or tender the interest before a sale actually took place and prevent a sale of the property.

In order to consider this question intelligently it is first necessary to determine the effect of the provision in the trust deed in this case, which is a familiar provision and common to many trust deeds and contracts. We refer to the provision that in the event of the failure to pay any part of the debt secured by the mortgage, when the same matures the whole debt may be declared due, at the option of the beneficiaries. It was insisted in the court below that this clause provides a penalty or is in the nature of a penalty or forfeiture against which a court of equity would relieve, and many authorities were cited by counsel to the effect that a court of equity would relieve against penalties and forfeitures. The power of a court of equity to relieve against penalties and forfeitures is not denied by us or in any way controverted. It is one of the oldest and best established grounds for equitable relief but is confined to well defined and narrow limits, and we insist that the question is not involved in this case. Counsel in the court below, among other authorities, relied upon 1 Pom. Eq., secs. 433, 436, 451, 455. We are in no way questioning the soundness of this rule, it is too well established to admit of controversy. But Pomeroy in the same volume and in the same chapter referred to by counsel, states that the case which we have here is an exception to the rule. As an illustration of what is not a penalty he says at section 439: "It is, therefore, well settled by the overwhelming weight of authority that if a certain sum is due and secured by a bond, or bond and mortgage, or other form of obligation, and is made payable at some future day specified, with interest thereon made payable during the interval at fixed times, annually, semi-annually or monthly and a further stipulation provides that in case default should occur in the prompt payment of such portion of interest at the time agreed upon, then the entire principal sum of the debt should at once become payable, and payment thereof could be enforced by the creditor, such a stipulation is not in the nature of a penalty, but will be sustained in equity as well as at law." "Such a stipulation has nothing in common with a penalty and is as valid and operative in equity as at the law." Citing numerous authorities.

"The court has no power to relieve the mortgagee from a forfeiture of condition that the whole principal shall become due at the election of the mortgagee upon a failure to pay the interest, or to order a stay of proceedings until further default, unless fraud or improper conduct on the part of the plaintiff is proved. The mortgagor negligently permitted the time to pass, and the whole debt thereby to become due, cannot relieve the forfeiture by paying into the court the interest or installments on which the forfeiture occurred." Jones on Mortgages, 1185.

"When the mortgagee has made his election to regard the principal sum due under a stipulation that he shall elect that upon the nonpayment of interest thirty days after it becomes due, he cannot be compelled to waive this provision and accept the interest." Jones on Mortgages, section 1186.

"A stipulation in the mortgage that in case of default of the payment of the interest the principal shall become due immediately and the mortgagee shall proceed to foreclose, is not a penalty nor a forfeiture and equity will not relieve the part therefrom." 8 Am. and Eng. Dec. in ...