Moore v. Sargent

• Decision Date: 06 December 1887
• Citation: 14 N.E. 466,112 Ind. 484
• Parties: Moore v. Sargent.
• Court: Indiana Supreme Court

112 Ind. 484

14 N.E. 466

Moore

v.Sargent.

Supreme Court of Indiana.

December 6, 1887.

Appeal from superior court, Allen county; Samuel M. Hench, Judge.

William Sargent, Jr., plaintiff, sued Louisa A. Moore, defendant, to foreclose a mortgage. Judgment for plaintiff, and defendant appealed.

R. S. Robertson, for appellant. Colerick & Colerick, for appellee.

Mitchell, C. J.

Louisa A. Moore executed a mortgage on certain real estate to secure two notes, payable to William Sargent, Jr.,-one for $600, payable on June 1, 1884; the other for $800, due in three years from date. The notes and mortgage bore date the twenty-first of April, 1884, and were given to secure deferred payments of purchase money. The mortgage contained a stipulation therein written, to the effect that if the mortgagor failed to pay either of the notes, or any part thereof, at maturity, the entire debt should at once become due and collectible. In a complaint filed May 11, 1885, to foreclose the mortgage, it was alleged that the first note, which fell due June 1, 1884, had been paid, but that payment thereof had not been made until the fourth day of June, 1884, three days after its maturity, and that, in consequence of the failure to pay at maturity, the second note had fallen due pursuant to the stipulation within the mortgage.

It is contended on appellant's behalf that, by accepting payment of the amount due on the first note, after it had matured, without giving notice of his intention to insist upon the stipulation in the mortgage, the appellee waived his right to treat the whole debt as due. Hence, the argument proceeds, since it affirmatively appears by the averments in the complaint that payment of the first note had been accepted before suit brought, the conclusion follows that no part of the debt remaining unpaid was due, and that it was therefore error to overrule the appellant's demurrer to the complaint. This position cannot be maintained. The provision in the mortgage for accelerating the time when the whole debt should become due and collectible did not make the maturity of the debt evidenced by the second note depend upon the election of the mortgage. The second note became absolutely due upon failure to pay the first note at maturity. According to the terms of the contract, upon the happening of that event, the whole debt became as effectually and absolutely due as if further credit had not been in any contingency agreed upon. The mortgagor had, then, the right to pay or tender the whole debt, and by that means suspend the accumulation of interest. The acceptance of a part by the mortgagee did not defeat the right of the mortgagor to pay or tender the balance at once, nor did it, without a new agreement, extend the time, or prevent the former from enforcing payment of what remained unpaid. Provisions such as that under consideration are not in the nature of penalties, nor have they anything in common with forfeitures, but are to be regarded as nothing more than agreements between the parties fixing the time and the conditions upon which the whole debt may become due. Such an agreement may be as advantageous to the payor as to the payee. Buchanan v. Berkshire, etc., Co., 96 Ind. 510;Malcolm v. Allen, 49 N. Y. 448; 1 Pom. Eq. Jur. § 439; 2 Jones, Mortg. § 1186.

Under a provision which gives the creditor the exclusive right to elect, within a time fixed, whether or not he will treat the whole debt as due, in case the debtor makes default in paying interest, it may well be that the unconditional acceptance of interest by the creditor after the expiration of the time, without notice of the election, would waive the default. 2 Jones, Mortg. § 1186. Or if the default was induced by the fraudulent or inequitable conduct of the creditor, or by any agreement or promise upon which the debtor might rely, which operated to mislead or throw the debtor off his guard, a court of equity would interfere to stay proceedings, or the action might be abated upon the facts being properly pleaded. Sire v. Wightman, 25 N. J. Eq. 102;Wilson v. Bird, 28 N. J. Eq. 352;Bell v. Romaine, 30 N. J. Eq. 27;Tompkins v. Tompkins, 21 N. J. Eq. 338;Noyes v. Clark, 7 Paige, 179;Bennett v. Stevenson, 53 N. Y. 508;Wilcox v. Allen, 36 Mich. 160; 1 Pom. Eq. Jur. § 439. As nothing appears in the complaint, except that the appellant failed to pay the first note at maturity, presumptively the whole debt then became due, and the acceptance by the creditor of a part did not, without more, effect his right to enforce the condition in the mortgage.

The next objection to the complaint is that there is a variance...