Summers v. Wright

• Decision Date: 21 November 1935
• Docket Number: 6 Div. 795
• Citation: 165 So. 87,231 Ala. 372
• Parties: SUMMERS v. WRIGHT.
• Court: Alabama Supreme Court

165 So. 87

231 Ala. 372

SUMMERS v. WRIGHT.

6 Div. 795

Supreme Court of Alabama

November 21, 1935

Rehearing Denied Jan. 16, 1936

Appeal from Circuit Court, Jefferson County; E.M. Creel, Judge.

Bill in equity by Dora S. Summers against Coke S. Wright, to foreclose mortgage and for deficiency judgment. From a decree sustaining a demurrer to the bill, complainant appeals.

Reversed and remanded.

Perry &amp Powell, of Birmingham, for appellant.

Edw. T Rice, of Birmingham, for appellee.

GARDNER Justice.

Demurrer to so much of the bill that seeks a deficiency judgment was sustained upon the theory the debt was barred by the statute of limitations (Code 1923, § 8944), not on account of the maturity date of the notes, but by virtue of the acceleration clause in the mortgage.

Upon this question there is sharp conflict in the general current of authorities. Numerous cases are cited in the note to Perkins v. Swain, 34 A.L.R. 894, with appropriate comments on the theories supporting the divergent views. See also, 19 R.C.L. p. 499; 8 Corpus Juris, p. 138.

Any consideration here of the authorities of other jurisdictions would serve no useful purpose, as we think that in principle at least, the matter has been determined by this court adversely to demurrant's contention.

We have here adopted the view that such acceleration clause is for the benefit of the mortgagee, and is not intended to grant to the mortgagor a right, by his own default, to change his unconditional promise to pay at a given date as disclosed by his notes. In 2 Jones on Mortgages (8th Ed.) § 1515, holding to this view, is cited Cox v. Kille, 50 N.J.Eq. 176, 24 A. 1032, 1033, which sustains the text, and notes as analogous like provision for re-entry in contracts of landlord and tenant, with the observation: "It is entirely optional with the lessor whether he will avail himself of this right of re-entry or not, although, by the terms of the proviso, the term is to cease or become void for the nonperformance of the covenants, and, if the lessor does not avail himself of it, the term will continue, for the lessee cannot elect that it shall cease or be void." Like reasoning was applied by this court concerning the relation of vendor and vendee in Jones v. Hert, 192 Ala. 111, 68 So. 259, and was in harmony with that of the Supreme Court of the United States in Stewart v. Griffith, 217 U.S. 323, 30 S.Ct. 528, 54 L.Ed. 782, 19 Ann.Cas. 639. And speaking to the same question, this Court in George E. Wood Lumber Co. v. Morris, 225 Ala. 281, 142 So. 508, 509, said: "Construing such a contract, this court held in Jones v. Hert, 192 Ala. 111, 68 So. 259, in line with current authority, that such provision in a contract of sale is in no sense an option to the purchaser to abandon the contract and defeat his unconditional promise to purchase and pay for the property, and such clause only meant to reserve in the vendor the right to avoid the sale at his election upon such default by the purchaser."

But still more directly in point is the case of Gorr Lumber Co. v. McMillan 225 Ala. 303, 143 So. 173, 176, where the question was presented as to whether or not a mechanic's statement had been filed within six months of the accrual of the claim. The indebtedness under the contract was payable in installments, and evidenced by the execution of several notes, payable at a given date. The following excerpt from the opinion will suffice to show the ruling, which is here pertinent: "The contract also provided that the amount of the debt 'becomes due in full, after default in two successive monthly notes.' It is claimed therefore that by the contract the entire debt accrued when default was made in the payment of notes due July 1st and August 1, 1930, and the period of six months then began and expired before February 6, 1931, when the statement is alleged to have been filed. So that the question is: Did the entire debt thus mature in the absence of an election of the holder of the notes and contract so to treat it? The notes were unconditional obligations by the maker to pay at a certain time, not before nor after. The acceleration of the maturity of the notes by reason of such a stipulation is not intended to confer a right upon the maker to change his unconditional contract by reason of his own default."

The cited case of Walter v. Kilpatrick, 191 N.C. 458, 132 S.E. 148, 150, is that, "an action upon a note accrues, at its maturity, according to its tenor, notwithstanding a provision for acceleration, if acceleration is waived or not enforced by the holder."

The case of Watson v. Clayton, 230 Ala. 59, 159 So. 481 482, is by analogy also here in point. Although a different statute was there invoked by the defendant, yet, in principle, that decision is likewise here applicable. It was there observed: "While it seems to be the law in some jurisdictions that provisions in notes accelerating...