Case Name: GEORGE D. BIZZELL et al. v. J. B. ROBERTS, JULIA KATE ROBERTS, and ZILPHIA A. WARREN
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1911-10-18
Citations: 156 N.C. 272
Docket Number: 
Parties: GEORGE D. BIZZELL et al. v. J. B. ROBERTS, JULIA KATE ROBERTS, and ZILPHIA A. WARREN.
Judges: 
Reporter: North Carolina Reports
Volume: 156
Pages: 272–275

Head Matter:
GEORGE D. BIZZELL et al. v. J. B. ROBERTS, JULIA KATE ROBERTS, and ZILPHIA A. WARREN.
(Filed 18 October, 1911.)
1. Mortgages — Notes—Interest—Maturity on Default — Reasonable Provisions.
Where a deed is payable in installments and is secured by a mortgage containing provision that the entire debt shall mature on failure to pay the interest or specified portions of the principal as it comes due, or any other reasonable stipulation looking to the care and preservation of the property or the maintenance of the lien thereon, such provision or stipulation, in the absence of circumstances tending to show fraud or oppression or “unconscionable” advantage, is enforcible as a valid contract obligation.
2. Same — Waiver—Option of Mortgagee.
Provision in a mortgage thát the mortgage notes shall mature and become payable on failure of the maker to pay the interest as it may become due at the stated periods is primarily for the benefit of the mortgagee, and, as a rule, will be waived by him by the acceptance of all arrears, the occasion of the default, and invariably so when the maturing of the debt is expressed to be at the option or election of the mortgagee and he accepts the arrears with the expressed or implied intent to waive the forfeiture.
3. Mortgages — Notes—Debtor and Creditor — Additional Security— Maturity — Original Debt — Pleadings—Demurrer.
When a mortgage creditor has taken a note or other collateral as additional security for his debt, which has matured, he may proceed to collect it according to its tenor, whether the principal debt is due or not, if there is no binding stipulation to the contrary ; and in his suit upon the collateral note under these circumstances a demurrer to the complaint will not be sustained.
Appeal front Peebles, J., at August Term, 1911, of WayNe.
Civil action beard on demurrer to complaint. There was judgment overruling the demurrer, and defendants excepted and appealed.
W. T. Dortch and M. T. Dicldnson for plaintiff.
Langston & Allen for defendant.

Opinion:
Hoke, J.
It appeared in the complaint that on 3 March, 1909, defendants J. B. Koberts and Julia Kate Roberts became indebted to plaintiff in the aggregate sum of $2,750, payable by installments and evidenced by the promissory notes of said defendants under seal.
1. For $600, payable sixty days after date.
2. For $500, payable one year after date.
3. For $500, payable two years after date.
4. For $500, payable, three years after date.
5. For $650, payable four years after date.
There was mortgage on real estate securing said indebtedness and containing the stipulation that if default be made on the payment of either of said notes and interest thereon when due, then all of said notes should become "due and payable at once."
That defendant Roberts had made payments on said notes as follows:
"On the first of said notes was paid $141 on 18 March, 1909, and said note was paid in full on 9 November, 1909; and the second of said notes was paid in full on 9 November, 1909; and on the third of said notes $252.62 was paid on 9 November, 1909; and on 17 February, 1911, there was paid on the balance due on said notes the sum of $1,050, which credit is subject to a deduction of $47.23, the amount paid by the plaintiffs for taxes on said land for the years 1909 and 1910; and that no further payment has been made upon said notes, and the remainder of said indebtedness, to wit, $565.21, with interest thereon from 17 February, 1911, is now due and owing to the plaintiffs by the defendants."
The complaint further stated that on 3 June, 1909, defendants. J. B. and Julia Kate Roberts and their codefendant, Zil-phia A. Warren, in further security of said first-mentioned notes, executed their promissory note under seal for $450, with intei'est, etc., payable 1 January, 1910, and that no part of this note had been paid; and on these allegations plaintiff demanded judgment on the $565.21 balance due on the principal indebtedness and for $450, with interest, being the amount due on the collateral. Tbe present action was instituted on 16 May, 1911, and defendant demurred to tbe complaint, assigning for cause that no part of plaintiff's claim bad matured at tbe time of action commenced.
Authority bere and elsewhere is to tbe effect that where a debt is payable in installments, and same is. secured by a mortgage containing provision that tbe entire debt shall mature on failure to pay tbe interest or specified portions of tbe principal as it comes due, or any other x-easonable stipulation looking to tbe care and preservation of tbe property or tbe maintenance of tbe lien thereon, such stipulation, in tbe absence of circumstances tending to show fraud or oppression or "unconscionable" advantage, is enforcible as a valid contract obligation. Gore v. Davis, 124 N. C., 234; Parker v. Oliver, 106 Alabama, 549; Odell v. Hoyt, 73 N. Y., 343; Insurance Co. v. Westerhoff, 58 Neb., 379. And it is also generally held, uniformly so far as examined, that a provision of this character is primarily for tbe benefit of tbe mortgagee (Jones on Mortgages, sec. 1183a) ; and from this it would seem to follow that tbe same may be waived by him, and, as a rule, will be by tbe acceptance of all arrears, tbe occasion of tbe default. This is undoubtedly tbe correct position when the maturing of tbe debt is expressed to be at tbe option or election of the mortgagee and be accepts tbe arrears with tbe expressed or implied intent to waive tbe forfeiture. Vanlessingen v. Lentz, 171 Ill., 162; Development Co. v. Post, 55 N. J. Eq., 559; Sire v. Wightman, 25 N. J. Eq., 102; Smalley v. Renken, 85 Ia., 612; Manufacturing Co. v. Robinson, 56 Fed., 690; Jones on Mortgages, sec. 1186; 27 Cye., p. 1532.
It has been said, however, that this waiver will not result from tbe acceptance of arrears, when on tbe face of the mortgage or other instrument the stipulation as to tbe maturing of tbe debt is absolute and not made to depend on the election of the mortgagee. Moore v. Sargent, 112 Ind., 484.
Without final decision on this question, as tbe mortgage is not set out in "ipsissimis verbis " there seems to be no conflict of authority on tbe position that where a creditor who takes a note or other collateral as additional security for bis debt and tbe same bas matured, be may, in. tbe absence of binding stipulation to tbe contrary, proceed to collect it according to its tenor, and whether tbe principal debt is due or not. Bank v. Doyle, 9 R. I., 76; Hunt v. Nevers, 32 Mass., 500.
Tbe case of Hilliard v. Newberry, 153 N. C., 104, is in recognition of tbe same general principle. From this it follows that whether tbe maturing of tbe principal indebtedness bas been waived or otherwise, tbe plaintiff bas an apparent right to prosecute tbe action on tbe collateral obligation of $450 which is past due, and tbe demurrer of defendant therefore was properly overruled.
Affirmed.