Opinion ID: 1241225
Heading Depth: 1
Heading Rank: 1

Heading: the security agreement

Text: Mr. and Mrs. Mikkelson purchased a parcel of land in Campbell County with the intention of constructing a building thereon to house a welding shop. Foothill loaned them $70,000.00 at an annual interest rate of 16%. The total amount of the obligation, including finance charge, was $116,795.28, payable in 84 installments of $1,390.42, due on or before the first day of each month beginning August 1, 1978. As part of the loan transaction the Mikkelsons executed four instruments: A Promissory Note, Security Agreement, Financing Statement, Disclosures; a Mortgage Deed with Release of Homestead; a Deed of Trust; and a Security Agreement  Certificates of Deposit. The note permits the holder thereof, in lieu of acceleration of maturity, to charge 5% of any installment not paid within 10 days of the due date. But at the opinion of the holder the unpaid balance may become ... immediately due and payable without notice or demand if (a) any payment required by this note is not made when due, or (b) a default or event of default occurs under any loan or security agreement or other instrument executed as security for or in connection with this note... . The mortgage contains covenants to pay the indebtedness, pay all taxes and assessments and keep the buildings thereon insured in an amount not less than $116,795.28. In case of default in the payments, or in case default shall be made in any of the covenants and agreements hereof, then the whole indebtedness hereby secured with the interest thereon shall become due and payable, and the mortgagee may proceed pursuant to law to foreclose on and sell the property. The deed of trust contains covenants promptly to pay all principal, interest and other sums of money due, keep the improvements insured in an amount not less than the amount due, and promptly pay all taxes, assessments and other liabilities, obligations and encumbrances as they become due. Time is of the essence and if there is any default in payment or breach of any of the covenants the whole of the indebtedness may at the option of the legal holder thereof, become due and payable and this Deed of Trust be foreclosed in the manner and with the same effect as if said indebtedness had matured. Indulgence in not exercising the option to accelerate shall not, even though repeated, be construed as a waiver of the right to exercise the option at any time thereafter. By the terms of the fourth instrument, a certificate of deposit in the amount of $10,000.00 was deposited with the bank as additional security for the loan. Foothill is authorized to sell the collateral and apply the proceeds against the debt. The debtor waives any right to require Secured Party to proceed against any person, exhaust any collateral, or pursue any other remedy which Secured Party may now or hereafter have. On September 29, 1978, Foothill released a portion of the mortgaged premises so that the Mikkelsons could convey this portion to John A. Brown and Everett Jack Pownall. The bank financed this purchase and provided funds so that an additional building could be constructed. The Mikkelsons contend that this conveyance was made in violation of protective covenants pertaining to the subdivision in which the premises are located.