Court Opinion

ID: 7002963
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:45:24.282578+00
Date Added: 2024-06-11T16:09:58.698493
License: Public Domain

Mr. Justice Waterman delivered the opinion of the court. A stipulation in a mortgage that the whole principal shall become due and payable or that the mortgagee may at his election declare the entire principal due and payable upon default in the payment of any part of the principal or interest is legal and valid and is not objectionable as being in the nature of a penalty or forfeiture. Jones on Mortgages, section 76-1181; Ottawa Plank Road Company v. Murray, 15 Ill. 336; Hoodless v. Reid et al., 112 Ill. 105-111; Brown v. McKay, 151 Ill. 315-323; Swearingen v. Lahner, 26 L. R. A. 765. Stipulations such as these, in a mortgage, are not regarded with disfavor by the courts and are to be construed and enforced and the intentions of the parties ascertained in accordance with the rules applicable to other contracts. That, sometimes termed a forfeiture, is really but an acceleration of time of payment. Unearned interest is not rendered due by an acceleration of the time of payment of the principal, even if the acceleration were to be regarded as a forfeiture; the default being willful, a court of equity will not, in such a case as this, relieve against it. Swearingen v. Lahner, 26 L. R. A. 765-766; Hoodless v. Reid, 112 Ill. 105; Wiltsie on Mortgage Foreclosure, Sec. 37. A court of equity may grant relief against forfeitures occasioned by fraud, accident or mistake, but where the agreement creates a mere pecuniary obligation it will not do so where the default arose from gross negligence or was willful and persistent. Pomeroy’s Equity Jurisprudence, Sec. 452-856; Spring v. Fisk, 6 C. E. Green, N. J. Eq. 175; Baldwin v. Van Vorst, 2 Stockton, N. J. Eq. 577. A provision in a bond or mortgage that if default in the prompt payment of interest shall be made the entire principal sum shall at once become due and payable is not in the nature of a penalty, but will be sustained in equity as well as at law. Pomeroy’s Equity, Sec. 439. It is urged that the presentation and collection of the second coupon note was a waiver of the declaration that by reason of default in payment of the first coupon the entire amount had become due. As against the mortgagor appellant could not waive the effect of his declaration. Platt v. Ætna Life Ins. Co., 153 Ill. 113-120; Terry v. Hunger, 121 N. Y. 161-167. By declaring, as he had a right to do, the entire amount due, it became due. Curran then became possessed of the right to at once pay the entire debt, a right which there is no evidence he ever waived or released. The testimony as to the payment of the second coupon shows that there was not in the mind of either party any thought of waiver, while there was a manifest attempt by each not to have the payment operate as a change of any condition then existing. Curran declared that he paid under protest and Houston consulted his lawyer before accepting the $45. Curran, seemingly, was considering only the effect of payment upon his claim to set off what White owed to him. The declaration of the entire principal as due did not discharge the debt nor stop the running of interest. Whatever payments were thereafter made, discharged,pro tanto, the debt of Curran; appellant had a right to receive at any time all or a portion of what was due him—indeed, could not refuse to take all or any portion. The mere payment or acceptance of interest after the declaration, could not revive the contract or deprive appellant of his right to have or Curran to pay at once all that was due. Van Vlissengen v. Lenz, 171 Ill. 162-168; Am. Loan & Trust Co. v. Union Depot Co., 80 Fed. Rep. 36. In the present case none of appellees at any time set up by way of answer or otherwise, the defense that by demand of or acceptance of payment of the second interest coupon six months after the bill of foreclosure was filed the declaration of the entire principal as due was waived, or that thereby the suit became prematurely brought. The nearest approach to a suggestion of this is contained in the objections filed by appellees to the master’s report. Objection number 10 contains the following : “ The master erred * * * in failing to find that after the commencement of the suit herein, the said Houston presented for payment one of the interest coupon notes, which fell due after the commencement of the suit herein for payment to the said Curran; that the said Curran on the presentation of said interest coupon as aforesaid to him, by the said Houston, paid the same, and in failing to find that the said Houston at the date of the payment of the coupon last aforesaid then and there declared.that the said coupon had become due on the 24th day of August, A. D. 1899, long after the commencement of the foreclosure proceedings herein, and that hence said master should have found that the indebtedness secured by the trust deed herein was not due at the time of the commencement of the foreclosure proceedings herein.” By what process of reasoning a suit properly brought March 29, 1899, could, by a payment made September 12, 1899, become prematurely brought, we do not understand. Even if prematurely brought as to the entire indebtedness., it was not as to the coupon that matured more than a month before the filing of the bill, which coupon is still unpaid. Morgenstern v. Klees, 30 Ill. 422. The decree of the Superior Court is reversed and the cause remanded, with directions to render a decree in accordance with the prayer of the bill. Reversed and remanded, with directions.