Court Opinion

ID: 3830925
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:02:06.770383+00
Date Added: 2024-06-11T14:14:02.348507
License: Public Domain

Numerous errors are assigned in the petition in error, but in the briefs only one proposition is presented and argued to this court. That proposition is thus stated in the brief of Home Savings  Loan Association: *Page 100 
"Where, in a real estate mortgage, the mortgagors covenant to keep the lands and improvements thereon free from all statutory lien claims of every kind,' and covenant that in case of default in the performance of such condition the mortgage may be immediately foreclosed and afterwards permit mechanic's liens on the property to be filed and suit brought thereon, bringing in the mortgagee as defendant, and the mortgagee files answer and cross-petition against the mortgagors to foreclose its mortgage for such breach of condition, the mortgagors cannot de eat the mortgagee's right to foreclose by paying off, on the day of trial, the claims of the lienors and procuring dismissals by them; and when the mortgagors have filed no answer or other response to the cross-petition of the mortgagee, judgment and decree of foreclosure should be entered as of course for the mortgagee against the mortgagors."
In support of the foregoing proposition, the loan company has cited and quoted from a number of cases from courts of other states, but an examination of the cases cited discloses that they are readily distinguished from the instant case by reason of the provisions contained in the mortgages considered.
In the instant case the conditions of the mortgage relied on to accelerate the maturity of the deferred payments do not, in the judgment of this court, authorize a foreclosure in the instant case as contended for by the association. After providing that the parties of the first part, the Keatons, shall pay all taxes and assessments, general and special, against the property and the improvements thereon whom due, and to keep said improvements in good repair and to keep the buildings constantly insured in such companies as the party of the second part, the loan association, may designate, such policies of insurance to be constantly trans erred to said party of the second part, this further provision is expressed:
"And also to keep said lands and improvements thereon free from all statutory lien claims of every kind, and if any or either of said agreements be not performed as aforesaid, then said party of the second part, its successors or assigns, may pay such taxes and assessment, and may effect such insurance, for such purpose, paying the costs thereof, and may also pay the final judgment for any statutory lien claims, and may invest such sums as may be necessary to protect the title or possession of said premises, including all costs, and for therepayment of all monies so expended, together with the charges thereon as provided by the by-laws of said association, these presents shall be security."
Following this condition of the mortgage it is then recited that Marie L. Keaton and Harwood Keaton have executed and delivered to the Home Savings  Loan Association their note or obligation, which is then copied verbatim into the mortgage. In the note so copied into and made a part of the mortgage this provision is expressed:
"If we shall fail for a period of six successive months to pay dues, interest, or other charges required by the by-laws, or shall become indebted to the association in a sum equal to the gross amount of the dues and interest for a period of six months, then the whole of this obligation shall become due and payable and may be collected by law."
Immediately following this copy of the note in the mortgage, is the provision that if the parties of the first part shall pay the note and shall faithfully perform all of the other agreements, then the mortgage shall be void, otherwise the mortgage shall remain in full force and may be immediately foreclosed and enforced "for the unpaid amount of the principal of said note, the unpaid interest, and the expenditures hereinbefore named. * * * ." It will be noted that the first condition of the mortgage above quoted does not authorize an acceleration of the maturity of deferred payments because the mortgagors suffer or permit statutory lien claims to accrue and mature against the property, but merely authorizes the association in such event to pay the final judgment for any statutory lien claims, including all costs, and that the mortgage shall be security for the repayment thereof. In the note copied into and made a part of the mortgage, the condition is that if by reason of any payments made by the mortgagee to protect the mortgage security against statutory lien claims, the sum so paid shall equal the gross amount of the dues and interest under the mortgage for a period of six months, then the note and mortgage shall become immediately due and payable, and may be collected by law.
It is thus clearly evident from the language of the parties contained in their written contract, that the mere accrual and maturity of statutory lien claims does not authorize an acceleration of deferred payments and the foreclosure of the mortgage. It is only when the payment of the "final judgment for any statutory lien claims, * * * including all costs," shall become "equal to the gross amount of the dues and interest for a period of six months," that acceleration of deferred payments and foreclosure of the mortgage is authorized. In the instant case no payment of any kind or character *Page 101 
or in any amount was made by the association for the purpose of protecting the security of its mortgage, for the reason that before any judgment was obtained establishing and foreclosing any statutory lien against the property, the Keatons paid off and discharged all of such lien claims. Therefore, no indebtedness was ever incurred by the Keatons to the association "equal to the gross amount of the dues and interest for a period of six months," and hence no default in the terms and conditions of the mortgage had occurred at the time the court rendered its judgment of May 22, 1925. Upon these facts being made to appear, the trial court very properly vacated its judgment and granted to the Keatons a new trial of the action. The situation here presented is not unlike the situation presented to this court in the case of Citizens Bank  Trust Co. v. Dill et al., 30 Okla. 1, 118 P. 374, where it was stated in the second paragraph of the syllabus:
"When a note and mortgage absolute in its terms has been executed, together with a contemporaneous collateral written agreement changing the absolute liability expressed in the note and mortgage to a contingent liability only, held, that, upon a suit on the note and mortgage, before a recovery can be had, the happening of the contingency stipulated in the collateral agreement must be shown by some evidence."
In the instant case there is no collateral agreement, but by the terms and conditions of the note and mortgage between the parties a contingency is provided for, and the happening of that contingency must be shown by some evidence before the provision for acceleration of payments and foreclosure of mortgage can become a condition binding upon the mortgagors. There is no evidence in this record that the contingency has arisen, and it is, therefore, evident that the cross-petition of the Home Savings  Loan Association filed in this action was prematurely filed, and that the judgment of May 22, 1925, based upon such cross-petition was erroneous.
The order and judgment of the trial court vacating its prior judgment and decree of foreclosure, and granting to the defendants Keaton a new trial is in all things affirmed.
By the Court: It is so ordered.