Court Opinion

ID: 9681323
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:48:15.370355+00
Date Added: 2024-06-11T18:17:33.290527
License: Public Domain

John I. Purtle, Justice, dissenting. I disagree with the majority opinion in this case for several reasons. The first payment on the promissory note in this case was due on January 1, 1977. The note was in the original amount of $92,000 and was secured by a real estate mortgage on the property in question. It is not disputed that almost all of the payments, in the amount of $1,000 per month, were tendered and accepted routinely up to two weeks past their due date. The appellant had initially made a $36,000 payment when she purchased the property. When the May 1,1979, payment was received by the appellees on May 12th it was refused and returned to the appellant. They also refused the payments for June, July and August. Apparently, all other monthly installments were paid into the registry of the court up to the date of the trial. The promissory note in question provided, “if default be made in the payment of any installment when due, either principal or interest, then all remaining installments shall, at the option of the holder, become due and payable at once.” The trial court allowed payment of attorney’s fees on the balance of the note at 10%. However, there was no finding by the court that the appellant was in default on the note. Therefore, there should have been no attorney fees allowed because none are provided for in the mortgage. The mortgage required the appellant to pay the taxes and insurance on the property and provided that in default of payment on the note or upon failure to keep the insurance and taxes paid appellees could exercise an option to declare the balance due. The power reserved to the appellees in the mortgage was that they would have the right to take possession of the property without process of law and to sell it at public sale with or without notice to the appellant. Since the court did not find that the appellant defaulted on either payment of the taxes or in the payment of principal and interest on the note, they will not be considered further in this dissent. I will only state that the property was redeemed before the end of 1979 which was less than three months after the due date. Although the suit was filed on December 12, 1979, the appellees did not amend their complaint to allege a forfeiture on the insurance clause until June 26, 1980. Obviously, this was an afterthought and put in merely for the purpose of insuring their ability to reclaim this property upon which they had collected an initial payment of $36,000 and a considerable amount through monthly payments. The appellant had tendered to the appellees the payment of the insurance premium on March 10, 1980, which was more than three months prior to the filing of the suit. Appellant alleged she was ready, willing and able to pay this insurance premium at all times after tender of the payment on March 10, 1980. The decree of the chancellor was not filed until February 19, 1981. The record indicates that all payments had been made into the registry of the court up until this date. Also, the taxes had long since been paid and additional insurance had been enforced on the policy for about a year. I agree with the majority that Ark. Stat. Ann. § 85-1-208 (Add. 1961) does not apply in this case because there was no acceleration “at will” clause in the note or mortgage. In other words, the security had never been in danger and there was no reasonable expectation on the part of the appellees that their security was in danger. In my opinion, the foreclosure was unconscionable, inequitable and undertaken solely for the purpose of attempting to cause the appellant to forfeit the considerable amount of money which she had paid on this property. The law abhors a forfeiture. We have held that courts of equity will protect a debtor against an inequitable acceleration of the maturity of the debt. Crone v. Johnson, 240 Ark. 1029, 403 S.W.2d 738 (1966); Pulaski Federal Savings & Loan Ass’n. v. Woolsey, 242 Ark. 612, 414 S.W.2d 633 (1967). Therefore, I would reverse the decision of the trial court.