Court Opinion

ID: 3514673
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:25:50.221767+00
Date Added: 2024-06-11T13:45:08.450931
License: Public Domain

As shown by the dissenting opinion of Judge ETHRIDGE, the face of the note held by McIlveen gave him notice *Page 241 
that it was subject to prepayment according to the terms of the deed of trust securing same, and the deed of trust expressly provided that the mortgagor shall have the privilege on any semi-annual interest payment date, to pay the entire indebtedness, and to retire all notes then outstanding "upon payment of all accrued interest to date of payment, and a premium of one and one-half per cent of the amount so paid, having first given to the Mortgage  Securities Company sixty days previous written notice of their intention so to do." It is admitted on all sides that under this contract the only notice necessary to be given of the intention of the mortgagor to retire the entire indebtedness on any semiannual payment date was to the Mortgage 
Securities Company, and that it was not necessary to give notice to any one else, the Mortgage  Securities Company being expressly made the agent to receive the notice. It follows, therefore, that when the mortgagor gave this notice to the Mortgage  Securities Company, as it is admitted he did give notice, then it became an accrued and matured right of the mortgagor, under the mortgage, to make full payment and retire the whole debt and all the notes evidencing same.
It is fundamental in the construction of contracts, and in their enforcement by the courts, that every valid part of the contract in question will be given full force and effect, and that no construction which operates to substantially neutralize any valuable provision will be adopted, if the contract is susceptible of any other construction which will give real effect to all the provisions; and this principle has had its restatement, in other words, which expresses an undeniable maxim of simple justice, that no man shall enforce a contract, taking only those features thereof which are favorable to him; but that in standing on his contract he must yield to the opposite party everything that the contract gives to that opposite party. And it is a corollary of that principle of justice, *Page 242 
that a party who stands upon, and claims the benefits of the provisions of a contract favorable to him, shall not be permitted, by resort to any device, to which he is a party, or with which he is legally connected, to defeat the opposite party of those provisions of the contract which are favorable to that opposite party, or of which he is entitled to avail.
But what has happened here? By the simple device of transferring these notes to another person than the Mortgage 
Securities Company, and from that other person to McIlveen, so that the Mortgage  Securities Company could report, either truthfully or falsely, that it did not know who the owners were, then, says the majority opinion, the mortgagor has lost his right to mature and retire the debt, and that in paying to the Mortgage Securities Company, thereby availing of the only method which he could avail of to promptly effectuate the right he had under the contract, he has lost his money, and will have to pay again. It had been taken out of the power of the mortgagor to know who held these notes, but McIlveen knew who held them, and knew the rights of the mortgagor with respect to them. It was McIlveen's duty, in fidelity to the contract, to acquaint the Mortgage 
Securities Company with the fact that he had these notes, and that he was ready to surrender them for payment at any semi-annual interest date when the mortgagor should give notice of his intention to retire them. The majority opinion characterizes the mortgagor's conduct as negligent in paying to the Mortgage  Securities Company, who did not have the notes, when this was the only place he could pay to avail of the benefits of his contract, and the same opinion takes McIlveen out of any responsible part by emphasizing and making predominant, and as neutralizing the other provisions of the contract that McIlveen held negotiable notes, yet these notes, on the very face of them, gave McIlveen the notice of the very rights of *Page 243 
the mortgagor in the premises of which he was seeking to avail. The provision that the notes should be negotiable was not in conflict, or incapable of being harmonized with the provision for acceleration of payment. That provision did not trench upon negotiability in the sense in which that term is commonly construed, it had the effect only to advance the due dates of the notes and to require the holder to accept payment at the accelerated dates. Thousands of such contracts provide for acceleration both by the holder and by the maker of the notes, and this is the first time it has ever been held, as I believe, that such a provision is in derogation of negotiability. Nevertheless, the majority opinion, as said, raises this matter of negotiability to a commanding and controlling position, and as sweeping other provisions aside, even to the extent of neutralizing the provision to which we here call attention; and this, as I think, is not the law, and even more certainly it is not ordinary justice.
In my opinion there is but one way to make this contract operate in all its parts, to rid it of approval of resort to devices which defeat a valid portion of its terms, and do justice to all parties to it; that is to say, to require fidelity to this contract by all parties to it; and that is to hold that the Mortgage  Securities Company was not only the agent to receive notice of the mortgagor's intention to retire the notes, but to make the said company the agent to receive such accelerated payment as to all such persons as McIlveen, who held notes and kept the fact a secret from the mortgagor and from any person who could inform the mortgagor, and thereby rendered it necessary that payment should be made to the Mortgage Company, or else that the mortgagor should lose the right given by the contract to retire the notes. And since, in my opinion, McIlveen should be required to look to the Mortgage  Securities Company, and since the bank, appellee, has no higher *Page 244 
rights against the mortgagor than did McIlveen, I am of the opinion that the decree should be reversed and the bill dismissed; and I have written this separate dissenting opinion because I do not fully concur in the dissenting opinion of Judge ETHRIDGE, nor further than as herein expressed. Judge COOK joins me in this dissent.