Opinion
6 Div. 303.
March 1, 1945.
Rehearing Denied May 10, 1945.
Appeal from Circuit Court, Walker County; Roy Mayhall, Judge.
Pennington Tweedy, Curtis Maddox, and Carl A. Elliott, all of Jasper, for appellant.
The theory of the plea is that the note or notes sued on were secured by a mortgage upon real estate, and in 1933 the mortgagee elected under acceleration clause to declare all indebtedness due and to take a deed to lands contained in mortgage at fixed price, leaving balance due upon the notes. The last note was due in 1937 and suit was filed in 1940. The deed was taken in lieu of foreclosure and shows the notes were to be credited with this amount and the deed should have same effect as if mortgage had been foreclosed. The notes represented the indebtedness and were made payable on fixed dates. The mortgage was merely security, and the acceleration clause in the mortgage did not authorize the mortgagor to change the due date of said notes. Summers v. Wright, 231 Ala. 372, 165 So. 87; Abbott v. So. Cotton Oil Co., 237 Ala. 569, 188 So. 68; Jones v. Hert, 192 Ala. 111, 68 So. 259; Stewart v. Griffith, 217 U.S. 323, 30 S.Ct. 528, 54 L.Ed. 782, 19 Ann.Cas. 639; Wood Lbr. Co. v. Morris, 225 Ala. 281, 142 So. 508; Gorr Lbr. Co. v. McMillan, 225 Ala. 303, 143 So. 173; 8 C. J. 417; 2 Jones on Mortgages (8th Ed) § 1515. The acceleration clause is for the benefit of the mortgagee only. Recital in the deed gave it same effect as if mortgage had been foreclosed and grantee had been the purchaser at sale. On default in payment on any note, mortgagee could have sold property for note due and have held proceeds to apply against any other note to become due, even if there had been no acceleration clause. Johnson v. Buckhaults, 77 Ala. 276; Foster v. Williamson, 234 Ala. 144, 174 So. 232. The notes sued on were unconditional promises to pay on due dates fixed therein, December, 1937 and 1936. Suit was brought in 1940. The limitation applicable was six years, and the plea of limitation was not a proper bar to the suit. Code 1940, Tit. 21, § 60; Code 1923, § 8944.
Arthur Fite, of Jasper, for appellees.
If plea of general issue is filed with special pleas and plaintiff takes non-suit because demurrer to special plea is overruled, without taking issue on plea of general issue or offering evidence to support complaint, he thereby confesses the general issue plea and judgment will be affirmed whether ruling on special plea is correct or not. Silverfield v. Globe Indemnity Co., Ala.App., 19 So.2d 76; Vines v. Buck, 207 Ala. 523, 93 So. 398; Watkins v. Birmingham R. L. P. Co. 150 Ala. 322, 43 So. 732; Cross v. Esslinger, 133 Ala. 409, 32 So. 10; Andrews v. Hall, 132 Ala. 320, 31 So. 356. Legal title to notes in suit and mortgage securing them was in guardian and it was his power and duty to sue. Spann v. First Nat. Bank, 240 Ala. 539, 200 So. 554; Kelly v. Wilson, 234 Ala. 455, 175 So. 551. Notes and mortgage executed contemporaneously are construed together. Abbott v. So. Cotton Oil Co. 237 Ala. 569, 188 So. 68; Gorr Lbr. Co. v. McMillan, 225 Ala. 303, 143 So. 173. Acceleration clause is for benefit of payee and at his option, but when he elects to accelerate it cannot be repudiated. Watson v. Clayton 239 Ala. 59, 159 So. 481. Guardian may exercise option to accelerate maturity and beneficiary is bound. Spann v. First Nat. Bank, supra. Filing bill to foreclose mortgage is an election to treat whole debt as due under acceleration clause. Abbott v. So. Cotton Oil Co., supra; Gorr Lbr. Co. v. McMillan, supra. If trustee or guardian (owner of paper) is barred by statute of limitation, the non compos mentis beneficiary is barred. Molton v. Henderson, 62 Ala. 426; Lee v. Wood, 85 Ala. 169, 4 So. 693; Spann v. First Nat. Bank, supra.
Suit to recover the balance alleged to be due on six promissory notes.
Defendants filed eight pleas to the complaint and to each count thereof, separately and severally. Plea 1 was the general issue. Plea 3 alleged payment before suit filed. Pleas 2, 4, 5, 6, 7 and 8 set up special defensive matter. Plaintiff interposed demurrers to pleas 2, 4, 5, 6, 7 and 8. Demurrers were overruled as to plea 5, and sustained as to pleas 2, 4, 6, 7 and 8. On account of the adverse ruling as to plea 5, plaintiff took a non-suit, and suffered judgment to be rendered against him, and appealed to this court, assigning as error the ruling of the trial court in overruling demurrers to plea 5.
We will treat first appellee's contention that if a plea of the general issue is filed with special pleas and plaintiff takes a nonsuit under the provisions of section 819, Title 7, Code of 1940, and suffers judgment against him because his demurrer to a special plea is overruled, and offers no proof to support the complaint, the judgment of dismissal will be referred to the general issue, and affirmed; that the error, if any, in overruling plaintiff's demurrer to the special plea is error without injury. This contention is supported by the case of Silverfield v. Globe Indemnity Co., recently decided by the Court of Appeals, and reported in 19 So.2d at page 76. It does not appear that the Silverfield case reached this court, and we must now disapprove it. In the main, the cases cited to support the Silverfield case were cases in which the plaintiff, by refusing to plead over, suffered judgment without adducing proof of his complaint, and without resorting to the statutory method of review by nonsuit. In the instant case the plaintiff may have been able to make out the case alleged in the complaint, but wholly unable to meet the matter of avoidance alleged in plea 5. It was therefore necessary within the meaning of the statute for plaintiff to have a ruling touching the legal sufficiency of the alleged matter of avoidance. Bush v. Russell, 180 Ala. 590, 61 So. 373; Kennedy v. Lyric Theater Co., 213 Ala. 153, 104 So. 274.
In substance, plea 5 is a plea of the statute of limitations of six years.
The suit, commenced on May 14, 1940, is to recover the balance alleged to be due on six promissory notes executed on December 18, 1931, and due and payable as follows: one note on December 18, 1932, and one note on December 18th of the next succeeding five years. Payment of the several notes was secured by a mortgage conveying certain described real estate, and providing: "Upon condition, however, that if the said T. B. Kilgore * * * pay said notes and reimburse said H. W. Cranford * * * then this conveyance to be null and void; but should default be made in the payment of any sum expended by the said H. W. Cranford, guardian or should said notes or any part thereof, or the interest thereon, remain unpaid at maturity, or should the interest of said H. W. Cranford, guardian or his assigns in said property become endangered by reason of the enforcement of any prior lien or incumbrance thereon, so as to endanger the debt hereby secured, then in any one of said events the whole of said indebtedness shall at once become due and payable, and this mortgage be subject to foreclosure as now provided by law in case of past due mortgages * * *."
Plaintiff bases his claim for the balance alleged to be due on said notes on the following facts: the note due on December 18, 1932, was not paid at maturity, and was still unpaid on May 18, 1933, and on which later date, and in lieu of foreclosure, the mortgagors executed and delivered to the mortgagee a deed to the real estate described in the mortgage; that when said deed was executed and delivered the indebtedness evidenced by said notes was in excess of $3,000, and that said deed in lieu of foreclosure was to have the force and of foreclosure was to have the force and effect of a payment of $2,500.
Defendant's plea 5 alleges in substance that the six notes and the mortgage securing their payment, were executed at one and the same time and constituted one transaction; that said notes were not under seal; that the note due on December 18, 1932, was not paid at maturity, and was still unpaid on May 18, 1933, and on which later date the payee elected to mature the entire indebtedness evidenced by said notes and secured by said mortgage; and that more than six years elapsed from the maturity of the indebtedness and the commencement of the action.
All actions founded on promises in writing, not under seal, must be commenced within six years after the cause of action has accrued and not afterwards, unless specifically provided for by the Code. Sections 18 and 21, Title 7, Code of 1940.
It is elementary that parties competent may fix the terms and conditions of their contracts, and when separate instruments are executed at the same time, in the course of and as parts of the same transaction, and intended to accomplish the same general object, they will be read and construed as if one in form.
We are not here concerned with whether the acceleration clause in the mortgage is absolute in form or gives an option or election to the mortgagee. See Summers v. Wright, 231 Ala. 372, 165 So. 87.
Plea 5 substantially alleges that plaintiff elected to mature the entire indebtedness as of May 18, 1933. Indeed, plaintiff admits as much. The complaint set out the acceleration clause in the mortgage and the deed in lieu of foreclosure.
In Chambers v. Marks, 93 Ala. 412, 9 So. 74, it was held that an acceleration provision in a mortgage securing notes enters into and becomes a part of the notes, so that the maturity of the notes is advanced in like manner with the maturity of the mortgage, not only for the purpose of foreclosure but for all purposes. See, also, Derzis v. Cox, 223 Ala. 517, 137 So. 306.
The mortgagee's action matured all the notes for all purposes on May 18, 1933, and the statute of limitations commenced to run on that day. It follows therefore that the trial court did not err in overruling plaintiff's demurrer to plea 5, and the cause is due to be, and is, affirmed.
Affirmed.
GARDNER, C. J., and BROWN and SIMPSON, JJ., concur.