Caldwell v. Kimbrough , 91 Miss. 877 ( 1907 )

Mates, J.,

delivered the opinion of the court.

The facts in this case are that on the 14th day of November, 1904, W. H. Morgan purchased from the heirs of Matilda W. Caldwell, deceased, certain lands in Leflore county, Miss. The amount agreed to be paid for this purchase was $45,000. This amount was not paid in cash, but Morgan executed a deed in trust to secure this sum, in which he was joined by his wife, Margaret O. Morgan. The deed in trust covered the property purchased, and the other property in the same county belonging to the Morgans. When this deed in trust was executed for the place bought from the Caldwell heirs by W. H. Morgan, there were executed five principal notes for the sum of $9,000 each, the first principal note falling due on November 14, 1909, and the other notes falling due annually, the last one being payable on November 14, 1913. These notes were executed as principal notes. Interest notes were executed separately. In addition to the five principal notes set out, there were executed forty interest notes for $540 each, made payable in such way as that five of the interest notes fell due annually; the first five falling due on November 14, 1905, and the last five falling due on November 14, 1913. Each of these interest notes were interest-bearing after their maturity. All the notes were executed on the 14th day of November, 1904. In September, 1905, and after the maturity of the first five notes of $540 each, W. H. Morgan died intestate, leaving as his heirs at law all the appellees except Kimbrough, who was appointed administrator of the estate. In this attitude of affairs, and before the maturity of the interest notes, Jas. E. Caldwell, acting for himself and the other appellants, and being a beneficiary in the deed in trust, wrote to the administrator on October 10, 1905, calling his attention to the fact that the first installment of interest was due on November 14th following, and asking the administrator where the notes should be presented for payment. Not having received any reply to this letter, on the 6th day of November following Caldwell wired Kimbrough, asking whether or not he would be prepared to pay the interest notes on the 14th day of November, and asking where the notes should be sent for collection. Kimbrough replied to this telegram on the 7th of November as follows: “ I received your telegram, but have delayed replying until this afternoon in order to answer advisedly. So far, only one hundred and thirteen bales of cotton have come to hand. About ninety bales of cotton are now on the boat, but this will not be enough to meet the debt secured by the crop, so I will have to ask you to hold the notes until a later date when they can be paid. The crops are shorter than I have ever known and the harvest is progressing slowly. I feel safe in saying that I can get in enough in the near future to pay the notes.” On the 9th 'of November, in reply to this letter, Caldwell wrote: “ I have to say that there is no disposition on my part, at least, not to grant a reasonable delay on the notes due the 14th instant. However, I would like to know from you definitely what length of time you would expect and desire.” Kimbrough made no reply to this letter, whereupon, on the 27th. day of November, Caldwell telegraphed: “ Please let me have an answer to my letter of November 9th.” On the 7th of December, 1905, still having no answer from Kimbrough, Caldwell wrote: “ I have not yet received any reply to my telegram to you, asking what length of time you would likely desire in which to pay the interest notes on the purchase of the Caldwell place. Please let me hear from you in regard thereto by return mail or telegram, and greatly oblige.” On the 12th of December, 1905, Caldwell wrote as follows to Kimbrough: “Tour letter of the 9th inst. is received, from which I infer that you are not in a position to make any definite promises in regard to taking up the interest notes on the Caldwell place. Indeed, you state that you will not be able to do so. We, therefore, proceed to exercise our rights under the deed of trust which will simplify matters.”

Krom the foregoing facts, as shown by the correspondence between Caldwell and Kimbrough, it will be seen that before the maturity of the notes it was manifest that Caldwell was going to insist upon their payment. It is also manifest that up to the 12th day of December, when he declares it his purpose to proceed to exercise his rights under the deed in trust and foreclose same, that neither by act, nor word, had there been anything said to Kimbrough by Caldwell which could in any way mislead Kimbrough to his prejudice, as administrator, or lull him into any fancy or belief that the payment of these notes was to be postponed. The failure of Caldwell to insist upon the payment of the. notes on the date at which they fell due was at the instance and request, and for the benefit, of the administrator. As soon as Caldwell discovered the fact that the administrator was pursuing a policy of delay in the payment of these notes, he declared it his purpose to proceed to exercise his rights as set out under the deed in trust. While the declaration of this purpose was not made on the very date that these notes fell due, to-wit, on November 14, 1905, it was made a little less than 30 days from that date, and the delay of Caldwell in declaring his purpose to exercise his rights under the deed in trust was caused by the request of Kimbrough, the administrator, and manifestly under the belief that these notes would be met. Immediately it became known to Caldwell that the notes were not to be paid promptly, he declared it his purpose to proceed to exercise his rights under the deed in trust. After the above correspondence, there were a number of letters passed between Kimbrough, the administrator, and Caldwell, commencing December 14, 1905, and ending about June 6, 1906, the purport of which was an insistence by the administrator on the allowance of time in which to pay the notes. During this correspondence, the declaration of Caldwell of his intention to proceed under his deed in trust was made on the 12th day of December, 1905, but no action was taken by him to sell the property. The matter was merely held in abeyance, at the earnest request of the administrator, the administrator insisting that if the sale was made of the property it would result in great loss to the estate. Such was the condition of affairs, and such was the reason for the delay on the part of Caldwell up to the time at which the estate was advertised by the trustee for sale. The whole record shows that Caldwell was always insisting upon the payment of his entire debt, and that the administrator was earnestly asking indulgence from him, in order that he might have time in which to raise the money with which to discharge this debt. The record fully establishes the fact that all the delay about the sale after the declaration of an intention to foreclose made by Caldwell was a mere indulgence on his part, in an effort to oblige Kimbrough, the administrator, and Caldwell was insisting all the while on the payment of his entire indebtedness. In order that there might be no misapprehension on the part of the administrator as to this, and because of a letter received from Kimbrough, the administrator, on June 4, 1906, Caldwell wrote to Kimbrough on the 6th of June as follows: “ I acknowledge receipt of your letter of June 4th from Greenwood, Miss., from which I infer that there is a possibility of a misunderstanding between us with regard to the payment of our claims against this estate. Now, in order that there can be no possible misunderstanding, I have to say that we consider our entire claim has matured and is now past due against said estate, amounting to $45,000, with interest from its original date. That we have our rights secured to us by an instrument of writing, duly recorded, which gives us power to sell and dispose of the security thereunder, to-wit — the plantation known as the Caldwell Place and the plantation known as the Macon Lake Place. We have, therefore, signified our willingness, in deference to the expressed wishes of yourself and the adult heirs of the estate and consented to a postponement of thé sale of this property until the 1st of October, 1906, on the expressed condition that you, as representative of said estate, would put yourself in position to actually dispose of said properties on that date at public sale, provided they shall not have in the meantime been disposed of at private sale.” Now, it will be seen that on December 12, 1905, the debt not being then paid, and again on June 6th, reaffirming the declaration of December 12, '1905, Caldwell, as representative of the appellants, at both times declared it to be his purpose, exercising the option in the deed in trust, to declare the whole debt due and to foreclose for the purpose of paying this debt. All the debt secured by the notes was due and unpaid on the 12th of .December, 1905, and it was due and unpaid on the 6th of June, 1906. At no time, from the first declaration on the 12th of December, 1905, up to June 6, 1906, was there any waiver of the purpose of Caldwell to declare this entire debt due, and to ash a foreclosure for the entire sum, and the deed in trust expressly provides that the trustee may make sale at any time after default, and for any amount that may be due and unpaid. All indulgences were granted at the request of the administrator, for his benefit, and at no time did Caldwell do anything in prejudice of the rights of the appellee, or anything which by any possibility could mislead him in any way.

We do not deem it necessary to set out the facts of correspondence any further than we have done. There was failure to pay this debt. The correspondence continued on down through July, August, September, and October. After all this correspondence, and before the actual sale of the property was advertised to take place, the administrator tendered to Caldwell the amount of interest, expenses, and costs due up to the date of the tender. This tender was declined. The tender was declined on the ground that the amount due was the full indebtedness, and that the beneficiaries would insist upon full payment, and would accept nothing less than the amount called for under the deed in trust. After the tender was declined, the property was advertised for sale, and before the date of sale arrived the trastee was enjoined from making the sale. There was a motion to dissolve, the motion overruled, and appeal taken to this court.

The correspondence in the case, coupled with the exhibits and the bill in answer, make out a complete case. The whole case turns upon the construction that is to be given to certain provisions of the deed in trust. The provision of the deed in trust which we will notice first is that provision which provides for thé maturity of the entire debt on the failure of the mortgagors to pay any part of the indebtedness secured by the deed in trust at the maturity thereof. That provision is this: “ Should said party of the first part fail to pay any of said indebtedness at maturity, or fail to pay any taxes before delinquency, or insurance premiums when due, or to keep and perform any other act, obligation or covenant hereof, or in case there should be any claim, lien, or incumbrance affecting the property prior to this trust deed, then the whole of the principal unpaid, whether due on the face of the notes or not, together with all accrued interest of said principal and all other sums secured, shall at once become due and collectible, for all purposes, whether for suit on the debt or foreclosure of the lien, at the option of the legal holder of any unpaid debt hereby secured, acting in person or by agent, and no notice of the exercise of such option shall be necessary, and in such case such trustee, or his successor or successors, may, when requested by said party of the third part, or the legal holder of the unpaid debt or debts, or the agent or agents of said holder, take possession of the real estate, and personalty hereby conveyed, and of the rents thereof for the current and subsequent years, and in no event shall he be required to account for more than the net rents received by him, then or later, either with or without entry, sell the same at public auction for cash.” The unmistakable purpose of this provision in the deed in trust was to accellerate the time of payment of an already existing debt on the failure of the mortgagors to pay promptly. This provision in the deed in trust is in no sense a penalty. It imposed no additional obligation upon the mortgagor. He is not called upon to pay any more than he would have paid by the terms of the original contract. This provision is a valid provision and sustainable in any court, both in law and in equity. In 1 Pomeroy, § 439, it is stated: “ If a certain sum is due and is secured by any form of instrument, and is made payable in specified installments, with interest, at fixed successive days in the future, and a further stipulation provides that in case of a default in the prompt payment of any such installment in whole or in part at the time prescribed therefor, then the whole principal sum of the debts should at once become payable, and payment thereof could be enforced by the creditor, such stipulation has nothing in common with the penalty, and is as valid and operative in equity as at the law.” This text is sustained by numerous authorities. In truth, as to the validity of this provision in a deed in trust, there is very little, if any, dissent in the authorities. The question then is, this being a perfectly valid situation, has there been any failure on -the part of the mortgagors to pay-any of such indebtedness at maturity? If there has been, and the mortgagees have in no way waived this provision in the deed in trust, then they have the right, at their option, to declare the whole of the debt due, both as to principal and interest, under the terms of the deed in trust. In the light of this record, it can never be doubted that when this money became due, as provided in the deed in trust, it was not paid, and therefore on the 14th day of November, 1905, the mortgagees unquestionably had the right to mature this entire indebtedness. Did they do so ? It was not necessary, under any of the provisions of the deed in trust, for the mortgagees to make their declaration of intention to exercise their option eo instanti the failure to pay occurred. By the terms of the deed in trust, it is provided that on default in the payment of any such indebtedness the whole amount of principal unpaid, and interest on said principal, and all other sums secured, whether due or not, shall become due and collectible for all purposes at the option of the legal holder, and no notice of the exercise of such option shall be necessary. The mere fact that these notes were due. and unpaid was, in and of itself, notice to the administrator that the mortgagees had the right to exercise their option at any time, and it was not necessary to give him any further notice than that contained in the instrument- itself. It was not necessary for this option to be exercised at once in order to make it valid. It was only necessary that the- mortgagees exercise this option with such reasonable expedition as that the mortgagors might not be lulled into the belief that the rights under this deed in trust were to be waived. It is true that the mortgagees might have estopped themselves by laches, or other conduct amounting to an estoppel, from asserting their option under this contract. In truth, the court would seize upon every slight circumstance on the part of the mortgagee, where it operated prejudicially to the debtor, as a waiver of the right to declare the entire debt due, but in this case the mortgagee has done nothing that could have that effect, but quite the contrary. All the delay that was caused was brought about through the instrumentality of the administrator. If anybody’s rights are prejudiced by this delay, it has been the rights of the mortgagee and not the mortgagor. The failure to act at once was for the sole and exclusive benefit, and .at the earnest instance and request, of the debtor. Mere indulgence of time, such as existed in this case, under the facts in this case, did not of itself operate as a waiver.

After the failure to pay at maturity had occurred, and the option to declare maturity of the entire debt had been exercised, the great weight of authority is that it was too late then to tender the amount due under the deed in trust up to the time of the default, and thereby defeat the right to mature the entire debt. By the terms of this deed in trust it is expressly provided that the right to declare the entire amount of the deed in trust due, and direct the trustee to sell, shall exist so long as there is any breach of a condition of a default, or other failure exists. The right to declare the entire debt due, at the option of the mortgagee, by the terms of the deed in trust, exists so long as there is any breach of a condition as to payment. If the mortgagee had the right to declare this entire debt due because of the default of the mortgagors in meeting the payments when they became due, and they have exercised that right, the mortgagors could not defeat the mortgagees in the exercise of their option to declare the entire debt due by a tender merely of the amount then due, and thereby defeat the sale. It is too late after the forfeiture has occurred and the option has been exercised. As we have shown, the contract which provides for the acceleration of the payment on the failure of the debtor to meet the notes at maturity is a perfectly valid contract both in law and in equity. It is not a penalty, and therefore, when the equity court is appealed to, merely for the purpose of preventing an enforcement of this contract right, unaccompanied by any acts of estoppel on the part of the mortgagee, the court will decline to interfere. After default had occurred and the option has béen declared, it is too late to defeat its effectuation by a tender merely of the amount due at the time of the default. Jones on Mortgages, § 1185; Ib. section 1186; Morling v. Bronson, 37 Neb., 608; 56 N. W., 205; Swearingen v. Lahner et al., 93 Iowa, 147; 61 N. W., 431, 26 L. R. A., 765, 57 Am. St. Rep., 261; Ency. Pl. & Pr., vol. 9, p. 237; Van Vlissingen v. Lenz, 171 Ill., 162; 49 N .E., 422; Hoodless v. Reid et al., 112 Ill., 105.

The deed in trust further provides that: “ In the event maturity of the unpaid portion of the debt is declared, but no sale is actually made, such declaration of maturity shall be held for naught, and the notes hereby secured shall be deemed to mature .as provided on their face.” It is contended by appellees that by virtue of this provision, when there has been a declaration of maturity, not followed immediately by a sale of the property, the right to insist upon full- payment of the entire indebtedness is lost, and that the mortgagors have the right at any time, before the actual sale, to tender the amount due up to the date of the tender and stop any subsequent sale. On the other hand, appellants claim that this clause of the deed in trust is a mere limitation clause. Appellants claim that this clause was inserted for the protection of the beneficiaries in the event they declared the entire debt matured, but did not proceed to sell so that the statute of limitations would not commence from the date of the declaration of maturity, but from the date the notes matured under the terms of the contract. We do not feel called upon in this case to say which of these contentions is correct, since appellees are not in an attitude to avail themselves of the failure of mortgagees to sell. Why did not appellants proceed at once to exercise their option to declare the maturity of the entire debt, and proceed to foreclose the mortgage ? The answer is in the record. The first notes matured on November 14, 1905. After the death of Morgan in September, 1905, and the appointment of Kimbrough as administrator of the estate, on October 10, 1905, Caldwell, for himself and as representative of all beneficiaries, wrote to Kimbrough, as representative of the Morgan estate, calling his attention to the notes and the date of their maturity, and asking where they should be presented for payment. Not receiving any reply, on November 6th following he wired Kimbrough to let him know if he, Kimbrough, would be prepared to pay the notes on the 14th instant. Kimbrough replied on November 7th, stating that he felt safe in saying that he could get enough in the near future to pay the notes. Kimbrough also stated that he would have to ask that the notes be held until a later date. On the 9th of November Caldwell replied that he had no objection to granting a reasonable delay, but would like to know definitely what time he wanted. On the 27th of November, not having heard from Kimbrough, Caldwell wired requesting that Kimbrough answer. On the 7th of December, still receiving no answer, Caldwell wrote again, requesting Kimbrough to reply to him. Afterwards, on the 12th of December, the reply of Kimbrough not being satisfactory, Caldwell declared the maturity of the debt, and has steadfastly held to that declaration of maturity down to the date the sale was enjoined. The record shows that the failure to proceed to sell, after the declaration of maturity, was at the instance and earnest insistence of Kimbrough, and that all failure to act occurred in an effort to oblige the administrator, and that finally, because Caldwell had been postponed from time to time without settlement of the debt, he ordered the trustee to proceed to sell. Under these conditions, can the administrator defeat the sale by setting up the fact that the mortgagees did not act at once and sell ? An executor or administrator, in his capacity as such, and dealing with the matters about which he may lawfully exercise authority, is as much bound by the law of estoppel as if he were acting in his individual capacity. There may be cases when his acts as administrator create an estoppel on him as such, and the estoppel acts prejudicially to the interests he represents, where he may be made liable on his bond to the extent of the injury sustained by the estate; but he is bound by his acts of estoppel just as if he were acting in his individual capacity. Butler v. Gazzman, 81 Ala., 491, 1 South., 16; McDonough v. Hanifan, 7 Ill., App., 50; Thomas v. Brooks, 6 Tex., 369; 18 Cyc., 211, citing many authorities. This announcement of the law is not in conflict with Glenn v. Thistle, 23 Miss., 42. In the case, supra, it was merely held that no estoppel could so operate as to permit the executor of an estate to make valid an obligation entered into by his testator, when the obligation was a nullity at the date of the death of the testator. In the case of Lewis v. Lusk, 35 Miss., 696, 72 Am. Dec., 153, it was held that an estate could not be estopped from asserting its title to property by the mere silence of the administrator. These cases are quite distinct from the case at bar. By the application of the doctrine of estoppel in this case, the administrator is not divesting the estate of any title which it heretofore held, nor is it renewing or reviving any debt which the estate was not already liable for. It is applied to prevent the estate defeating contract rights of parties acquired before there was any administrator, and, if to be lost, must be lost solely because the administrator is acting in a representative character, and cannot therefore estop the estate. The business about which the administrator was engaged was a business connected directly with his duties as administrator, and he was acting in or about those duties. By every principle of right, the doctrine of estoppel applies to an administrator under these circumstances, just as it would apply to an individual in his own affairs.

Under the facts in this case the test is, would Morgan himself have been estopped to set up the failure of the mortgagees to proceed to sale ? If so, then the administrator is estopped.

The motion to dissolve the injunction is sustained, and the injunction here dissolved, and the cause reversed and remanded.