Ogilvie v. Union Central Life Insurance

188 S.W. 309, 171 Ky. 134, 1916 Ky. LEXIS 310

• Court: Court of Appeals of Kentucky
• Decided: September 22, 1916
• Status: Published

Opinion

Opinion op the C'ou-rt by

Judge Ttjrner.

Affirming.

In February, 1914, tbe appellant borrowed from tbe appellee $8,000.00 for wbicb be executed bis note payable in ten years, and at tbe same time executed a mortgage on real estate to secure tbe payment of same and tbe interest installments. He also executed certain notes for tbe interest installments wbicb were due annually, except the first wbicb was due October 1st, 1914, and tbe last wbicb was due at tbe maturity of tbe principal note.

Tbe first interest installment due October, 1st, 1914, was not paid, and, in March, 1915, tbis action was instituted by appellee, wherein it claimed tbe right under tbe terms of tbe note and mortgage to treat the whole debt as due and enforce its mortgage.

In tbe $8,000.00 note executed there is tbe following provision:

“If any installment of interest be not paid at maturity, tbis principal note and all interest accrued thereon shall become due and payable at once, at tbe option of tbe bolder of tbis note, notice of such option hereby being waived,” and there is a similar provision in tbe mortgage.

There is no allegation in tbe petition that any notice was given to appellant of tbe appellee’s election to treat tbe whole debt as due; and tbe demurrer to tbe petition and tbe answer filed by appellant raise tbe single question whether tbe action could be maintained on tbe whole debt without tbe giving of such notice, or without making demand before suit.

It is insisted for appellant that tbe clause in tbe note and mortgage only constituted an option in tbe bolder of tbe note to declare tbe whole debt due upon tbe failure to pay any installment of interest at maturity, and it is conceded that tbe bolder did not have to give notice of such intention to exercise its option; but it is claimed that tbe payor was entitled to notice and demand before suit on tbe principal debt, tbe argument being that there was .no waiver of demand for payment, but only a waiver of notice of intention to exercise tbe option.

We confess our inability to see any practical distinction ; if appellee is required in tbe face of tbis provision waiving tbe notice of bis intention to exercise bis option, to make a demand before be may maintain bis action on .the principal note, tbe waiver provision is of no benefit to it. To demand of appellant tbe payment of tbe principal debt because of bis failure to pay tbe interest installment would be equivalent to giving him notice that the appellee elected under its option to treat the principal debt as due, and to hold such demand necessary would be in effect to deprive appellee of the benefit of the provision in the note that no notice of his intention to exercise the option should be necessary.

. The judgment of the lower court was in accord with these views and it is affirmed.