91 W. Va. 169 | W. Va. | 1922
This suit was begun by notice of motion for judgment upon two of forty bonds of $500.00 each, aggregating $20,000.00, with interest coupons attached, and secured by a deed of trust executed by the defendant company to Frederick L. Thomas, Trustee, and according to the face of the bonds covering all of the property of the defendant company, consisting of real estate in fee, and personal property.
The original notice, dated November 13, 1920, was served on the defendant November 19, 1920, and filed in the clerk’s office November 22, 1920, and gave defendant notice that the motion for judgment and award of execution on the bonds would be made on December 11, 1920.
According to the record defendant appeared in court by counsel February 15, 1920, craved oyer of the two bonds and writing obligatory alleged in the notice, and by writing demurred to and moved to quash and dismiss the notice.
At a subsequent day, February 18, 1921, in the absence of
The following day, February 19, 1921, before judgment on the verdict, defendant appeared and moved the court to set aside the verdict and all proceedings subsequent to the filing-of its demurrer and motions, on the ground of surprise, and. in support thereof filed the affidavit of its attorney, which motion was resisted by plaintiff, who filed in support thereof' his own and the affidavits of his law partner and of the deputy clerk of the court, which motion the court took time to consider, and later, on March 15th, sustained defendant’s motion to set aside the verdict, and set aside all proceedings in the case subsequent to February 15, 1921, the date of the filing of defendant’s demurrer, and plaintiff excepted, and on April 9,1921, had made up and certified by the court a bill of exceptions, setting forth in detail all the proceedings and the evidence adduced before the jury on the trial, including the bonds sued on and the deed of trust securing the same, leaving the-case still pending on the original motion for judgment.
At a subsequent term of the court, on November. 18, 1921, the court proceeded to hear the arguments of counsel upon said demurrer and motion to quash plaintiff’s notice, the plaintiff joining therein, and the said two bonds and deed of trust sued on were again read in open court, and the court sustained defendant’s demurrer and motion to quash, but gave-leave to plaintiff to amend his notice of motion, and the plaintiff again excepted.
Thereupon plaintiff tendered his amended notice, and de-
By the amended notice the date, amount, rate of interest, and the date of the maturity of these bonds are set forth, it being alleged that defendant thereby promised to pay the bearer the principal thereof on March 24, 1924, the interest thereon being payable semi-annually, on the fifth days of March and September respectively- of each year during the running thereof until paid.
And it is averred that it was further provided in each of said bonds that: “The payment of this bond is secured by, and subject to all the provisions of a duly recorded deed of trust bearing even date herewith, executed and delivered by said Company to Frederick L. Thomas, of Charleston, West Virginia, Trustee, in trust to secure the payment of the principal and interest of this bond, and performance of the conditions therein contained.” ■
The first notice furthermore alleges that the full amount of principal and interest together with the two installments of interest thereon due March 5th and September 5th, 1920, were then due and unpaid to plaintiff by virtue of paragraph eleven of said deed of trust, particularly section (a) thereof, providing that the principal of said bonds secured thereby should become due and payable; (a) on default in payment of interest on said bonds, or any of the other covenants contained therein, which should continue for the period of thirty days;’(b) in case of insolvency, bankruptcy or general assignment for benefit of creditors; and, (c) if any lien should be obtained or process levied upon or enforced against the property covered by the deed of trust, which in prior paragraphs defendant hád covenanted, against. Paragraph twelve in addi
A provision of paragraph sixteen of said deed of trust is also alleged and relied on, as follows: “No remedy herein conferred upon, or reserved to the trustee or to the holders of bonds hereby secured, is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now existing or hereafter to exist, at law, or in equity, or by statute.” And it is averred in this connection that plaintiff had not waived the default in the payment of interest, nor had the default therein been waived by a majority in interest of the bondholders at a meeting called according to a provision thereof in the mortgage.
And it is also averred that by the several provisions in said bonds and deed of trust right of action had accrued to plaintiff to move for judgment and award of execution upon said bonds and the two interest coupons aforesaid, with interest thereon as aforesaid.
The first ground urged for reversal is the action of the court in setting aside the verdict of the jury and all proceedings subsequent to February 15, 1921. The substance of the affidavit of defendant’s counsel filed in support of its motion, is that he was present in court the day prior, and remained for a while, and finding there was a ease on trial before the jury in which plaintiff was counsel, which was likely to continue for some time, he called the attention of the court to the fact of his presence, and to the entry of his appearance, and his demurrer and motions, and said that he had a definite understanding with him that he was to be called immediately on the conclusion of the case on trial; that he was in his office practically continuously during court hours thereafter, and was not called and was greatly sur
Of course the rules of practice in setting aside verdicts and awarding new trials on grounds of surprise and the like require a showing of due diligence on the part of the complaining party. Bennett v. Jackson, 34 W. Va. 62. In this case defendant had appeared and demurred to and moved to quash and dismiss the notice. It was prompt and diligent at every stage of the case up to this point, and counsel’s affidavit states a special understanding with the judge, not controverted, that he should be called. There was really no necessity for a jury, the action being on sealed instruments, unless perhaps upon the question of plaintiff’s non-waiver of the alleged default in payment of interest, if material. Without this the questions presented by the pleadings and motions were questions of law for the court. Considering the nature •of the case and the evidence on the motions to vacate the verdict, we can not say the court’s action in setting aside the verdict was arbitrary and beyond the rule of discretion applicable to eases of this character.
The sole question left for decision presented by the defendant’s demurrer and motions to quash the original and' ■amended notices is whether maturity of the bonds was by section (a) of paragraph eleven of said deed of trust or by any ■other provision of the bonds or of the deed of trust accelerated Iby the default of the defendant in the payment of the two installments' of interest represented by the coupons thereto .attached, so as to give plaintiff immediate right of action .against the defendant thereon, and for judgment and award ■of execution as alleged.
The contention of counsel for plaintiff is that the bonds and •deed of trust must be taken as one in determining his rights;
It is argued by counsel for defendant that plaintiff can not properly predicate his right to proceed by notice for judgment on section 6, chapter 121 of the Code, giving any person entitled to recover money by action on any contract right to move for judgment; (1) because the bonds on their face were not due; (2) because the deed of trust was executed, not to plaintiff, but to Frederick L. Thomas, Trustee, covering certain property, to secure the payment of the bonds, and containing no contract or promise to pay plaintiff any sum of money, or as having the legal effect to mature the bonds held by him, except for the purposes of foreclosure. It is said that the statute giving this summary remedy, being in derogation to the common law, is subject to the rule of strict construction, and properly construed will not permit the holder of the bonds due in 1924 to sue and obtain judgment in 1920, or before maturity of the bonds. It is conceded that if the bonds were due, the plaintiff might proceed under the statute by notice of motion for judgment. In support of this proposition counsel mainly rely on the opinion of Sedgwick, Judge, in Mallory v. West Shore Hudson River Railroad Co., 35 N. Y. Super. Ct. Rep., (3 Jones & Spencer), 174. In that case the bonds sued on were payable to Murdock and Duncan, who certified on each bond, among other facts, that the said series of bonds was secured by a first mortgage, which contained a
The complaint in that case alleged an agreement of the defendant that in default of payment of interest due or to become due on the bonds, then and in that case the whole principal sum mentioned in all and each of the bonds should forthwith become due and payable; and it was held that such an agreement might exist and be referred to so as to modify the tenor of the bonds, though contained in an instrument separate from the bonds. But it was decided that as the covenant in the mortgage was not made with plaintiff, it was necessary to enable him to maintain an action upon it that it should appear that it was made, not only to give the trustees right of action for his benefit, but was made with them to give him right of action upon it, or in other words was made for his benefit, and this not appearing from the evidence, or upon proper construction of the bonds and mortgage, plaintiff was denied right of recovery of the principal sum. It was held, considering the place in the mortgage where the provision relied on occurred, that properly construed it was made solely with reference to the power of the trustees in the enforcement of the mortgage.
We revert then to the real question, whether under any of the provisions of the bonds sued on, or of the deed of trust, right of action had at the time of this action accrued to plaintiff to sue for the principal of the bonds. It is conceded that he had present right of action on the past due coupons, but that as the amount represented by those coupons
On the main proposition there is much conflict among the decisions. In Missouri, where the question seems to have been first considered, it was held that unless contained in the notes or bonds, the accelerating provision of the mortgage or deed of trust, though made contemporaneously therewith, could not be read into the instruments evidencing the debt, for maturing right of action at law on them. Morgan v. Martien, 32 Mo. 438; Mason v. Barnard, et al., 36 Mo. 384; Hurck v. Ershine, 45 Mo. 484; Whelan v. Reilly et al., 61 Mo. 565. In a later case, however, namely, Noell v. Gaines, 68 Mo. 649, the two notes involved were secured by a deed of trust. Each note had endorsed upon it the following: “This note is secured by a deed of trust stamped according to law.’’ They matured at different dates. The deed of trust provided that if the maker should fail to pay the debt or interest when the same should become due according to the tenor, date and effect of the notes, then both should become due and payable. In default of the payment of the first note the holder of both caused a sale of the property to be made and the proceeds to be applied, and there being a deficiency, when the second note fell due, he demanded payment of the maker and gave notice of dishonor to the defendant as endorser, and payment was refused. In an action on this note it was held that the demand and notice of dishonor came too late; that plaintiff having elected to declare a forfeiture on failure to pay the first note, the second then became due; and that in order to charge the defendant, demand should have been made and notice given at the time plaintiff elected to mature the notes and default of payment. It was said in the opinion that it could not be said with any show of reason that the notes could under the terms of the contract fall due for one
In a later case from the same judicial circuit, Brewer v. Penn Mut. Life Ins. Co., 94 Fed. 347, 36 C. C. A., 289, the rule announced by Judge Brewer was adhered to as being the law of that circuit, and it was held that a similar provision in the moi’tgage there under consideration gave the holder of the notes secured the right on default of interest to declare the notes due for all purposes and to collect them by suit in the ordinary form, as well as by foreclosure. In his opinion in that case Judge Thayer, referring to Manufacturing Co. v. Howard, swpra, says: '‘Since this decision it has been very generally regarded as establishing the law in this circuit, the question being one of general law.” But he says this rule is at variance with that affirmed in White v. Miller, 52 Minn. 367; McClelland v. Bishop, 42 Ohio St. 113; and Owings v. McKinzie, 133 Mo. 323. In the latter ease the case of Noell v. Gaines, swpra, is distinctly overruled, and the cases cited from Minnesota and Ohio are directly opposed to the rule followed in the two federal cases cited. The reasons for the holdings in Ohio and Minnesota are given at length in the
In the case at bar the bonds, as we have seen, do make reference to the mortgage and provide that the payment thereof shall be “subject to all the provisions thereof;” but the bonds have a definite and fixed date of maturity .'provided therein. What was meant by the provision that payment thereof should be subject to all the provisions of the mortgage? There is nothing in the deed of trust to postpone the day of payment, stipulated in the bond. .Nor does any of the provisions of the deed of trust accelerate payment or give right of action to individual bondholders unless it be the provision of section eleven referred to. But in the light
For these reasons we are of opinion to affirm the judgment, without prejudice to plaintiff’s rights and remedies.
Affirmed.