846 LIGHT V. FEDERAL LAND BANK OF ST. LOUIS. [177 • LIGHT V. FEDERAL LAND BANK OF ST. Louis. Opinion delivered July 2, 1928. 1. MORTGAGES—EFFECT OF ACCELERATION CLAusE.—Where an indebtedness was represented by a single note payable in installments • and containing an accelerating clause, it was unnecessary to declare the entire indebtedness due in order to foreclose for the amount due for an unpaid installment. 2. MORTGAGES — EXTINGUISHMENT OF LIEN.—Where a mortgage is • foreclosed under an unpaid installment without declaring the • 'entire indebtedness due .. under the accelerating clause and the mortgagee purchases at foreclosure sale, the lien is extinguished in its entirety, since the title to the property is then in the mort-. gagee; otherwise the lien is not extinguished. • Appeal from -Poinsett Chancery Court; J. M. Futrell, Chancellor; affirmed. W. H: Bengel, for appellant. J. R. Crocker, for appellee. • HUMPHREYS, J. On August 11, 1927, appellant purchased the northeast quarter of the northwest quarter of section 26, township 12 north, range 3 east, in Poinsett County, Arkansas, from F. R. Pipkin, subject to a mortgage Pipkin executed to appellee thereon, November 1, 1921, to secure the sum of $400, evidenced by a note bearing interest at the rate of 6 per cent. per annum, due and payable in equal semi-annual installments as follows: Fourteen dollars due and payable on the 1st day of May and November ofeach year from May 1, 1922, to May 1, 1954, inclusive, and one installment of $11.69, the last to mature, being due and payable on November 1,
ARK.] LIGHT V. FEDERAL LAND BANK OF ST. Louis. 817 1954, at which time all of the installments would have fully matured. It was declared in tile mortgage that, upon the failure of the mortgagors to pay the indebtedness or any interest or installment or partial paymeht thereof when same should become due, or any taxes, liens, judgments or assessments against said land, the whole indebtedness might be declared due at the option of the mortgagee. On May 1, 1927, prior to the sale of the property to appellant, Pipkin breached the contract by failing to pay the installment of $14 due May 1, 1927, and by failing to pay the Drainage District No. 8 taxea for the years 1924, 1925 and 1926, and the State and county taxes for the years 1924,1925 and 1926, whereupon appellee brought this suit to foreclose for the installment due and the unpaid taxes, 'subject to the remaining indebtedness of $360.38. A copy of the note was attached to the complaint and marked Exhibit The mortgage was attached to the complaint and marked Exhibit B. A separate demurrer of 0. L. Light was filed to the complaint. The gist thereof is' contained in the second and third paragraphs as follows: "2. That the indebtedness referred to in the petition as Exhibit A (the note) is but one obligation pay.- able in semi-annual installments, and that appellee does not have the right to foreclose upon any of said installments without declaring the entire indebtedness due. "3. That appellee cannot, as it is seeking to do, Soreclose the lien created and existing under Exhibit B .(the,mortgage); as to the payment on said note (Exhibit A) which is due, and yet have the lien declared to continue and exist as to the remainder of 'said note; that said note is but a 'single obligation, and is 'not severable for the purpose of forecloSure; that the extinguiahment of the lien lay foreclosure of the paynient due, if permissible, would be an extinguishment of the entire lien." F. R. Pipkin and his surety, the Harrisburg National Farm Loan" Associ g ion, were made 'parties defendant in the action. Pipkin made default, and.the Harrisburg National Farm Loan Association consented
848 LIGHT V. FEDERAL LAND BANK OF ST. LOUIS. ' [177 to a decree in accordance with the prayer of the cOmplaint. The canSe waasubmitted to the Court upon the complaint, the note and mortgage, which were introduced in evidence, and the demurrer to the complaint, resulting in a judgMent against F. R. Pipkin and his surety for the, due installment of $14 ivith interest thereon at 8 per cent;p6r annum from May 1, 1927; and ,a decree of foreclosure against the land, together with: the amount due 'for taxes, and an order of sale to satisfy smile, sub-- ject to'a Continuing lien-on said land in favoi . of appellee to secure payment of the remaining mortgage :indebtedness, from -Which is this appeal. Appellant contends for a revdrsal of the decree 'beeause' the trial court ruled that it:Was not neeegsary 'to declare_ the entire indebtedness due in the accelerating Clans -ein Order to . foreelose for the amount due; and that the' g extinguishment of the lien . -by' fOreclosurdof the installinent dne would not extinguish the lien for the undue ' installments, or the balance of the 'indebtedness: • - Afipellant's cOntention for a reversal of ' the *decree is rdfuted . hy the rule - announced in the cases of Land v. Mdy, 73 Ark: 415, 84 S. W. 489, and Fox v. Pinson, 172 Ark. 449, 289 S: W. 329. In the Land case this court said that the' Mortgagde "was entitled to have foreclosure for such'as were' due, in dealing With a nuMber rOf Mites* whieh 'were exeeuted by the mortgagor, some Of 'w -T hich were ' due and some not." In the Fox case this court said:- 'The Mortgagee can foreclose upon in ga]l-ments only' Which haVe matured; subject to the 'Continuation of the lien ' upon the property to sectre the,unma-tured instal1men6." ' In each of these cases the installments • were evidenced by separate notes, and . there was no accelerating Clause either in the notes or Mortgages. We 'do nOt think that the instant case can be -distin-gaished from the cases eited . mi that account. In_ sound lcigic there is no differened in a single : note payable in installments 'and an indebtedness 'represented by several
849 installment notes. The accelerating clause , in the Mortgage in the instant case was-inserted for the benefit of the mortgagee, and, under its provisions, was entirely optional on its part. ' There is nothing in the clause or mortgage requiring the mortgagee to declare the entire indebtedness due upon the failure to , pay an installment when saine should become due. We think that, notwithstanding the fact that the indebtedneS s in the ,instant case is represented .by a single note, , payable in . insta1l7 ments, instead of a series of notes, and that an accelera7 tion clause is contained in the mortgage, the principle of law announced in the Land' and Fox cases,. suprit, is applicable, and controls the instant case. Of course, if the.appellee should purchase:the land at the foreclosure sale, I then the...lien would be,extinguished, : in its entirety, since the title.of the property would then be in appellee, otherwiSe not. , , No error appearing, the decree is affirmed. KIRBY, dissents.
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