Kilpatrick v. Germania Life Ins. Co.

Kilpatrick v. Germania Life Ins. Co.

Opinion

 [*166]   [**1124]  A very narrow question is presented on this appeal. We have a mortgage given on the 28th of August, 1899, payable August 1st, 1901. The interest was payable semi-annually on February and August first. The privilege was accorded the plaintiff of paying the principal sum and interest at any time after August 28th, 1900, and prior to August 1st, 1901, upon the payment in addition to the principal sum and interest of the further sum of one thousand dollars. The mortgage contained the usual covenant that upon default in the payment of interest the principal [***7]  sum, with all arrears of interest, should, at the option of the defendant, become due and payable immediately. The plaintiff defaulted in the payment of his interest due August 1st, 1900.

 [*167]  The plaintiff, represented by his nephew, called upon the counsel for the defendant prior to the time he was served with the summons and complaint and sought to make some arrangement as to the payment of the interest, but was informed that counsel had been instructed to foreclose. A day or two later the plaintiff was served with the summons and complaint in the foreclosure action.

 [**1125]  Some time later the plaintiff's nephew again called on counsel for the defendant to notify him that they would be ready to pay the amount of the bond and mortgage with interest within the next day or two, and informed him that they had arranged for a new loan of $ 95,000 on the same premises covered by the defendant's mortgage. The defendant's counsel then informed the plaintiff's nephew and representative that he was very sorry, but his client had withdrawn its foreclosure suit and proposed to sue for the interest only, and that they would not receive payment of the principal sum due under [***8]  the bond and mortgage unless plaintiff paid the additional sum of one thousand dollars. This was some three or four days before the 28th of August, 1900, when the parties met and plaintiff paid the principal, interest and one thousand dollars bonus, protesting at the same time that the latter was an illegal exaction and was money not due the defendant.

The sole question presented is whether the payment of this bonus of one thousand dollars was, under the circumstances, voluntary or exacted when the plaintiff was under duress. It will be observed that at the time when the defendant saw fit to avail itself of the covenant contained in the mortgage providing that default in payment of interest should, at its option, make the principal sum and interest due and payable immediately, the time had not yet arrived when the plaintiff was permitted to exercise his option to pay the principal sum, interest and said bonus at any time after August 28th, 1900, and prior to August 1st, 1901.

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