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ICSC Legal Database - CasesMonday, February 22, 1999 05:01 PM

Case Index:
00119

Citation:
Allendale Furniture v. Carolina Commer. Bank, 284 S.C. 76, 325 S.E.2d 530 (1985).

Issue:
Where a note provides for acceleration of maturity upon default "without further notice" and a payment is not

made when due, may mortgagee exercise its election to accelerate all payments without notifying the

mortgagor.

Facts:
Mortgagor Furniture Company executed a $75,000 note and real estate mortgage to Bank, payments being due

on the first day of each month in the amount of approximately $919. For the first few years, payments were

made on time and after that, payments were late in some cases by several days and in other cases, by several

months. Bank accepted the late payments, but notified the Furniture Company on 37 occasions of the need for

compliance. Payment due February 1, 1980, was not received until February 22. It was returned by the Bank

advising that the mortgagor would hear from the Bank's attorney. On March 31, the Bank received and returned

both the February and March payments. The note provided that, in case of default, the principal sum with all

accrued interest shall become "at once" due and payable at the option of the holder "without further notice".

Mortgagee brought suit seeking foreclosure. The Master and Circuit Judge held that the default in payment

entitled the Bank to accelerate the maturity of the note and foreclose without further notice to the mortgagor. In

a split decision, the Court of Appeals, in its majority Opinion, reversed and held that the company's late tender

on February 22, of the payment due February 1, occurred prior to any affirmat ive act by the Bank notifying the

mortgagee of its election to accelerate, and, therefore, that payment cured the default. Mortgagee appealed.

Holding:
Reversed, and judgment of the Circuit Court affirmed. When payment was not made on the February 1, 1980

due date, mortgagee's exercise of its election to accelerate all payments did not have to be communicated to

mortgagor or manifested by some affirmativ e act constituting notice to mortgagor of acceleration; the

morgagee's rejection, on February 22, of the late payment was sufficient for exercise of its right to accelerate

the balance due.

Publication:
Legal Update

Date:
Winter 1985

Classification 1:
Mortgages

Classification 2:

Classification 3:

00119 - Legal Update - Winter 1985