Slingo v. Steele-Wedeles Co.

Me. Justice Horton delivered the opinion of the court. The foregoing statement is sufficiently explicit to present the questions upon which we dispose of this appeal. The various charges of fraud and deception have been intentionally omitted. It is contended on behalf of appellant that appellee can not justify the seizure of appellant’s property under said mortgage, first, because no demand was made upon the note which was payable on demand, and, second, because there is no evidence that the mortgagee had reasonable grounds to feel insecure or unsafe. Both of these contentions are well founded. For some purposes a note payable on demand is due as soon as it is executed and delivered to a bona fide holder. A suit may be maintained upon such a note without any demand for payment other than the commencement of the suit. But where it is sought to foreclose a chattel mortgage given to secure the payment of a note due on demand, the note and mortgage are to be considered and construed together. In such a case, and where it is sought to enforce a forfeiture, a previous demand for payment is necessary. The case of Pulling v. Travelers’ Ins. Co., 55 Ill. App. 452, was commenced to recover upon a life insurance policy. In the policy it was provided that “ if any premium on this policy, or any installment thereof, or any note given for the premium, or any part thereof, shall not be paid on or before the day specified for the payment of the same, then this policy shall cease and determine,” etc. Instead of paying the premium upon said policy, due July 15,1880, the insured gave his promissory note therefor, payable on demand. Whether a demand for the payment of this note was ever made was a contested question of fact. When the next premium became due the insured caused a tender to be made of the amount due upon said note and the premium then due. The company refused to accept the tender on the ground that the policy was forfeited. Mr. Justice Gary, speaking for the court, says (p. 460): “ While a note payable on demand is considered due without a demand in fact, so that an action can be maintained upon it, and the statute of limitations will run against it, yet it can not be maintained that the same rule applies to a note given for the purpose of extending some term of credit; and •the term of credit being at the~option of the holder, if a forfeiture is to follow, an actual demand, or notice in some way that payment is wanted, should be so proved, that from the facts as detailed by the witnesses the court can see that such demand was made or notice given.” In the same case in the Supreme Court (Travelers’ Ins. Co. v. Pulling, 159 Ill. 603, 607), the rule is very concisely stated thus: “ The note executed for the premium, being payable on demand, could not be regarded as matured for the purpose of forfeiture, except by a demand of payment from the maker.” The assured died in 1890, ten years after the demand note was given, no premiums having been paid in the meantime, and the beneficiary named in the policy, the wife of the assured, recovered. The principle upon which the Pulling case is decided is the same as in the case at bar. The word “ forfeiture ” is not now used in law with the same limitations, or restricted or applied to real estate only, as in early times. It means the divesting of property, or the termination of a right. It will hardly be contended that appellant was not divested of property and his right thereto and to the possession thereof by the seizure and sale of same under the mortgage, and in the manner shown by the testimony. In considering this question of demand, counsel for appellee cite Whittemore v. Fisher, 132 Ill. 243, 256. We need only to say in regard to that case, that a formal personal demand was in fact made, and that that not being complied with, the goods were taken upon a replevin writ. Second. Is there evidence to sustain the act of appellee in seizing and selling the property in question under the “ insecure and unsafe ” clause of the mortgage ? There was no change in regard to the property or the security ,of appellee between the time of the giving of the mortgage and the seizure and sale of the property of which appellee could complain. The only change was that the attachment levy upon a part of the property embraced in the mortgage had been released. That release of lew was upon the ground and for the reason that under an appraisal the property was found to be exempt. There was no cause to feel unsafe or insecure which was “not in being at the time the mortgage was executed.” As held in Roy v. Goings, 96 Ill. 361, 368, no legal ground existed upon which to base a claim for feeling unsafe or insecure. It had been determined that the property was exempt, and therefore no one could interfere with the lien or claim of appellee by virtue of the mortgage. In the Roy v. Goings case, the court, in speaking of the construction' to be placed upon the “insecure and unsafe” clause as to the right of the mortgagee to take possession, lay down the rule, that “in judging of that contingency he must act in good faith, and must have reasonable grounds to support his belief. He must have probable cause for his belief. As was said in Furlong v. Cox, 77 Ill. 293, he must, in good faith, based upon reasonable grounds, believe there was danger; and again, thathe must have reasonable grounds to suppose that there was danger.” We are unable to discover in the testimony in this case any reasonable grounds upon which appellee, or those representing it, could, “ in good faith,” believe there was danger. As this case must be reversed and remanded for the reasons indicated, we do not feel called upon to discuss or express any opinion as to the various charges of fraud and misrepresentation. We are, however, of opinion that the case should not have been taken from the jury. The judgment of the Circuit Court will be reversed and the cause remanded.