The Muncie National Bank et al. v. Brown. closure does not merge the lien of the mortgage, although it merges the mortgage as a cause of action. Teal v. Hinchman, 69 Ind. 379; Evansville, etc., Co. v. State, ex rel., 73 Ind. 219 (38 Am. R. 129); Manns v. Brookville Nat'l Bank, 73 Ind. 243 (246); Pence v. Armstrong, 95 Ind. 191 (207); Curtis v. Gooding, 99 Ind. 45 (51). But here there was no decree of foreclosure, so that there was not even a merger of the mortgage as a cause of action, and surely the lien continued until foreclosed. If the lien continued until foreclosed, then it is not possible that it could have been merged by a simple personal judgment. A personal judgment can not drown the mortgage security; nothing but a decree of foreclosure can do so much, and until this drowning takes place there can be no merger. A personal judgment does not extinguish the mortgage lien, and until extinguished it is enforceable by a decree. Counsel lose sight of the fact that in every case like this there are two distinct things-a debt, and the mortgage securing it. A personal judgment does not extinguish the debt, although it merges it as a cause of action. But while there is a merger of the debt in the personal judgment, the lien of the mortgage remains unaffected. The mortgage will sustain a suit for a decree of foreclosure although there may be a personal judgment. Until there is a foreclosure there is no judgment merging, or even impairing, the mortgage security. The trial court sustained the motion of the appellee to strike out all evidence tending to prove that the mortgage executed to the appellee was fraudulent. The Muncie National Bank is not in a situation to complain of this ruling, for in the mortgage which it accepted that executed to the appellee is recognized as valid. It is recited in the former mortgage that "It is expressly stipulated herein that this mortgage is made second and subsequent to that of one executed to Cornelia A. Brown and John C. Jenners to secure the payment of certain of the in The Muncie National Bank et al. v. Brown. debtedness of the said Francis M. Brown to them and each of them as described in said mortgage." Having treated the mortgage as a valid one, the bank can not be allowed to assail it on the ground that it was made with the intent to defraud creditors. Barr v. Hatch, 3 Ohio, 527; Irwin v. Longworth, 20 Ohio St. 581; Bump Fraud. Conv. 465. The cross-complaint is good as against Francis M. Brown. It is not good as against the appellee so far as it attempts to charge her with fraud, but it is good in so far as it shows that she claimed an interest in the property in controversy. A demurrer to it was, therefore, properly overruled. But, in overruling this demurrer, the trial court did not decide that it would receive evidence tending to prove that the mortgage was executed to defraud creditors. A court in passing upon a demurrer does not decide in advance what evidence will or will not be received. Nor is a court bound to adhere to its decision, for it is well settled that it may reconsider a ruling on demurrer and rectify an error. It can not, therefore, be justly assumed that the court misled the appellants. A party who files a bad pleading, and not the court, is in fault. The appellants were in fault in not making their cross-complaint sufficient for all that they desired it to accomplish, and we can not conceive how the trial court can with justice be censured for not giving them more than their. pleading entitled them to demand. As there was no pleading entitling the appellants to introduce the evidence struck out, we can not condemn the ruling of the trial court. Judgment affirmed. Filed Dec. 3, 1887. 1 112 484 114 193 115 463 112 484 135 160 Moore v. Sargent. No. 12,583. MOORE v. SARGENT. MORTGAGE.-Series of Notes.-Default in Payment.— Stipulation that Whole CHANGE OF VENUE.-Rule of Court.-Where a rule of the trial court re- From the Allen Superior Court. R. S. Robertson, for appellant. MITCHELL, C. J.-Louisa A. Moore executed a mortgage on certain real estate to secure two notes payable to William Sargent, Jr., one for $600, payable on June 1st, 1884, the other for $800, due in three years from date. The notes and mortgage bore date the 21st of April, 1884, and were given to secure deferred payments of purchase-money. The mortgage contained a stipulation, therein written, to the effect, that if the mortgagor failed to pay either of the notes, or any part thereof, at maturity, the entire debt should at once become due and collectible. In a complaint filed May 11th, 1885, to foreclose the mortgage, it was alleged that the first Moore v. Sargent. note, which fell due June 1st, 1884, had been paid, but that payment thereof had not been made until the 4th day of June, 1884, three days after its maturity, and that, in consequence of the failure to pay at maturity, the second note had fallen due pursuant to the stipulation written in the mortgage. It is contended on appellant's behalf that, by accepting payment of the amount due on the first note after it had matured, without giving notice of his intention to insist upon the stipulation in the mortgage, the appellee waived his right to treat the whole debt as due. Hence, the argument proceeds, since it affirmatively appears by the averments in the complaint that payment of the first note had been accepted before suit brought, the conclusion follows that no part of the debt remaining unpaid was due, and that it was, therefore, error to overrule the appellant's demurrer to the complaint. This position can not be maintained. The provision in the mortgage for accelerating the time when the whole debt should become due and collectible did not make the maturity of the debt evidenced by the second note depend upon the election of the mortgagee. The second note became absolutely due upon failure to pay the first note at maturity. According to the terms of the contract, upon the happening of that event, the whole debt became as effectually and absolutely due as if further credit had not been, in any contingency, agreed upon. The mortgagor had then the right to pay or tender the whole debt, and by that means suspend the accumulation of interest. The acceptance of a part by the mortgagee did not defeat the right of the mortgagor to pay or tender the balance at once, nor did it, without a new agreement, extend the time or prevent the former from enforcing payment of what remained unpaid. Provisions such as that under consideration are not in the nature of penalties, nor have they anything in common. with forfeitures, but are to be regarded as nothing more than agreements between the parties, fixing the time and the con Moore v. Sargent. ditions upon which the whole debt may become due. Such an agreement may be as advantageous to the payor as to the payee. Buchanan v. Berkshire L. Ins. Co., 96 Ind. 510; Malcolm v. Allen, 49 N. Y. 448; 1 Pom. Eq. Jur., section 439; 2 Jones Mortg., section 1186. Under a provision which gives the creditor the exclusive right to elect, within a time fixed, whether or not he will treat the whole debt as due in case the debtor makes default in paying interest, it may well be that the unconditional acceptance of interest by the creditor, after the expiration of the time, without notice of the election, would waive the default. 2 Jones Mortg., section 1186. Or if the default was induced by the fraudulent or inequitable conduct of the creditor, or by any agreement or promise upon which the debtor might rely which operated to mislead or throw the debtor off his guard, a court of equity would interfere to stay proceedings, or the action might be abated upon the facts being properly pleaded. Sire v. Wightman, 25 N. J. Eq. 102; Wilson v. Bird, 28 N. J. Eq. 352; Bell v. Romaine, 30 N. J. Eq. 24; Tompkins v. Tompkins, 21 N. J. Eq. 338; Noyes v. Clark, 7 Paige, 179; Bennett v. Stevenson, 53 N. Y. 508; Wilcox v. Allen, 36 Mich. 160; 1 Pom. Eq. Jur., section 439. As nothing appears in the complaint except that the appellant failed to pay the first note at maturity, presumptively the whole debt then became due, and the acceptance by the creditor of a part did not, without more, affect his right to enforce the condition in the mortgage. The next objection to the complaint is that there is a variance between the note as it is described in the mortgage and the copy exhibited with the complaint. The only variance pointed out is that the mortgage describes the note as bearing interest "payable annually," while in the note exhibited those words are omitted. There is no merit in this objection. With the general denial the defendant filed a second paragraph of answer, in which matter tending to show an excuse |