This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If a debt is payable in installments the statute of limitations begins to run as to each separate installment from its maturity.1
N. Y. 61; 27 N. E. 285. County warrant. Crudup v. Ramsey, 54 Ark. 168; 15 S. W. 458.
7 Cooke v. Pomeroy, 65 Conn. 466; 32 Atl. 935; Codman v. Rogers, 10 Pick. (Mass.) 112; Wenman v. Ins. Co., 13 Wend. (N. Y.) 267; 2S Am. Dee. 464.
8 Hooper v. Hooper, 81 Md. 155; 48 Am. St. Rep. 496; 31 Atl. 508.
9 New England Fire Ins. Co. v. Haynes, 71 Vt. 306; 76 Am. St. Rep. 771; 45 Atl. 221. See to the same effect, Bigelow v. Libby, 117 Mass. 359; Langworthy v. Flouring Mills Co., 77 Minn. 256; 79 N. W. 974; Kilbreath v. Gaylord, 34 O. S. 305; Crafoot v. Thatcher, 19 Utah 212;
75 Am. St. Rep. 725; 57 Pac. 171.
10 Wardle v. Hudson, 96 Mich. 432; 55 N. W. 992; Eichman v. Hersker, 170 Pa. St. 402; 33 Atl. 229.
11 Mifflin County National Bank v. Bank, 199 Pa. St. 459; 49 Atl. 213.
12 Rhind v. Hyndman, 54 Md. 527; 39 Am. Rep. 402.
13 Blades v. Bank (Ky.), 56 S. W. 415.
14 Rhind v. Hyndman, 54 Md. 527; 39 Am. Rep. 402. (Contract for sale of stock.)
15 Lydig v. Braman, 177 Mass. 212; 58 N. E. 696.
1 Staffon v. Lyon, 110 Mich. 260;
So if several notes are secured by one mortgage, limitations runs as to each note from its maturity.2 If the note or other instrument contains a provision that default in payment of an installment should make the entire debt due forthwith, without providing that default should have such effect at the option of the creditor, such default is held to start the statute of limitations to running.3 If the provision is that in case of default in one installment the entire debt shall become due at the option of the creditor, the statute of limitations does not begin to run until he has exercised his option, and thus made the entire debt fall due.4 If the note provides that " in default of payment of interest when due the principal is to become due and collectible," but recites that it is secured by a deed of trust; and the deed provided that in case of default the entire debt should become due "at the option " of the holder of the notes, it is held that limitations does not begin to run unless the holder of the notes elects to treat the entire debt as due.5 A provision that default in payment of one installment shall make future installments due and payable at once,6 or that default in paying taxes on mortgaged property shall make the mortgage debt due at once,7 may be waived by the conduct of the parties if each leads the other to believe that the default will not be insisted on,8 or by the voluntary payment by the debtor of all delinquencies, the creditor acquiescing therein so that limitations does not run from such default. Even if the holder of the note after default in payment of interest presents the entire amount of principal and interest as a claim for the amount due at that time, which is before the maturity of the note, such presentation is not an exercise of the right to treat the entire amount as due, or if it is, his subsequent acquiescence in the continued running of the debt waives such right.10 Such a waiver affects the time at which limitations begins to run, and is not a new promise or acknowledgment; and hence may be oral even if the statute requires a new promise or acknowledgment to be in writing.11 Some authorities treat a provision giving the creditor power to enforce the debt in case of default in one installment as a power which makes limitations run from default even if the creditor does not exercise such power. Thus a loan for five years was made with power to the creditor to call the loan if the interest which was due quarterly not paid within twenty-one days after it came due. Default in payment of interest, was held to start limitations to running twenty-one days after the day on which the quarterly installment of interest in which default was made fell due.12 The creditor's act in bringing suit on the entire debt is an exercise of his option to declare it all due, though such suit is dismissed after his death.13
68 N. W. 151; Nares v. Bell, - Neb. - ; 92 N. W. 571; Bush v. Stowell, 71 Pa. St. 208; 10 Am. Rep. 694; New England Fire Ins. Co. v. Haynes, 71 Vt. 306; 76 Am. St. Rep. 771; 45 Atl. 221; George v. Butler, 26 Wash. 456; 57 L. R. A. 396; 67 Pac. 263.
2 George v. Butler, 26 Wash. 456; 90 Am. St. Rep. 756; 57 L. R. A. 396; 67 Pac. 263.
3 Reed v. Culp, 63 Kan. 595; 66 Pac. 616; Ryan v. Caldwell, 106 Ky. 543; 50 S. W. 966; San Antonio, etc., Association v. Stewart, 94 Tex. 441; 86 Am. St. Rep. 864; 61 S. W. 386; Harrison Machine Works v. Reigor, 64 Tex. 89; Dodge v. Signor, 18 Tex. Civ. App. 45; 44 S. W. 926.
4 Moline Plow Co. v. Webb, 141 U. S. 616; Richards v. Daly, 116 Cal. 336; 48 Pac. 220; Mason v. Luce, 116 Cal. 232; 48 Pac. 72; Ins. Co. v. Martin, 151 Ind. 209; 51 N. E. 361; Watts v. Creighton, 85 la. 154; 52 N. W. 12; Lowen-stein v. Phelan, 17 Neb. 429; 22 N. W. 561; Batey v. Walter (Tenn. Ch. App.), 46 S. W. 1024.
5 Moline Plow Co. v. Webb, 141 U. S. 616.
6 San Antonio, etc., Association v. Stewart, 94 Tex. 441; 86 Am. St. Rep. 864; 61 S. W. 386.
7 Douthitt v. Farrell, 60 Kan. 195; 56 Pac. 9.