Page:Harvard Law Review Volume 32.djvu/804

768 HARVARD LAW REVIEW ment is analogous to the interpretation of the usual clause in a lease, that the term shall cease and be absolutely determined or void upon a default in the payment of rent. It is well settled that the landlord waives the forfeiture by subsequent acceptance of rent, and that the tenant will not be allowed to say that he is discharged from his covenants by his own default, unless the landlord chooses to take advantage of the condition. ^^ The word "void" in an in- surance policy is also construed to render it voidable at the option of the insured. This construction of the acceleration clause reaches a just result. The interest and other terms of the loan are ordinarily arranged with reference to the normal Hfe of the instrument with the expectation that the obligor will carry out his promises. The default clause does not give the obligor the right to break his con- tract. It is merely incidental to the main contract, affording the holder the right to take rapid action, at the first sign of trouble, to protect his entire investment instead of running future risks. He should be free to decide whether such protection is necessary under the circumstances of the default. Moreover, it is also for the benefit of the ordinary obligor to construe the provision as per- missive and not mandatory. Extended credit has been given him because of his inability to pay in a short time from his usual re- sources. The dates for payment are adapted to his abiHty to pay. If every default automatically brings the whole loan down on his head at once, he will often be unable to remain solvent. The holder could not overlook even a slight delay of interest, but would Luce, ii6 Cal. 232, 48 Pac. 72 (1897); Watts v. Creighton, 85 Iowa, 154, 52 N. W. 12 (1892); Lowenstein v. Phelan, 17 Neb. 429, 22 N. W. 561 (1885); Cox v. Kille, 50 N. J. Eq. 176, 24 Atl. 1032 (1892); Core v. Smith, 23 Okla. 909, 921, 102 Pac. 114 (1909); Batey v. Walter, 46 S. W. 1024 (Tenn., 1897); First National Bank v. Parker, 28 Wash. 234, 68 Pac. 756 (1902), The holder's option need not be exercised immediately upon default. Wheeler v, Howard, 28 Fed. 741 (Mo. 1886). Bringing suit is exercise of the option without other notice to the debtor. Swearingen v. Lahner, 93 Iowa, 147, 61 N. W. 431 (1894) ; Coad v. Home Cattle Co., 32 Neb. 761, 769, 49 N. W. 757 (1891). It is held that even if fore- closure proceedings were instituted and then dismissed, maturity was not accelerated, and the Statute of Limitations did not begin to rim. California Savings Soc. v. Culver, 127 Cal. 107, 59 Pac. 292 (1899). The Federal courts need not follow state decisions on the application of the local Statute of Limitations to these instruments. Keene Five Cent Sav. Bank v. Reid, 123 Fed. 221 (C. C. A., 8th, Kan., 1903), certiorari denied, 191 U. S. 567 (1903); contra, Moline Plow Co. v. Webb, 141 U. S. 616, 625 (Texas, 1891), semble. " Belloc V. Davis, 38 Cal. 242, 250 (1869); Rede v. Farr, 6 M. & S. 121 (1817). i