Green v. Carlstrom

California Court of Appeal Jan 22, 1963 No. Civ. 6914Published

Before: Monroe

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Holding. The court held that summary judgment was improper because there were triable issues of fact regarding whether the holder of a note could exercise an acceleration clause without prior notice of assignment or demand for payment, particularly where the note specified no place of payment and the parties had a history of payment by mail.

Issues

Whether the trial court erred in granting summary judgment when triable issues of fact existed regarding the exercise of an acceleration clause.
Whether a demand for payment is required to justify the allowance of attorney's fees.
Whether an assignee of a note must provide notice of assignment and demand for payment before accelerating the note when no place of payment is specified.

Disposition. reversed

Quotations verified verbatim against the opinion

“it becomes apparent that there is involved a triable issue of fact as to whether, in view of all the surrounding circumstances, the plaintiff could properly exercise an option to accelerate payment”

“a demand for payment must be made in order to justify allowance of attorney’s fees.”

MONROE, J. pro tem

The complaint in this action was filed July 14, 1961 and shows on its face that it was prepared for filing the previous day.

Plaintiff sought to recover upon a note dated November 10,

[242]

1960, in the amount of $245,000, payable to James M. Banister and Helen G. Banister, and which provided for payments of $750 per month, payable on the 11th day of each calendar month. After the first three years the amount of the monthly payments was to increase. The note is dated at San Diego, California, but otherwise no place of payment is specified.

Plaintiff alleged that the note was assigned to him on June 21, 1961. He further alleges that payments were made to and including the payment due in June 1961 but alleges failure to pay the installment due July 11, 1961. He alleges that he “has elected and hereby elects that the whole sum of principal and interest of the note be immediately due and payable on said default.” He asks for reasonable attorney’s fee in accordance with the provisions of the note.

By the answer the execution of the note was admitted. Defendant alleged payments of all installments theretofore falling due and denies the remaining allegations of the complaint.

As an affirmative defense, it was alleged that the holders of the note had waived the requirement of strict and punctual payment on the exact due date of the installments and it was further alleged that by reason of the acts of the holders of the note they became estopped to accelerate it.

A motion for summary judgment was filed and affidavits in support thereof and in opposition thereto were likewise filed. The court granted the motion and rendered summary judgment for the amount of $248,859.63, together with interest thereon, and for attorney’s fees in the amount of $500. From this judgment the defendant appeals.

It is to be noted that by the terms of the note the installments payable for the first three years were less than the interest provided, which accounts for the increase in the amount due at the time of trial. No question is raised as to the correctness of that figure.

Green v. Carlstrom

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