MOTEL MANAGEMENT COMPANY, INC., A FLORIDA CORPORATION, APPELLANT,
v.
MANNIE WINGER, INDIVIDUALLY, ET AL., APPELLEES
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Motel Management sued original promissory note makers for acceleration of the full principal balance following a missed installment payment. The trial court limited recovery to the single missed installment, but the appellate court reversed, holding that the creditor had the right to accelerate without providing additional notice or opportunity to cure.
The creditor has the right to accelerate the principal balance under the note's terms without being required to seek out the maker or provide notice and opportunity to cure. The trial court erred in limiting the plaintiff's recovery to only the missed installment.
[1] A creditor is not required to seek out a defaulting maker of a note to give them an opportunity to cure the default before exercising the right to accelerate the balance.
[2] A creditor's right to accelerate the principal balance of a note upon default may be exercised even if the defaulting party subsequently tenders the overdue installment.
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Join FLexlaw to unlock all legal intelligence“There is no requirement a creditor seek out the maker and give him opportunity to cure default.”
Establishes that creditors have no obligation to provide notice or cure opportunity when exercising an express acceleration clause in a promissory note.
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Join FLexlaw to unlock all legal intelligenceMotel Management held a promissory note originally for $117,500 from defendants Mann, Winger, and Arnold. When a $12,000 installment was not paid on A…
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WALKER, WILLIAM L., Associate Judge.
Appellant, plaintiff below, sued defendants/appellees on a promissory note in the original principal sum of $117,500, alleging failure to pay a $12,000 installment when due on August 23, 1974. The then remaining principal was $92,682.79. The plaintiff further alleged an acceleration of the principal balance for failure to pay that installment. There is no disagreement by the parties that there is a right by the general terms of the note to accelerate the balance for non-payment of an installment. What is at issue is whether that right was properly exercised. The trial court held that plaintiff was not entitled to accelerate and demand payment from the defendants for anything other than the installment of August 23, 1974.
Defendants Mann, Winger and Arnold are original makers of the note. Slater Properties is a third party defendant. Slater Properties had taken over the properties involved in the mortgage and the primary responsibility to pay the note, but the liability of the original makers was not released nor in anyway extinguished. The note by its terms waives demand. Plaintiff does not seek to foreclose the mortgage but sues the original makers only on the note. Three days after the installment was due, and prior to any acceleration, appellant on August 26, 1974 called Slater Properties informing it of the default, and Slater promised payment of the $12,000 installment. No demand was made at that time upon Mann, Winger and Arnold. Payment was not made as promised and on September 6, 1974 plaintiff telegraphed Slater Properties and the defendants Mann, Winger and Arnold that the plaintiff was accelerating the principal balance. On September 7 a telephone offer of payment was made and rejected. On September 20 a tender of $12,000 certified check was made by defendant Mann. This tender was likewise refused.
Defendants cited Lieberbaum et al. v. Surfcomber Hotel Corf., 122 So. 2d 28 (Fla.App. 3rd, 1960), contending the facts here show an unconscionable acceleration. We believe that case is distinguishable on the facts. Our holding in the present case is supported by Jacobs v. Automotive Repair Center, Inc., 137 So. 2d 263 (Fla.App. 1st, 1962), and Campbell v. Werner, 232 So. 2d 252 (Fla.App. 3rd, 1970). There is no requirement a creditor seek out the maker and give him opportunity to cure default. We see no equitable defense in the facts in the instant case. Reversed and remanded for further proceedings consistent herewith.
REVERSED AND REMANDED.
ALDERMAN, J., and ADAMS, ALTO, Supreme Court Justice (Retired), concur.
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Cent. Home Tr. Co. OF Elizabeth v. Lippincott, 392 So. 2d 931 (Fla. 5th DCA 1980)…Tel Service Co., 212 So. 2d 369 (Fla.2d DCA 1968), modified, 227 So. 2d 667 (Fla.App.,1969). 12 Am. Jur.2d Bills and Notes §§ 1030, 1036, 1054 (1964); 21 Fla.Jur. Limitations of Actions §§ 43, 42 (1958). . Motel Management Company, Inc. v. Winger, 335 So. 2d 9 (Fla. 4th DCA 1976); Federal Home Mortgage Corp. v. Taylor, 318 So. 2d 203 (Fla. 1st DCA 1975), 12 Am.Jur.2d Bills and Notes § 1047 (1964); 11 Am.Jur.2d Bills and Notes § 294 (1963); 6 Fla.Jur.2d Bills and Notes § 272 (1978).…
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Millett v. Demetrio Perez, 418 So. 2d 1067 (Fla. 3d DCA 1982)…e suit, but requires only that the option be exercised, as it was here, prior to tender of amounts due from the mortgagor. A mortgagee simply has no duty to give a mortgagor an opportunity to cure a default. Motel Management Company, Inc. v. Winger, 335 So. 2d 9 (Fla. 4th DCA 1976); Campbell v. Werner, supra, at 257. Therefore, since there exist no equitable grounds which would support the trial court’s denial of the mortgagee’s contractual right to acceleration and a judgment of foreclosure in his favor…
Authorities Cited
- Campbell v. Werner, 232 So. 2d 252 (Fla. 3d DCA 1970)
- The City OF Pensacola v. Blanchard, 232 So. 2d 252 (Fla. 1st DCA 1970)
- Lieberbaum v. Surfcomber Hotel Corp., 122 So. 2d 28 (Fla. 3d DCA 1960)
- Jacobs v. Auto. Repair Ctr., Inc., 137 So. 2d 263 (Fla. 1st DCA 1962)