Brown v. Hewitt

On Appellants’ Motion for Rehearing.

CODY, Justice.

The evidence in this case, and the findings of the court, make it clear that the action of Geo. W. Hewitt in undertaking to exercise his option to accelerate the maturity of the note was not done for the purpose of protecting his debt or preserving its security, but was done to coerce appellants into not paying off such debt, and into surrendering their right to pay it on or before the installment dates, in order to refinance it at a lower rate of interest. It appears that the installment maturing on September 10, 1938, could have been paid by appellants on that day as readily as four days later, and that they had mailed their check to Hewitt, and he had received it on September 10, 1938, before they knew that he would seek to mature the entire indebtedness for merely paying the installment according to their usual course of •dealing. In this state of affairs, what was said in Parker v. Mazur, Tex.Civ.App., 13 S.W.2d 174, 175, seems decisive: “The clause as to the maturity of the whole debt was not positive and self-executing, but depended for its vitality upon the will and desire of the owner and holder of the notes, and equity would demand notice of such will and desire before demand should be made for the payment of the entire debt. The failure to give notice of an intended act could not be known except to the payee of the notes, and it was harsh and inequitable for him to exercise the right of acceleration without due notice to the maker of the notes. A court of equity may relieve against a provision for acceleration * * * ‘when it is procured by * * * inequitable conduct of the creditor himself.’ ” (Citing authorities.) And in the recent case of Curtis v. Speck, 130 S.W.2d 348, writ of error refused, we held through Chief Justice Monteith that formal demand must be made for any installment on a debt before the debt can be declared due.

It appears that Hewitt had received payment of the installment, due on September 10, 1938, before he formally attempted to mature the entire indebtedness for failure to pay such installment on September 10, 1938, the law day. But, under the cited authority, Hewitt had no right to mature the entire debt, not having afforded appellants an opportunity to pay the installment before acceleration of the entire indebtedness for failure to pay such installment. Since the debt was not due, the court should have enjoined the sale.

It follows from these conclusions that appellants’ motion for rehearing should be granted, the trial court’s judgment reversed, and the cause remanded to that court with instructions to issue the injunction as prayed for. Justices GRAVES dissents, believing our original opinion to have been correct.

Rehearing granted, trial court’s judgment reversed, and cause remanded with instructions.

GRAVES, J., dissenting.