Cassiani v. Bellino
| Citation | 157 N.E.2d 409,338 Mass. 765 |
| Parties | Angelo CASSIANI v. Mary BELLINO et al. |
| Decision Date | 03 April 1959 |
| Court | United States State Supreme Judicial Court of Massachusetts |
Frank P. Fralli, Boston, for Angelo Cassiani.
George Gruzen, Boston, for Mary Bellino, Robert Bellino, Lucille Horowitz.
Before WILKINS, C. J., and RONAN, SPALDING, WILLIAMS and CUTTER, JJ.
This action of contract is by the indorsee against the three makers of a promissory note, a copy of which is set forth in the margin. 1 The District Court judge denied the defendants' requests for rulings and found for the plaintiff. The Appellate Division dismissed a report, and the defendants appealed.
We need not extend discussion of the denial of the defendants' first five requests for rulings. These were rendered inapplicable by findings warranted by the evidence. Whittaker v. Eastern States Engr. Corp., 269 Mass. 451, 458, 169 N.E. 419. Wood v. Spedoni, 328 Mass. 483, 485, 104 N.E.2d 491; M. DeMatteo Const. Co. v. Commonwealth, 338 Mass. ----, 156 N.E.2d 659.
The sixth request was: 'The provision of the note providing by its terms that if any default shall be made in the payment of any instalment of principal or interest, and such default continues for thirty days, the whole principal sum then remaining unpaid, together with interest shall at the option of the holder hereof become due and payable on demand, requires as a matter of law that demand must be made before suit is commenced.'
The District Court judge found that the payee indorsed the note to the plaintiff on or about May 14, 1957, for $2,500 cash. On May 20, 1957, the plaintiff's counsel sent a letter to the defendants notifying them of the transfer and requesting payment of $77.37 interest which had become due on April 30, 1957. No payment having been made on the note, this action was begun on July 2, 1957.
The defendants' argument seems to run as follows. The note is for a term of two years with a separate provision, in case of default, for acceleration at the option of the holder upon demand. Under G.L. c. 107, § 93, * 'Presentment for payment is not necessary to charge the person primarily liable on the instrument.' But if the promise to pay is conditional, demand is necessary to charge such a person. See Goodfellow v. Farnham, 239 Mass. 590, 591, 132 N.E. 363. Because of the words 'on demand,' it is insisted that the note in suit is conditional. No pertinent authority is cited.
We cannot accept this contention. The defendants do not argue that they were ready and able to make payment of the instalment of interest but did not know where to make it. See Shapiro v. Weber, 220 App.Div. 667, 222 N.Y.S. 421. Nor is this a case where the defendants were not given a fair opportunity to pay. See Bardsley v. Washington Mill Co., 54 Wash. 553, 103 P. 822, as modified by James v. Brainard-Jackson & Co., 64 Wash. 175, 178, 116 P. 633, and Hartge v. Capeloto, 136 Wash. 538, 542, 241 P. 5. The record would not permit those arguments.
The acceleration clause is valid. A-Z Servicenter, Inc. v. Segall, 334 Mass. 672, 676, 138 N.E.2d 266. The note was negotiable notwithstanding that clause. G.L. c. 107, § 24. ** Star Brewing Co. v. Higgins, 248 Mass. 480, 481, 143 N.E. 332. See General Mortgage & Loan Corp. v. Dickey, 274 Mass. 207, 211-212, 174 N.E. 176. To enforce a note payable on demand, the bringing of suit is in itself a sufficient demand. Burnham v. Allen, 1 Gray, 496, 499. Jillson v. Hill, 4 Gray, 316, 317. Farmers Natl. Bank of Annapolis v. Venner, 192 Mass. 531, 534, 78 N.E. 540. Cormier v. Brock, 212 Mass. 292, 295, 98 N.E. 1038. Goodfellow v. Farnham, 239 Mass. 590, 591, 132 N.E. 363. Stevens v. Berkshire St. Ry., 247 Mass. 399, 401, 142 N.E. 59. As we said as to the institution of another type of suit, 'A more definite and insistent form of 'written demand' could hardly be imagined.' Standard Oil Co. of New York v. Y-D Supplies Co., 288 Mass. 453, 455, 193 N.E. 66, 67.
The defendants also argue that after default the principal was not due without a demand for payment of the accelerated amount. They point out that the plaintiff's letter asked only for the payment of interest. This point is of first impression in this Commonwealth. The views of other courts are divided. The only citation made by the defendants is Parker v. Mazur, Tex.Civ.App., 13 S.W.2d 174, which is representative of the judicially declared law of Texas that in the circumstances general equitable principles require presentment and demand for payment of the accelerated amount. See Griffin v. Reilly, Tex.Civ.App., 275 S.W. 242; Ross v. Isaacs, Tex.Civ.App., 54 S.W.2d 182, 186; Faulk v. Futch, 147 Tex. 253, 257, 214 S.W.2d 614, 5 A.L.R.2d 963. Another case holding that demand upon the maker is necessary to accelerate the payment of the entire debt is Berkowitz v. Kasparewicz, 121 Conn. 140, 146, 183 A. 693, 104 A.L.R. 1326.
To the contrary and to the effect that a demand for the full amount, or notice of an intention to exercise the option to collect it, is not a condition precedent to bringing suit, are cases in many jurisdictions. Some are of long standing. Hewitt v. Dean, 91 Cal. 5, 7-8, 27 P. 423. Hendron v. Bolander, 101 Colo. 414, 418-419, 74 P.2d 706; Brown v. McKay, 151 Ill. 315, 323-324, 37 N.E. 1037; Buchanan v. Berkshire Life Ins. Co., 96 Ind. 510, 520; Swearingen v. Lahner, 93 Iowa, 147, 152, 61 N.W. 431, 26 L.R.A. 765; Farmers' Bank & Trust Co. v. Dent, 206 Ky. 405, 411, 267 S.W. 202; Johnson v. Van Velsor, 43 Mich. 208, 214-215, 5 N.W. 265; Fowler v. Woodward, 26 Minn. 347, 348-349, 4 N.W. 231; Morling v. Bronson, 37 Neb. 608, 611, 56 N.W. 205; Corbett v. Ulsaker Printing Co., 49 N.D. 103, 106-107, 190 N.W. 75, 24 A.L.R. 1047; Harrison v. Beals, 111 Or. 563, 571, 222 P. 728.
The interpretation of the acceleration clause is governed by the law of contracts and was not covered by the negotiable instruments law, which was in effect at the time of the transaction. See Shapiro v. Weber, supra, 220 App.Div. 667, 669, 222 N.Y.S. 421. In the existing state of the authorities, we have a free choice of the rule which, to our thinking, is better suited to negotiable instruments and commercial practice. Ours is now the decision whether the signer of a note containing an acceleration clause upon default optional with the holder is, after default, entitled to a special notice, as a condition precedent to suit, that the holder has elected to avail himself of the benefits of that clause. A maker must be held to know what he signed. We do not favor placing this unnecessary burden upon the recovery of the loan. We are aware of no policy in this Commonwealth which would handicap the...
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...a demand note properly may bring suit on the note without first demanding payment of the balance due on the note (Cassiani v. Bellino, 338 Mass. 765, 767, 157 N.E.2d 409 [1959] ) and also may on its own motion set off the balance due under the demand note against the maker's unencumbered as......
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...there was a default. The rights of the parties are determined by the contractual agreements between them. See Cassiani v. Bellino, 338 Mass. 765, 768, 157 N.E.2d 409 (1959). The notes, which could have been controlling in this respect, did not explicitly define a default. See 2 G. Gilmore, ......
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