R. Brown & Sons, Inc. v. Credit Alliance Corp., 82-419

Decision Date03 February 1984
Docket NumberNo. 82-419,82-419
Citation473 A.2d 1168,144 Vt. 142
CourtVermont Supreme Court
PartiesR. BROWN & SONS, INC. and Robert B. Brown and Jeannette Brown, Individually and as Husband and Wife v. CREDIT ALLIANCE CORPORATION.

John A. Burgess, Berkeley, Cal., for plaintiffs-appellants.

Glenn S. Morgan, and James B. Anderson, on the brief, Ryan Smith & Carbine, Ltd., Rutland, for defendant-appellee.

Before BILLINGS, C.J., and HILL, UNDERWOOD, PECK and GIBSON, JJ.

BILLINGS, Chief Justice.

Plaintiffs and defendant appeal from an order rendered by the Chittenden Superior Court on plaintiffs' action for injunctive relief and declaration of rights concerning loans from the defendant to the plaintiffs and the collateral used to secure the loans. The court ordered judgment for the defendant in the amount of $70,498.08 against all plaintiffs covering principal, late charges and reasonable attorney fees. In addition, the court declared that the individual plaintiffs were entitled to a discharge of the mortgage on their home held by the defendant. On appeal, plaintiffs contend that: (1) the loans made to the plaintiff corporation (corporation) by defendant were in contravention of Vermont's usury law, 9 V.S.A. § 41a; (2) late charges of $10,319.34 were incorrectly calculated by the trial court; (3) promissory notes executed by the plaintiff corporation were void because not in compliance with the bold type requirements of 9 V.S.A. § 102. Defendant appeals the court's order discharging its mortgage on the individual plaintiffs' personal residence.

In 1975 the plaintiff corporation executed two purchase money security agreements in favor of the defendant for the purchase of two pieces of equipment for use in its car-crushing business. In 1977, because the corporation was in default on both loans, defendant agreed to refinance. The corporation executed a promissory note in favor of the defendant in the amount of $79,607.54, which represented the outstanding indebtedness from the loans and finance charges. The note was secured by a chattel mortgage on the corporation's machinery, inventory and accounts. Plaintiffs Robert Brown and Jeannette Brown, individually, signed both an endorsement and a personal guaranty of the corporation's promissory note.

In 1978, the corporation borrowed an additional $15,000 from defendant; it executed a second promissory note which was, again, endorsed by the individual plaintiffs. The individual plaintiffs also executed, in conjunction with the $15,000 loan, a second real estate mortgage, in favor of the defendant, on their personal residence. In 1979, responding to a statement sent by defendant of the balance due on the 1978 promissory note, plaintiff Robert Brown remitted a check for $631.86. The plaintiff noted on the check that it was a "Final Payment--H.M."; he enclosed the check with a letter that also indicated that the $631.86 represented the final payment on the 1978 $15,000 loan, and requested that the defendant discharge the mortgage. Defendant cashed the check but refused to discharge the mortgage, claiming that it not only covered the $15,000 loan but also the outstanding indebtedness from the 1975 and 1977 loans.

We address the defendant's claim first. "It is [a] well settled rule that, if one who has a disputed claim against another accepts and retains a less amount than he claims is due which is offered by the other in full settlement of such claim it operates as an accord and satisfaction of such claim, and further controversy respecting it is ended." Curran v. Bray Wood Heel Co., 116 Vt. 21, 24-25, 68 A.2d 712, 715 (1949). Here, the evidence supports the trial court's conclusion that "[h]aving accepted and cashed the plaintiffs' check, with full knowledge of the dispute and the conditions under which it was tendered, defendant is obligated to discharge the mortgage and note in question." The individual plaintiffs believed that the mortgage on their home, in favor of the defendant, was intended to secure their 1978 loan of $15,000, and not as additional collateral for the entire indebtedness of both the $15,000 loan and the 1975 and 1977 loans to the corporation. They conveyed this to the defendant by noting on the check that the $631.86 was a final payment, and by stating, in the accompanying letter, that "[t]his is the final payment of indebtedness of any kind whatsoever to you" on the second mortgage. Under these conditions, defendant cashed the check and retained the proceeds. The trial court correctly found an...

To continue reading

Request your trial
9 cases
  • Schaafsma v. Morin Vermont Corp.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • October 3, 1986
    ... ... land which actually belonged to Crete Farm, Inc., rather than Lamoille. Mr. Schaafsma wrote to ... Nolan and Brown, 125 Vt. 82, 84-85, 211 A.2d 265 (1965), we need ... Brown & Sons, Inc. v. Credit Alliance Corp., 144 Vt. 142, ... ...
  • Lillicrap v. Martin
    • United States
    • Vermont Supreme Court
    • July 14, 1989
    ... ... in Neurology, ... Inc., J. Bishop McGill, M.D., Warren L. Beeken, ... V.R.C.P. 8(c); White Current Corp. v. State, 140 Vt. 290, 292, 438 A.2d 393, 394 ... Otherwise, the defense is waived. See R. Brown & Sons v. Credit Alliance Corp., 144 Vt. 142, ... ...
  • O'Brien v. Island Corp., 87-061
    • United States
    • Vermont Supreme Court
    • June 28, 1991
    ... ... Waite v. Brown, 132 Vt. 20, 25, 312 A.2d 915, 916 (1973); ... R. Brown & Sons, Inc. v. Credit Alliance Corp., 144 Vt. 142, 145, ... ...
  • Vermont Development Credit Corp. v. Kitchel
    • United States
    • Vermont Supreme Court
    • March 11, 1988
    ...This Court has already, albeit in dicta, distinguished between "co-signers" and "guarantors." 5 In R. Brown & Sons, Inc. v. Credit Alliance Corp., 144 Vt. 142, 473 A.2d 1168 (1984), plaintiff corporation executed two promissory notes with defendant, and individual plaintiffs signed personal......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT