Peter Fuller Enterprises v. Manchester Savings Bank

Peter Fuller Enterprises (Fuller) (plaintiff) entered into two mortgage agreements with Manchester Savings Bank (Manchester) and one mortgage agreement with Amoskeag Industries, Inc. (collectively, the mortgagees) (defendants). Each of the three notes required quarterly payments of principal and interest for a five-year term, commencing in April 1958 and maturing in April 1963. Each note also contained an acceleration clause providing that upon 60 days’ default in payments, the entire loan balance, inclusive of both principal and interest, would become due and payable. In February 1959, Fuller attempted to pay the outstanding principal on each of the three loans in full, along with all interest due to date. The mortgagees refused Fuller’s attempted prepayments. Fuller subsequently asserted that each of the notes had been automatically accelerated due to missed payments in February, March, and April of 1959. Fuller filed a bill in equity seeking that the mortgages be fully discharged upon the substitution of equivalent security, alleging that failure to do so would cause Fuller significant financial harm. The trial court held a hearing on the merits and determined that the mortgages and notes were valid and did not mature until 1963. The trial court also found that if the mortgages were not discharged, Fuller might suffer significant financial loss. The matter was transferred by the trial court to the New Hampshire Supreme Court without ruling for that court’s determination regarding whether the trial court had the authority to reform and discharge a valid mortgage that had not yet matured.