Shumway v. Horizon Credit Corp.
Texas Supreme Court
801 S.W.2d 890 (1991)
Facts
Horizon Credit Corporation (Horizon) (defendant) loaned money to Gene and Sandra Shumway (plaintiffs), which the Shumways used to buy a sailboat. The Shumways signed a promissory note providing for repayment of the loan in monthly installments over 15 years. The note also contained an optional acceleration clause, which gave Horizon the option to demand the entire unpaid balance upon the Shumways’ default plus interest and late fees without prior notice or demand. The sailboat was damaged in an accident before the Shumways finished repaying the loan. The Shumways felt the sailboat was totaled, but their insurer disagreed. Shortly thereafter, the Shumways stopped paying the monthly installments to Horizon. Consequently, Horizon sought to accelerate the note and sued the Shumways for the entire unpaid balance plus interest. Horizon moved for summary judgment, which the trial court granted. The appellate court affirmed, and the majority held that the Shumways expressly waived their rights to presentment, notice of intent to accelerate, and notice of acceleration based on the acceleration-clause language. The Shumways appealed and argued that they did not waive these rights.
Rule of Law
Issue
Holding and Reasoning (Hecht, J.)
Concurrence (Mauzy, J.)
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