Court Opinion

ID: 9662820
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:19:02.418995+00
Date Added: 2024-06-11T18:14:42.802242
License: Public Domain

MAUZY, Justice,
concurring.
In addressing the general enforceability of waiver provisions, the court overreaches. Neither the Shumways nor Horizon Credit Corporation ever raised this issue. The only question presented by the parties was whether this waiver provision’s specific language was sufficient. Therefore, the court’s general discussion of enforceability is mere dicta. I would have waited for a case in which the parties themselves raised the issue; however, since the court insists on reaching it now, I write separately.1 I concur only because I agree with the court’s judgment reversing and remanding the case.
I would hold that the contractual waiver of the maker’s right to demand for payment, notice of intent to accelerate and notice of acceleration is void as against public policy and therefore unenforceable. This court has long recognized the harshness of the remedy of acceleration and has sought to mitigate its effects by imposing several equitable requirements on the holder of a promissory note. Allen Sales and Servicenter, Inc. v. Ryan, 525 S.W.2d 863, 866 (Tex.1975); Motor & Indus. Fin. Corp. v. Hughes, 157 Tex. 276, 302 S.W.2d 386, 394 (1957). First, the holder must make a demand for payment of any overdue installment. Ryan, 525 S.W.2d at 866. This requirement seeks to avoid a forfeiture by allowing the maker to cure the default prior to the holder’s acceleration of the note. Id. Second, a holder must give clear and unequivocal notice of intent to accelerate. Ogden v. Gibraltar Sav. Ass’n, 640 S.W.2d 232, 234 (Tex.1982). This notice is also required to allow the maker an opportunity to cure the default. It must explicitly state that failure to cure will result in foreclosure and the possibility of a deficiency judgment. Id. Third, the holder must give clear and unequivocal notice that it has in fact accelerated the debt. Ogden, 640 S.W.2d at 234.
The reasons for requiring the holder to take these steps prior to acceleration are clear. Many promissory notes, like the one at issue, contain a “default provision” that lists the events triggering the maker’s default. The holder may accelerate the note upon the occurrence of any one of these events, even though the maker may be unaware of its occurrence or the occurrence may be beyond the maker’s control.2 Further, commercial lending practices over the years, have generally revealed that: (1) *896the lender alone drafts the “boilerplate” terms of the note; (2) makers rarely read a waiver provision, and even if they do, they do not understand its legal significance or are without power to delete or change it; and (3) a maker’s attempt to “shop around” for better terms is futile because competing lenders offer substantially the same terms. See RESTATEMENT (SECOND) OF CONTRACTS § 211, comment b (1981) and Rakoff, Contracts of Adhesion: An Essay in Reconstruction, 96 Harv.L.Rev. 1174, 1179 n. 21 (1983).
Equity demands that the maker always have a meaningful opportunity to cure any default before a holder is permitted to accelerate the note, repossess the collateral, sell it at a foreclosure sale and bring suit against the maker for a deficiency judgment. To hold otherwise places this court in the position of enforcing a contract that “no man in his senses and not under delusion would make on the one hand, and [which] no honest and fair man would accept on the other.” Earl of Chesterfield v. Janssen, 2 Ves.Sen. 125, 155, 28 Eng.Rep. 82, 100 (1750).
The court’s reasoning on the enforceability of waiver provisions conflicts with the reasoning of prior decisions which have been openly hostile toward attempted waivers of important rights. We held that an exculpatory provision exempting a landlord from liability for negligence was void as against public policy due to the unequal bargaining positions of the parties. Crowell v. Housing Authority of City of Dallas, 495 S.W.2d 887, 889 (Tex.1973). More recently, this court created a common-law implied warranty of good and workmanlike repair that we held could not be waived or disclaimed. Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 355 (Tex.1987). As we stated, “[i]t would be incongruous if public policy required the creation of an implied warranty, yet allowed the warranty to be disclaimed and its protection eliminated merely by a pre-printed standard form disclaimer or an unintelligible merger clause.” Id.
The maker’s rights to demand for payment, notice of intent to accelerate and notice of acceleration are valuable rights that this court should protect from skillful drafters who routinely insert waivers of these rights into pre-printed forms. If we waited for the lenders of this world to provide for these rights in their forms, or for borrowers to achieve the bargaining powers to negotiate these terms, these equitable rights simply would not exist. The court’s opinion ignores reality. Borrowers do not stand in an equal bargaining position with their lenders. In pretending that they do, the court abdicates its traditional function as guardian of these equitable rights.

. This opinion was originally drafted by Justice Franklin Spears prior to his departure from the court. Because I agree with the position he took, I have substantially adopted his concurrence as my own.

. The note in this case provides that the maker is in default if:
(1) I don’t make any payment when due; or
(2) break any promise made in this Note or in any related preferred ship mortgage or other security agreement effective now or in the future; or (3) I have made any false or misleading statement in your credit application; or (4) I become unemployed or insolvent; or (5) I do not keep the Vessel insured as required by any preferred ship mortgage or other security agreement; or (6) I die; or (7) I file for bankruptcy or similar relief from paying my debts or creditors file for bankruptcy against me or someone other than you puts a lien on the Vessel; or (8) someone other than you puts a lien on my income or enough of my other property to interfere with my ability *896to make payments under the Note; or (9) the value of the Vessel decreases other than through norma] wear and tear; or (10) I interfere with the federal documentation of, and preferred ship mortgage on the Vessel; or (11) I am a corporation and my shares are transferred to someone who was not a guarantor of this Note when it was signed; or (12) anything else happens that you in good faith and with reasonable cause believe may impair my ability to pay or otherwise perform under this Note.