Court Opinion

ID: 7309695
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:58:28.495188+00
Date Added: 2024-06-11T08:47:56.679470
License: Public Domain

Freund, J. A. D.
(dissenting). I am in substantial accord with the majority’s reasoning that the defendant bank is not bound to rebate unearned interest by reason of statute, by usage or custom or by principles of quasi-contract. I disagree, however, with the holding that there is no material factual issue in relation to whether the bank waived its right to interest or was entitled to interest beyond the date of payment of the debt. I am of the further opinion that it is not significant • that plaintiffs did not plead that the defendant’s conduct constituted a waiver.
Plaintiffs’ complaint was dismissed on defendant’s motion, apparently made in the chambers of the district court judge, before counsel were permitted to proceed with the selection of a jury. The majority points out the various respects in which plaintiffs’ appellate presentation fails to conform to the rules of court. Quite apart from the circumstance that their argument is not supported by record references, the fact is that defendant’s counsel consented at oral argument to our considering the proffered proofs as if properly included *13in the record. Plaintiffs represent that they would have proved at the trial that, among other things, on November 1, 1957, four months after the contract with Pura-Tex was executed, their attorney telephoned the bank and was advised by a “representative handling EIIA Home Modernization loans” that “plaintiffs should be entitled to a rebate” of unearned interest if they satisfied their five-year monthly installment obligation in full in advance of maturity. On that same day plaintiffs went to the bank to pay the outstanding balance on their note, under the impression that they would thereafter receive the interest rebate in the mail. Their attorney later assured them that “if the bank said she would receive a rebate, she would, probably in a few days.”
Approximately 15 months later, plaintiffs returned to the bank and told two of its officers what had happened. Both of these officers asserted that they had in fact already received a rebate of $432.70. They accused plaintiffs of having poor memories and insinuated that they were trying to claim money to which they were not entitled. Two months later, plaintiffs commenced this action. They have four bank receipts indicating they paid a total of $2,218.80. It is the position of the bank that, regardless of the receipts plaintiffs have, they actually paid only $1,786.10, and that because they prepaid the obligation their account was credited with the payment of the balance. As is stated in the bank’s brief,
“It has always been and is the defendant’s contention that on November 1, 1957 the defendant Bank had credited plaintiffs’ account with the sum of $432.70 in computing the balance due on plaintiffs’ note and had received a total of $1,786.10 in payment of the $2,218.80 note.”
It ought to be noted that this contention could easily be verified by the bank’s records if it is the fact.
It is of course a general rule that, absent a prepayment clause, a debtor has no greater right to compel his creditor to accept payment before it is due than the creditor has to *14compel payment before that time. See, e. g., Annotation, 17 A. L. R. 866 (1922). But it is also true that the creditor may waive his rights and accept payment before maturity or otherwise agree with the debtor to forego interest in return for an early payment. 40 Am. Jur., Payment, § 10, p. 719, text at n. 20 (1942); 47 C. J. S. Interest § 29, p. 40 (1946).
Summary judgment is appropriate only where the record shows palpably that there is no issue as to any material fact. R. R. 4:58-3; Frank Rizzo, Inc. v. Alatsas, 27 N. J. 400, 405 (1958). Application of that rule in this case requires that the circumstances attending plaintiffs’ prepayment of the debt be fully explored at trial. The bank’s contention that the unearned interest was credited to plaintiffs’ account at the time is confirmation of the view that an agreement pertaining to prepayment may have been reached or that such payment may have been made pursuant to defendant’s waiver of its contractual rights. My colleagues are of the view that the telephone conversation with the bank’s representative does not indicate that the defendant consented to or induced an early payment of the debt; they attribute the prepayment to a mistake on the part of the attorney in thinking plaintiffs had received an EHA loan. My opinion, however, is that the proffered proofs regarding this conversation can reasonably support the conclusion that plaintiffs were induced to make an early payment of the debt, not by a mistaken impression of their attorney, but by the fact that the bank representative said unqualifiedly, and without regard to whether it was an FHA loan, that these plaintiffs should be entitled to a rebate. How else explain the present claim of the bank that plaintiffs received a $432.70 credit that very afternoon? It is unlikely that the bank would suddenly and voluntarily extend such a credit. Needless to say, our present difficulty in reconstructing what transpired between plaintiffs and their attorney and the bank would be obviated if the issues had been illuminated by testimony.
The fact that plaintiffs did not 'plead waiver in their com*15plaint does not lead to a contrary result. Waiver need only be set forth affirmatively “in pleading to a preceding pleading.” R. R. 4:8-3. See also 56 Am. Jur., Waiver, § 19, p. 120 (1947). In district court practice, a written answer is not necessary, R. R. 7:5-4(a), and the record on appeal does not contain one or state that such pleading was filed. In any event, notwithstanding that the waiver theory was not urged in the district court or on appeal, its pertinence is so obvious in the factual setting presented as to require a trial on that or a similar theory as a matter of substantial justice. Plaintiffs satisfied their debt within four months; we must assume for present purposes that the bank has collected five years’ interest. I am of the view that the case should not be summarily disposed of but that plaintiffs should be afforded an opportunity to present evidence to support the hypothesis either that they prepaid pursuant to an arrangement with the bank respecting unearned interest or that they did so as a result of waiver, express or implied, on the defendant’s part, and, further, that they did not in fact receive the credit the bank contends it gratuitously and without prearrangement extended to them.
I would reverse for trial.