Promissory notes are a common legal instrument used in connection with the lending and borrowing of money. They are typically “black and white” cases when it comes to enforcement when there is a breach. To make a prima facie case on breach of promissory note, there needs to be a showing that the (1) maker(s)…
Legal Articles
Guarantees: Interpretation, Breach
Personal guarantees or guarantees by another business are commonly required by lenders to provide additional safeguards for a loan. In litigation, the same rules that apply to contract interpretation apply to guaranty interpretation. Royal Banks of Mo v. Fridkin, 819 S.W.2d 359, 361 (Mo. 1991). Specifically, the language of the guaranty is to be understood in…
Grounds for Wrongful Foreclosure
In Missouri, the grounds for wrongful foreclosure are limited. Most foreclosures occur outside of the court system through a deed of trust. A foreclosure of a deed of trust is not wrongful when there is a clear right to foreclose under the underlying promissory note and/or deed of trust. Loeb v Dowling, 162 S.W.2d 875, 877…
Demand Notes and Installment Notes
Promissory notes are legal documents whereby the maker of a note promises to pay a certain amount of money to a payee. In Missouri, promissory notes are interpreted consistent with contract law. Every promissory note will contain repayment terms and usually include interest that accrues. Generally, payments are set on fixed dates or on the…
Enforcement of Promissory Notes
A promissory note is, in its broadest sense, a promise to repay money on certain terms and conditions. In business — particularly between banks and creditors — promissory notes are often bought and sold because there can be big money (and risk) in holding and collecting debt with interest. A deluge of legal issues can…
Receivership, Emergency Custody, Control and Management
A receiver is an individual/entity which generally takes charge of property, keeps it in its custody for a set period of time, and manages it on set terms and conditions. In application, it is often reserved for situations in which there is an emergency or imminent threat of loss. For example, if a bank has…
Holder in Due Course: Promissory Note Enforcement
Debt instruments are frequently bought and sold. If A borrow money from B and signs a promissory note promising B to pay the money back in the future, it is not uncommon for B to sell his/her rights under the promissory note (usually to make a quick profit). In many cases, a litany of transfers…
Wrongful Foreclosure, Deed Set Aside: Real Estate
Missouri foreclosures typically occur outside of Court because property is conveyed through a deed of trust, rather than a mortgage. Although “mortgage” and “deed of trust” are often used interchangeably, there is a distinction. Specifically, under a deed of trust, a trustee holds legal title to the property while the borrowers hold equitable title to…
Statutory & Equitable Redemption for Deeds of Trust, Foreclosures
Redemption refers to the ability of a mortgagor to stop a foreclosure after a default. Missouri almost uniformly uses a deed of trust arrangement to handle real estate financing. Under this arrangement, a trustee holds legal title title to the property while equitable title remains with the borrower/mortgagor — i.e., the person(s) generally living on…
Breach of Contract or Promissory Note
Contracts and promissory notes are similar in that they impose legally binding obligations, but they are interpreted and formed in very different ways. A promissory note is a promise to pay a fixed amount of money at a set time. Rather than a present exchange of consideration (which contracts require), the promissory note is often…