This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case concerns a dispute over whether a borrower could tender real estate, instead of currency, to satisfy a $4 million promissory note secured by a deed of trust. The borrower transferred the property to a partnership and attempted to tender the property, along with accrued interest, to the lender before and upon the note's maturity. The lender rejected these tenders, leading the borrower to seek a declaratory judgment that the tender satisfied the debt (paras 2-4).
Procedural History
- District Court of Bernalillo County: Granted summary judgment in favor of the lender, finding that the promissory note, deed of trust, and guaranty did not authorize the tender of real estate to satisfy the debt (para 2).
Parties' Submissions
- Plaintiffs-Appellants (Borrower): Argued that the note, deed of trust, and guaranty allowed the principal to be satisfied either by tendering $4 million or by tendering the property. They contended that the lender's agreement to look solely to the property for satisfaction of the debt principal implied acceptance of property as valid tender (paras 4, 6).
- Defendant-Appellee (Lender): Asserted that the nonrecourse provisions limited remedies to the property but did not authorize the borrower to unilaterally tender the property in lieu of payment. They argued that the tender of property was not agreed upon and was therefore invalid under the terms of the documents (paras 7-8).
Legal Issues
- Did the promissory note, deed of trust, and guaranty authorize the borrower to tender real estate, instead of currency, to satisfy the debt? (paras 2, 5).
Disposition
- The Supreme Court of New Mexico affirmed the district court's decision, holding that the tender of real estate was not authorized under the terms of the note, deed of trust, and guaranty (para 10).
Reasons
Per Frost J. (Baca and Franchini JJ. concurring):
The court found that the promissory note, deed of trust, and guaranty were clear and unambiguous, and must be enforced as written. The documents did not authorize the borrower to tender property in lieu of currency to satisfy the debt. The nonrecourse provisions limited the lender's remedies to the property but did not permit unilateral tender of the property as payment. The court emphasized that, under Texas law, tender must be made in currency unless otherwise agreed, and no evidence of such an agreement existed in this case. Allowing property tender would introduce uncertainty into lending transactions and contradict the plain language of the documents (paras 5-9).