Drennan v. Security Pacific National Bank

Opinion

MOSK, J.

Plaintiff, Loyd S. Drennan, purchased a mobilehome financed by defendant Security Pacific National Bank (defendant) under a conditional sale contract. The contract provided that if plaintiff repaid the indebtedness prior to maturity, he was entitled to a refund of the unearned portion of the finance charge in accordance with the “Rule of 78’s.” Plaintiff claims that the contract was an adhesion contract, that the term “Rule of 78’s” is ambiguous, and that the prepayment provision is void.

The primary question before us is whether federal law precludes us from requiring that…