ENRIQUILLO EXPORT & IMPORT v. MBR Industries, Inc.

• Court: Florida District Court of Appeals
• Writing for the Court: FARMER, J.
• Citation: ENRIQUILLO EXPORT & IMPORT v. MBR Industries, Inc., 733 So.2d 1124 (Fla. App. 1999)
• Decision Date: 09 June 1999
• Docket Number: No. 98-0134.,98-0134.
• Parties: ENRIQUILLO EXPORT & IMPORT, INC., Appellant, v. M.B.R. INDUSTRIES, INC., Appellee.

733 So.2d 1124

ENRIQUILLO EXPORT & IMPORT, INC., Appellant, v. M.B.R. INDUSTRIES, INC., Appellee.

No. 98-0134.

District Court of Appeal of Florida, Fourth District.

June 9, 1999.

Alex P. Rosenthal and Peter J. Frommer of Reimer & Rosenthal LLP, Hollywood, for appellant.

Richard C. Wolfe and Teri L. Di Giulian of Bedzow, Korn, Brown, Wolfe & Lipton, P.A., Aventura, for appellee.

FARMER, J.

This appeal brings a holding that a debtor complied with a general, unqualified obligation to make payment when it merely placed a check in the mail. We reverse.

Enriquillo originally sued MBR over defective goods for which it had already paid MBR more than $68,000. The parties settled the suit with a written agreement providing as follows:

"1. MBR shall pay to Enriquillo the principal sum of Thirty Thousand dollars to be paid as follows:

a. $10,000 on or before March 1, 1997;

b. $5,000 on or before April 1, 1997;

c. $5,000 on or before May 1, 1997;

d. $5,000 on or before June 1, 1997;

e. $5,000 on or before July 1, 1997.

"2. In the event payment is not timely made as ... provided in ¶ 1 above on any installment thereof, and said default is not corrected within 5 days after receipt of written notice thereof to MBR's counsel, then in that event Enriquillo shall be entitled to a final judgment against MBR computed on the following formula:

$50,000 plus interest calculated at the rate of 12% from the date of this Settlement Stipulation to the date of default minus all sums paid by MBR as ... provided in ¶ 1."

The agreement conspicuously added that:

"It is expressly understood by MBR that time is of the essence in the performance of all terms and conditions of this Settlement Agreement."

There were substantial incentives to MBR in this settlement. For one thing, liability was fixed at $30,000 rather than $68,000 if—but only if—MBR made timely payment under the agreed schedule. Also if the installments were timely made there was no interest due.

And these provisions were no accident. In discussing a proposed settlement, Enriquillo's counsel wrote MBR's lawyer in response to a bare offer of $30,000 that:

"It is my experience that a settlement such as this has no real value unless your client agrees to pay a penalty in the event of a default under the terms of the Settlement Stipulation. Accordingly, my client will not consider a payment plan unless the Settlement Stipulation contains a default provision which entitles us to interest at 12% from the date of settlement, plus a liquidated judgment in the amount of $50,000, less any payments made under the settlement."

Consequently the final agreement contained the payment provision quoted above.

MBR defaulted in the July 1st installment, and its default was not by a mere day or two. When payment was still not forthcoming nearly two months after the payment was due, the creditor delivered a notice on August 25th to MBR's counsel. Again payment was not received, so Enriquillo filed the motion to enforce on September 9th, now more than 70 days after the payment was originally due. It was only after that filing on September 9th that MBR finally produced a check that MBR had placed in the mail on August 28th; the check had been damaged and delayed in the postal system. Hence dilatory and negligent MBR was allowed to prevail over fault-free Enriquillo upon a holding that a check mailed 58 days after it was due and which never did reach the creditor was nevertheless deemed full performance of the duty of payment in the settlement provisions quoted above.

MBR argues that the term pay is ambiguous and that it lends itself to more than one construction. We disagree. There is only one meaning of the general term pay. In 1936 our supreme court held that "[p]ayment contemplates manual delivery of the sum due or the placing of it within the control of the payee if and when contingencies to its payment are met." Waits v. Orange Creek Turpentine Corp., 123 Fla. 31, 166 So. 449, 451 (1936); see also 39 Fla.Jur.2d, "Payment and Tender," § 1 (payment commonly defined as "delivery and acceptance of money or its equivalent in discharge of an obligation"); 70 C.J.S., "Payment," § 2 (payment defined as the "discharge in money of a sum due"); and § 10 ("Generally a creditor is entitled to payment in money, and in the absence of an agreement otherwise providing, or the consent of the creditor to receive some other medium, payment may be made only in money.").

Moreover, the tender of a mere check does not constitute payment of cash or its equivalent and it thus makes such a tender of payment merely conditional. Neuman v. Ferris, 432 So.2d 641, 643 (Fla. 4th DCA 1983); see Cowen v. Indianapolis Life Ins. Co., 116 Fla. 814, 157 So. 180, 182 (1934) ("We are not unmindful of the rule that in the absence of an agreement to the contrary, the acceptance by a creditor of a check, whether it be a cashier's check, certified check, or the debtor's check, or the check of a third person, and the surrender of the evidence of indebtedness and the giving of a receipt do not constitute payment per se."); see also Arthur Linton Corbin, 3A Corbin on Contracts, § 758 at 511 ("Unless the contract clearly specifies some other kind of money, the money that exact performance requires is the kind of money that has come to be called `legal tender.' ... A personal check on a bank is certainly not such `legal tender'."); 70 C.J.S., "Payment," § 18 ("The delivery to, or acceptance by, the creditor of his debtor's check is not payment, in the absence of any agreement or consent to receive it as payment.").

As these authorities demonstrate, there is nothing in the term that lends itself to supposing that good payment is made if a mere check is mailed on or before the due date, regardless of whether it ever reaches the creditor. We of course distinguish those agreements in which payment is specifically defined as placing a check in the mail. In that circumstance the creditor has allowed the debtor to comply with its obligation of payment by merely mailing the check. Where, as in this case, the creditor has made no such agreement, and the debtor's obligation is only an undifferentiated agreement to pay, simply placing a check in the mail is an insufficient...