Sears, Roebuck & Co. v. McClure

• Decision Date: 26 May 1942
• Citation: 8 So.2d 390,150 Fla. 667
• Court: Florida Supreme Court
• Parties: SEARS, ROEBUCK & CO. v. McCLURE.

8 So.2d 390

150 Fla. 667

SEARS, ROEBUCK & CO. v. McCLURE.

Florida Supreme Court

May 26, 1942

Appeal from Circuit Court, Lake County; J. C. B. Koonce judge.

P. C Gorman, of Leesburg, for appellant.

H. L Pringle, of Leesburg, for appellee.

CHAPMAN, Justice.

This is an action on a promissory note between the original parties. The declaration is in the usual form and the issues were submitted to a jury on pleas of the defendant to the plaintiff's declaration, viz.: 1-a: that defendant did not sign the note sued upon; 10-a: Discharged by payment; and 11-a: the latter plea alleged that defendant, on April 4 1934, was due plaintiff the sum of $5,296.67, secured by a real estate mortgage on property located in the state of Indiana. The Federal Land Bank loaned defendant the sum of $3,840 and accepted a mortgage on the same real property held by the plaintiff. The sum of $3,840 was paid to the plaintiff in full payment and satisfaction of its indebtedness. The plaintiff, when accepting payment, signed a written instrument canceling its entire indebtedness against the defendant. That plaintiff refused to sign the cancellation agreement addressed to the Federal Land Bank until and when the defendant would sign the note sued upon. The cancellation agreement so signed by the plaintiff does not appear in the record. The plea alleged 'that at the time of the execution and delivery of the note to the plaintiff the plaintiff agreed by parol to accept in payment thereof an assignment of a lease providing for certain rentals on a building' situated in the City of Chicago; 'that said rentals were assigned to the plaintiff by the defendant in compliance with the agreement'. Plea 11-a makes subparagraphs a. b. c and d of defendant's plea 2-a, by reference, a part thereof.

The lower court sustained the plea against a motion to strike and a demurrer by the plaintiff. There was no motion to strike the last-quoted provision of amended plea 11-a. Likewise a replication of the plaintiff to this plea was denied by the trial court. There was a verdict and judgment for the defendant, and an appeal therefrom has been perfected to this court. Counsel for the respective parties propose separate questions for adjudication.

In the case of David Bilgore v. Gunn, Fla., 9 So.2d 184, opinion filed this day, not yet reported [in State reports], this Court had before it and considered one of these scale down agreement notes when we, in part, said: 'In many jurisdictions where these scale down agreements have been considered the holdings are uniform that such agreements are valid and binding on the parties on the theory that the Federal Land Bank desired to place its creditor in a sound financial position so that he could pay the amount of the mortgage to the Bank at the maturity date. If notes are upheld when given in derogation of the scale down agreements, then the purpose of the Congressional Act authorizing the loan would be defeated. The debt under which the farmer was struggling would remain unchanged. It was the reduction of the farmer's debts that was desired so that he might make a success of his business. If creditors were permitted to disregard or ignore the debt reduction agreement and accept notes for the balance due on the old debts, then the farmer would be in no better position than he had been prior to the time the bank came to his assistance with the loan. It was in legal effect an accord and satisfaction of the entire indebtedness of the farmer. See O'Neil v. Johnson, D.C., 29 F.Supp. 307; Geel v. Valiquett, 292 Mich. 1, 289 N.W. 306; Orgegon & Western Colonization Co. v. Johnson, 164 Or. 517, 102 P.2d 928; Russell v. Douget, La.App., 171 So. 501; Kniefel v. Keller, 207 Minn. 109, 290 N.W. 218; International Harvester Co. v. Young, 288 Mich. 436, 285 N.W. 12; Federal Land Bank of St. Paul v. Koslofsky, 67 N.D. 322, 271 N.W. 907; May v. Whitbeck, 111 Mont. 568, 113 P.2d 332; Federal Land Bank of Columbia v. Blackshear Bank, 182 Ga. 657, 186 S.E. 724.'

The record discloses that the defendant in 1934 was due the plaintiff the sum of $5,296.67 and the amount was secured by a mortgage. The defendant obtained a loan in the sum of $3,840 from the Federal Land Bank and secured its payment on the same property. The defendant, after obtaining the loan from the Federal Land Bank, gave plaintiff his note for the difference and secured its payment by the assignment of rents due under a lease in which the defendant was the payee. Some $600 was paid on the note sued upon when defendant lost the mortgaged property by foreclosure and failed to make additional payments, when the present suit was filed. Counsel for defendant contends that when plaintiff accepted from the Federal Land Bank the sum of $3,840 and sent its duly signed cancellation of the debt...