Baywood Furniture Mart, Inc. v. Kennedy, 73--680

• Decision Date: 05 June 1974
• Docket Number: No. 73--680,73--680
• Citation: 295 So.2d 350
• Parties: BAYWOOD FURNITURE MART, INC., et al., Appellants, v. Lee KENNEDY, Appellee.
• Court: Florida District Court of Appeals

Page 350

295 So.2d 350

BAYWOOD FURNITURE MART, INC., et al., Appellants, v. Lee KENNEDY, Appellee.

No. 73--680.

District Court of Appeal of Florida, Second District.

June 5, 1974.

Rehearing Denied June 28, 1974.

Richard T. Bennison of MacKenzie, Castagna, Bennison & Gardner, Clearwater, for appellants.

Douglas J. Loeffler of Fox, Burton, George & Loeffler, Clearwater, for appellee.

GRIMES, Judge.

This is an appeal from a final judgment of mortgage foreclosure.

By contract dated January 2, 1970, appellant, Alstan Bay Corp., agreed to purchase from appellee, Lee Kennedy, all of the outstanding stock of Baywood Furniture Mart, Inc. (hereafter called company). The contract noted that the purchase price of $153,000.00 was predicated upon a net worth of $110,129.00 as shown by the October 31, 1969, balance sheet of the company and an additional sum of $42,871.00 representing and agreed upon appreciated value of the real estate over that reflected on the balance sheet. Of the total price, $42,871.00 was to be paid in cash and the deferred balance was to be evidenced by a promissory note calling for ten equal annual principal payments plus quarterly payments of interest. The note was required to be endorsed by Alstan's owner, the appellant, A. James Dickerson, Jr., and secured by a mortgage on the company's real estate.

The contract further provided:

'2. * * *

(b) The purchase price aforementioned is based on the financial statement of Company dated October 31, 1969, and should there by any change in the aforesaid statement at the time of execution of this Agreement or should there be any change in the financial condition of Seller as shown by financial statements as of December 31, 1969, or due to inventories as hereinafter provided, or due to any other material changes in condition of Company, then the price and said promissory note shall be adjusted accordingly. In addition, in computing said purchase price all accounts receivable shall remain the responsibility of Seller as to their collectability and Seller does hereby warrant said accounts receivable, it being provided that Purchaser shall collect said accounts receivable and at such time as Purchaser determines that any of said accounts receivable shall be uncollectable Purchaser shall assign back to Seller said accounts receivable and the aforementioned promissory note shall be adjusted accordingly.

(c) The closing on this transaction shall be as of January 1, 1970. The aforementioned promissory note shall be executed at that time. In the event adjustments shall be necessary as stated above and below Purchaser shall execute a new adjusted promissory note which shall be exchanged for the previous one so delivered.'

The purchaser conducted a physical inventory of the company and took possession early in 1970. Thereafter, there were several discussions between Kennedy and Dickerson concerning possible adjustments to the purchase price. For reasons not entirely clear, the stock certificates were not turned over to Dickson until sometime in 1973. in the meantime, the purchaser refused to make any payments on the note.

At the conclusion of the hearing, the judge ordered the mortgage foreclosed but declined to accelerate the note because he felt it would be inequitable to do so when the seller had so long delayed the delivery of the stock of the company. A judgment was entered for the amount of principal and interest which had accrued upon the note to date (less a $7,400.04 credit for accounts receivable deemed uncollectible). Kennedy does not complain of the failure to accelerate the note.

Appellants first contend that no judgment whatsoever should have been entered because of the failure of Kennedy to promptly turn over the stock certificates. While it is true that these certificates were evidence of the ownership of the company, it is also true that Dickerson and his corporation took over and maintained complete possession and control of the company following the purchase. Appellants were not hampered or prejudiced by reason of not having the certificates, and the court properly held that this could not exonerate them from their obligations under the note.

The credit against the judgment was for three accounts receivable which had been assigned in writing by appellants to Kennedy. The court declined to give a further credit of $8,825.03 for some additional accounts receivable which were said to be uncollectible but which appellants had refused to assign. Likewise, the court refused to give credit for expenses totalling.$9,111.51...