Fugazy Travel Bureau, Inc. v. State by Dickinson

• Decision Date: 20 July 1966
• Docket Number: No. 695,695
• Citation: 188 So.2d 842
• Parties: FUGAZY TRAVEL BUREAU, INC., Otto Marx, Jr., William Fugazy and Louis Fugazy, Appellants, v. STATE of Florida, by Fred O. DICKINSON, Jr., Comptroller, Earl Faircloth, Attorney General and Broward Williams, State Treasurer, as and constituting the Florida Securities Commission, et al., Appellees.
• Court: Florida District Court of Appeals

Page 842

188 So.2d 842

FUGAZY TRAVEL BUREAU, INC., Otto Marx, Jr., William Fugazy and Louis Fugazy, Appellants, v. STATE of Florida, by Fred O. DICKINSON, Jr., Comptroller, Earl Faircloth, Attorney General and Broward Williams, State Treasurer, as and constituting the Florida Securities Commission, et al., Appellees.

No. 695.

District Court of Appeal of Florida, Fourth District.

July 20, 1966.

John M. McCarty, Ft. Pierce, and Richard S. Banick, of Fowler, White, Gillen, Humkey & Trenam, Miami, for appellants.

John W. Prunty and Michael C. Slotnick, of the Law Office of John W. Prunty, Miami, for appellees Krock and Muscat.

Robert J. Randolph Stuart for appellee-stockholders R. C. Fernon et al.

ANDREWS, Judge.

This is an interlocutory appeal by Fugazy Travel Bureau, Inc., Otto Marx, Jr., William Fugazy and Louis Fugazy, hereinafter referred to as 'Fugazy' from an order setting aside the court's approval of a settlement agreement between appellants and the court-appointed receiver of Tower Credit Corporation. The order approved the proposal of appellees, Edward Krock and Victor Muscat, to purchase the receivership asset which was the subject of the settlement agreement.

Fugazy is indebted to Tower Credit Corporation in the amount of $900,000 represented by a promissory note. Tower Credit Corporation is in receivership, Robert Stone being the receiver. Fugazy has pending a suit against Tower Credit Corporation in the United States District Court, Southern District of New York, and also a suit involving the same subject matter against the accounting firm of Ernst & Ernst. Fugazy offered the receiver a new note due in thirty months in the amount of $150,000 for said $900,000 note, agreed to terminate its suit in New York, and to assign to the receiver its claim against Ernst & Ernst. Marx agreed to endorse the new note and arrange to have said note purchased from the receiver at par within thirty days after closing An agreement to this effect was reduced to writing and approved by the court on March 22, 1966.

On March 28th Krock and Muscat offered the receiver $200,000 for said note. Certain stockholders intervened objecting to the sale to Fugazy. The court held a hearing Without notice to Fugazy and approved the proposed sale to Krock and Muscat, vacating the previous agreement on the ground that the offer of Krock and Muscat is of greater value and therefore is in the best interests of the shareholders and creditors of Tower Credit Corporation.

Appellants contend that the chancellor committed reversible error in two respects. Appellants' first contention is that the chancellor does not have the authority to annul and set aside the court-approved contract between themselves and the receiver solely upon the grounds that a subsequent offer was more lucrative. Appellants' second contention is that the order was void in that the court deprived appellants of valuable property rights without affording appellants notice and opportunity to be heard.

Decrees entered in chancery are subject to rehearing pursuant to Fla.R.C.P. 3.16, 31 F.S.A., and in addition at any time not later than ten days after the entry of the decree the court of its own initiative may order a rehearing or enter a new or amended decree for any reason for which it might have granted a rehearing or entered a new or amended decree on the motion of a party.

The effect of this rule is to put the world on notice that at any time within ten days after the entry of a decree by a court of equity in Florida the court may, on petition for rehearing or on its own initiative, order a rehearing or enter a new or amended decree. Any person that acts in reliance upon such a decree within that time does so at this own peril. Until the expiration of the time for rehearing the court has the right and, upon a showing of proper facts, the duty to either grant a rehearing or enter a new or amended decree. Within the time for rehearing it cannot be said as appellant contends that there existed a contract duly authorized by the court.

The principle of law that contracts duly authorized by the court cannot be annulled or revoked by the court except on the same conditions as are applicable to the breach of agreements by private individuals do not come into play. It was not necessary therefore for the court to have facts establishing any of...