General Capital Corp. v. Tel Service Co., 4990

• Decision Date: 16 February 1966
• Docket Number: No. 4990,4990
• Citation: 183 So.2d 1
• Parties: GENERAL CAPITAL CORPORATION, a Florida corporation, Appellant, v. TEL SERVICE CO., Inc., a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

Page 1

183 So.2d 1

GENERAL CAPITAL CORPORATION, a Florida corporation, Appellant, v. TEL SERVICE CO., Inc., a Florida corporation, Appellee.

No. 4990.

District Court of Appeal of Florida, Second District.

Feb. 16, 1966.

Wm. Reece Smith, Jr., of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, Tampa, for appellant.

William B. Holland, Winter Haven, and Henry M. Sinclair, Miami, for appellee.

PER CURIAM.

Appellant General Capital Corporation, the defendant below, appealed from a final decree in favor of Appellee Tel Service Co., Inc., the plaintiff below.

Tel Service's complaint alleged that the parties entered into a written agreement dated August 13, 1959, later amended. The agreement provided that the plaintiff would sell to the defendant, at a discount, the accounts receivable and commercial paper from plaintiff's sales; that the plaintiff would endorse all paper transferred with recourse; and that it was plaintiff's obligation to repurchase defaulted items. The agreement was accompanied by personal guaranties of plaintiff's stockholders and officers, plus real estate mortgages by its president and his wife as security for the performance of the agreement. The complaint further charged that the facts alleged were part of a scheme to circumvent the usury laws in that instead of entering into an agreed seller-purchaser relationship the parties actually created a borrower-lender relationship under which plaintiff borrowed from the defendant $568,705.73, from August, 1959, through March, 1962. The complaint further alleged that the defendant wilfully and knowingly charged and accepted $125,267.82 as interest thereon, being more than 25% per annum, and that the plaintiff had assigned to the defendant accounts receivable and commercial paper having a total face value of $831,040.61, part of which had been repurchased by plaintiff. The complaint then alleged that the entire amount, which plaintiff claimed to be principal and interest, should be forfeited and the guaranties and mortgages returned. Defendant, in answering, denied the alleged scheme and stated that the transactions were actually the sale and purchase of commercial paper as agreed, and averred that the only lending transaction between the parties was a chattel mortgage loan of $12,500.00, upon which there was a balance due of $8,608.29, plus interest. The defendant also counterclaimed, seeking an accounting for collections made by plaintiff on items sold to defendant and a foreclosure on the chattel mortgage loan. In reply to this counterclaim plaintiff reiterated the alleged scheme to evade the usury laws and asserted a set-off in excess of the counterclaim. The defendant submitted an amendment to the answer which contained a third defense of unclean hands, a fourth defense of estoppel, a fifth defense of laches, and a sixth defense of the statute of limitations as to all items consummated prior to April 10, 1960.

After taking...