Industrial Credit Co. v. Mike Bradford & Co., 65-48
| Decision Date | 27 July 1965 |
| Docket Number | No. 65-48,65-48 |
| Parties | INDUSTRIAL CREDIT COMPANY, Appellant, v. MIKE BRADFORD & CO., Inc., and Michael F. Bradford, Appellees. |
| Court | Florida District Court of Appeals |
Fleming, O'Bryan & Fleming and Norman C. Roettger, Ft. Lauderdale, for appellant.
Miller & Russell, Robert L. Achor, Miami, for appellees.
Before HENDRY, C. J., and CARROLL and SWANN, JJ.
This is an appeal by Industrial Credit Company from a summary final judgment entered by the trial court for Mike Bradford & Co., Inc. and Michael F. Bradford, individually.
On April 12, 1962, Mike Bradford & Co., Inc. executed a conditional sales contract with AAA Construction Equipment Co., Inc. for the purchase of certain construction equipment. Michael F. Bradford guaranteed the contract. On the same date, the conditional sales contract and installment note attached thereto were assigned by AAA to the appellant, a finance company. Payments were made under these instruments for approximately ten months.
The appellant and Bradford began negotiations for an extension agreement. Prior to the execution of the extension agreement it was known by all parties that only about one-half of the equipment in question had been delivered to Bradford because of some problems concerning title. The extension agreement executed on February 19, 1963, reducing the monthly payments, was personally guaranteed by Michael F. Bradford.
The balance of the equipment was never delivered, although demand was made, and upon failure of the parties to comply with the contract, appellant filed an action at law against the defendants for damages resulting from breach of the contract and for attorney's fees. A judgment by default was entered against AAA and its president and appellees' motion for summary judgment, based upon the complaint, answer and depositions was granted. The appellant has appealed the entry of the summary final judgment.
Appellant's position on appeal is that the extension agreement herein is the same as a renewal note and is therefore governed by Hurner v. Mutual Bankers Corporation, 1939, 140 Fla. 435, 191 So. 831, wherein the court stated:
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'The important question here presented is: May the maker of a renewal note interpose the defense of fraud against the payee of the note where there were fraudulent misrepresentations in procuring the original note, the same fraud being reiterated at the time of the giving of the renewal note; where the maker has had ample time to discover such fraud, by the exercise of ordinary diligence, prior to the giving of the renewal note.'
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This question was answered generally by a holding that the maker of a note waives the defense of fraud or false misrepresentations where he gives a renewal note with knowledge of the fraud or when by the exercise of ordinary diligence he could have discovered the fraud. $Appellee believes that the question to be decided is whether the appellant was so insulated in interest from AAA Construction Equipment Co., Inc. as to be a bona fide assignee for value immune from the defense of failure of consideration.
Appellee contends that this case is governed by Mutual Finance Co. v. Martin, Fla.1953, 63 So.2d 649, 44 A.L.R.2d 1, where an action was brought by a finance company on a conditional sales note. There, an appliance dealer, Highsmith, sold a deep freeze and a meat saw to a man named Martin. On the same day, the parties entered into a conditional sales agreement and Matin executed a promissory note attached to the said conditional sales agreement, said not being the principal sum of $1,405.68, the amount due on the equipment.
On the following day, the conditional sales agreement and promissory note were assigned and endorsed by Highsmith to Mutual Finance Company for the sum of $1,255.00. Subsequently, the purchaser refused to make full payment, stating that the freezers were not as represented. The finance company then brought suit and Martin answered, alleging, generally, failure of consideration and that the finance company was not a holder in due course. The Supreme Court of the State of Florida stated:
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'* * * 'Martin never obtained the deep freezer he bargained for, and, as against...
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