Knabb v. Reconstruction Finance Corp.

• Decision Date: 30 July 1940
• Citation: 144 Fla. 110,197 So. 707
• Parties: KNABB v. RECONSTRUCTION FINANCE CORPORATION.
• Court: Florida Supreme Court

197 So. 707

144 Fla. 110

KNABB v. RECONSTRUCTION FINANCE CORPORATION.

Florida Supreme Court

July 30, 1940

Rehearing Denied Sept. 17, 1940.

Error to Circuit Court, Duval County; Bayard B. Shields, Judge.

Action by the Reconstruction Finance Corporation, a corporation organized and existing under the laws of the United States of America, against L. Knabb, otherwise known as Lucius Knabb to recover on notes executed by defendant. To review an adverse judgment, defendant brings error.

Affirmed.

CHAPMAN J., dissenting.

COUNSEL

H. L. Anderson, of Jacksonville, for plaintiff in error.

Stockton Ulmer & Murchison and Hutchinson I. Cone, Jr., all of Jacksonville, for defendant in error.

OPINION

BUFORD Justice.

To a judgment on promissory notes defendant took writ of error and the case is before us for review.

After consideration of the record and briefs in the light of oral argument at the bar of the Court, we are of the opinion that the material questions for our determination, four in number, are properly stated by the defendant in error and that these questions cover the points sought to be presented by plaintiff in error in seven questions.

The four questions are:

1. 'When a final judgment by default is entered against a defendant for failure to plead, and defendant moves to vacate the default and, in support of such motion, tenders a plea upon which he offers to go to trial immediately, and the trial court vacates the default on the condition that defendant go to trial on such plea as soon as a trial date can be had, and the trial is finally held six months after the default was vacated--under such circumstances is the trial court justified, in the exercise of its discretion, in refusing to permit defendant to file additional pleas at the trial, after plaintiff's case in chief has been closed, and after defendant has started putting on his own testimony?'

2. 'On the trial of a suit brought by a transferee on a promissory note against the maker, where the endorsement is not denied, and plaintiff produces the note, together with evidence (which is not denied) that the note was transferred to plaintiff by the payee as collateral security, and that plaintiff holds possession of the note as such pledgee (there being no claim made by plaintiff that it is a holder in due course), is not plaintiff entitled to maintain the action without proof of actual endorsement of the note?'

3. 'In an action on a promissory note, when plaintiff in its case in chief introduces in evidence a complete written contract by the terms of which the note was described and delivered, is not the defendant precluded, under the parol evidence rule, from attempting to prove, by conversations and letters prior in time to the written contract, that the subject matter of the agreement was different from that stated in the written contract?'

4. 'In a suit on a promissory note, when there is no dispute as to the amount due, and the interest is merely a matter of mathematical computation and the plaintiff and defendant stipulate as to the amount of attorney's fees, is it not proper for the trial court to direct the jury with reference to the amount of the verdict?'

Plaintiff below, Reconstruction Finance Corporation, instituted the suit to recover on three promissory notes executed by defendant Knabb. One of the notes was then past due and maturity of the other two was accelerated in accordance with the terms of the notes. Suit was instituted on October 31, 1938. Knabb was served with process returnable to the December Rule Day, on which day declaration was filed by the plaintiff. On the same day Knabb filed his appearance. He failed to plead. On the January, 1939, Rule Day default was entered against Knabb. On the 17th day of January, 1939, final judgment was entered by the court pursuant to default.

On January 23, 1939, defendant filed his motion to set aside and vacate the default and final judgment. On the same day the court entered its order as follows:

'This cause coming on to be heard this day on motion of the defendant to vacate and set aside the default and final judgment heretofore entered against him in this cause, and having tendered to the Court a plea and motion setting forth his reason why said plea was not filed in due course, and having further offered to go to trial upon said plea immediately or as soon as the Court can hear the trial of said cause, and it appearing to the court that said default and judgment should be set aside, although the court has not passed upon the legal sufficiency of the plea presented, and the Court being advised in the premises, it is therefore, ordered that said motion be and the same is hereby granted and said default and final judgment entered against said defendant be and the same is hereby vacated and set aside.

'It is further ordered that the plaintiff be and it hereby is authorized and permitted to withdraw from the files the original promissory notes sued upon and filed at the entry of the final judgment herein.

'Done and ordered in Chambers at Jacksonville, Duval County, Florida, this 23rd day of January, 1939.'

The plea tendered and allowed to be filed was:

'That the sole and only consideration for the making and delivery of each of the three promissory notes, which defendant is sued for, wholly failed before this action was begun, in this:

'On or about the 15th day of July, 1936, the plaintiff made and entered into a verbal contract and agreement with the defendant to sell to the defendant a certain tract of land situated in Baker County, Florida, known as the Chicago Trust Company's land, for Fifteen Thousand Dollars, said purchase money to be paid by the defendant as follows: Three Thousand Dollars cash, and the balance to be evidenced by four promissory notes to be made by the defendant and delivered to the plaintiff, and each of said four promissory notes to be in the principal sum of Three Thousand Dollars each, carrying interest at the rate of five per cent per annum after maturity until paid, the interest to be paid annually on all four promissory notes; the first of said promissory notes was to become due and payable one year from and after July 15, 1936; the second of said promissory notes to become due and payable by its terms, July 15th 1938; the third of said promissory notes to become due by its terms July 15th 1939, and the last of said four promissory notes to become due and payable on the 15th day of July, 1940.

'Defendant further says that the plaintiff at various times before July, 1936, represented to the defendant that the plaintiff then held title to said lands by conveyance from Central Republic Bank & Trust Company, and that the plaintiff owned and was in position to sell and convey said lands to the defendant, and would sell said lands to the defendant for the sum of Fifteen Thousand Dollars upon the terms herein set forth, and would convey the said lands to the defendant freed of all liens excepting certain unpaid taxes, by a good and sufficient deed of conveyance to be delivered to defendant when the balance of the purchase money had been paid by the defendant to the plaintiff.

'Defendant further avers it to be true that as a part of the oral contract so made and agreed upon by the plaintiff, and the defendant, for the sale by the plaintiff to the defendant, the plaintiff agreed and promised defendant that it would make and deliver to the defendant, a good and sufficient executory contract in writing, which would set forth the sale of said lands by the plaintiff to the defendant, and the purchase of the same by the defendant at the price and upon the conditions herein set out, and would within a reasonable time after the 15th day of July, 1936 deliver said executory contract in writing to the defendant. The defendant further says that afterwards, the plaintiff caused to be prepared certain documents and transmitted said documents to the defendant, but the defendant says that the written instrument so prepared and sent to the defendant by the plaintiff did not set out the true contract between the plaintiff and the defendant for the sale and purchase of said tract of land, but purported on the face thereof, a contract on the part of the plaintiff to sell to the defendant, one or more worthless promissory notes made by the Central Republic Bank & Trust Company, a banking corporation, formerly doing business in the City of Chicago, Illinois, and then held by the plaintiff as collateral for certain indebtedness which the plaintiff claimed against said Central Bank & Trust Company, and did not contain a promise of the plaintiff to convey said lands to the defendant and when the defendant discovered that the plaintiff had not kept its promise to deliver to the defendant a valid contract in writing whereby the plaintiff bound itself to convey to the defendant title to the lands aforesaid, the defendant protested and made demand upon the plaintiff that it perform its contract and deliver a good and sufficient contract in writing which would bind the plaintiff to convey title to the said lands to the defendant when defendant had completed payment of the said purchase money, with interest; that when the defendant discovered that the plaintiff had failed and omitted to make and deliver to the defendant a valid contract to convey to the defendant the title to the lands aforesaid, the defendant had already paid to the plaintiff Three Thousand Dollars in cash on or about July 15th 1936, and had paid the first of said series of promissory notes which matured July 15th 1937, together with interest upon the whole balance of said purchase money, but the defendant refused to pay the second of said promissory notes, which matured July 15th 1938,...