Macina v. Magurno

• Decision Date: 14 February 1958
• Parties: Alfred MACINA and John Follo, trading and d/b/a Court Square Auto Parts, Appellants, v. James F. MAGURNO and Elsie A. Magurno, his wife, Appellees.
• Court: Florida Supreme Court

Page 369

100 So.2d 369

Alfred MACINA and John Follo, trading and d/b/a Court Square Auto Parts, Appellants, v. James F. MAGURNO and Elsie A. Magurno, his wife, Appellees.

Supreme Court of Florida.

Feb. 14, 1958.

William J. Castagna, Clearwater, for appellants.

Victor O. Wehle of Askew, Wehle, Earle & Holley, St. Petersburg, for appellees.

O'CONNELL, Justice.

Appellants, Alfred Macina and John Follo, doing business as Court Square Auto Parts, were defendants in the trial court, and James F. Magurno and Elsie A. Magurno, appellees here, were plaintiffs.

The suit was for specific performance of a provision, regarding rent payments, contained in a five year lease executed by the parties in August 1950. The lease was effective November 1, 1950. The plaintiffs were lessors, the defendants lessees. Defendants operated an automobile parts supply business and a machine shop in the leased premises.

The lease provided that lessees would make minimum monthly rent payments in amount of $160 and at the end of each year that:

'* * * Lessees, at their expense, shall furnish to Lessors a complete audit by a reputable Certified Public Accountant showing the gross amount of sales made by Lessees during the preceding rental year in the business conducted by Lessees on the above described premises, * * *' (Emphasis supplied) and if the audit revealed that 4 1/2% per cent of the said gross sales in any such year exceeded the monthly rental payments, that Lessees would pay the difference as additional rent. The construction of the italicized portion of the above lease provision is the principal bone of contention between the parties to the suit.

The plaintiffs' complaint in effect was that although defendants had paid the monthly rental payments and had also paid some additional monies, that defendants had failed to furnish annually 'a complete audit by a reputable certified public accountant showing the gross amount of sales' as required by the lease, and that they believed such an audit would show they were entitled to substantial additional sums for rent under the percentage provision of the lease. The plaintiffs asked the court to require the defendants to provide such an audit and to pay any additional sums found to be due.

In their answer, among other things, the defendants denied that they had failed to provide annual audits as required by the lease, alleged that they had furnished annual audits for the years 1951, 1952, 1953 and 1954, prepared by reputable certified public accountants or by a tax consultant specifically approved by the plaintiffs, and that the audit for 1955 was not yet due. They alleged that plaintiffs had in fact established the amounts due them for rent and had accepted payment thereof without question.

The defendants also asserted, as affirmative defenses, that by accepting the annual audits presented to them by defendants without expressing any dissatisfaction prior to filing of the instant suit and by accepting from defendants the sums shown to be due by said audits:

(1) Plaintiffs had waived and abandoned strict compliance with the lease provisions and therefore in equity were estopped from asserting any further claim;

(2) Plaintiffs were guilty of laches in presenting their claims; and

(3) Defendants having made payments to plaintiffs in good faith based on said audits, and plaintiffs having accepted such payments in full and complete settlement of rent due plaintiffs by their acceptance were estopped to assert any further claim.

To their answer, defendants attached what they contend is an audit made by a Certified Public Accountant, covering the entire four year period. This audit on its face was only an addition, by the Certified Public Accountant, of all defendants' sales tickets for the four years, together with a schedule of missing sales tickets which the C.P.A. presumed to have been mutilated and voided.

Defendants made a motion for summary final decree on the theory that the relief sought by plaintiffs, i. e., an audit, had been made and was attached to the answer, and that since all sums due under the audit had been paid, there was no issue to be decided by the court. The plaintiffs filed no affidavits in opposition to the defendants' motion.

Depositions of one of the plaintiffs and one of the defendants were before the court when the motion for summary final decree came on to be heard by the chancellor.

In his 'opinion and order' entered after the hearing, the court denied the defendants' motion for summary final decree, found that the audit furnished by the defendants was not '* * * a complete audit * * * showing the gross amount of sales made by lessees * * *' as required by the lease, found that there was '* * * no material issue as to the insufficiency of the audit in the mind of the court * * *' and directed defendants to furnish plaintiffs a '* * * complete audit of their business for the years in question * * * which audit will show, among other things, the gross amount of sales for the years indicated * * *' In his order, the Chancellor did not dispose of the defendants' affirmative defenses.

It is the foregoing order from which this appeal is taken.

Defendants contend (1) that since plaintiffs filed no affidavits controverting or in opposition to their motion and affidavit, there was no genuine issue of material fact and therefore their motion for summary decree should have been granted; (2) the Chancellor erred in construing as he did the lease provision as to the audit; (3) the Chancellor erred in entering sua sponte a final decree for plaintiffs without taking testimony or giving defendants the opportunity to be heard on their direct and affirmative defenses: and (4) that the order of the Chancellor was so vague, ambiguous and uncertain that it was impossible of compliance. This last point need not be treated by us as will become obvious from the remainder of this opinion.

As to the defendants' first contention, we agree with the Chancellor that defendants were not entitled to a summary final decree as a matter of law on the basis of the record as then before the Chancellor. It is true that if it be conceded that the audit furnished by defendants complies with the lease, and it not being denied that plaintiffs have been paid all sums shown to be due by the audit furnished by them, not only would there have been no genuine...