Bilgore v. Gunn, Et Ux.

CHAPMAN, J.: There is challenged on this appeal a final decree entered by the Circuit Court of Pinellas County, Florida, cancelling as void ab initio and contrary to public policy a note secured by a crop lien from C. T. Gunn and Susanna C. Gunn, his wife, to David Bilgore & Company, Inc., due one year after date. Payments were made thereon from time to time, and a renewal had, when a note for the sum of $5,079.44 was given maturing four years after date, and subsequent thereto payments were made thereon. Prior to the giving of the cancelled note, C. T. Gunn applied to and obtained a commitment from the Federal Land Bank for a loan of approximately $13,000.00 with which to pay his indebtedness then due the David Bilgore Company, Inc. The loan was closed and David Bilgore Company, Inc., received the proceeds thereof, but it was insufficient in amount to liquidate the entire indebtedness due. After the loan was closed, Gunn gave David Bilgore Company, Inc., a note for the amount remaining due after crediting the amount received from the Federal Land Bank to the Gunn account. *801 Presented to the Federal Land Bank of Columbia was a written statement setting out the indebtedness due by Gunn to David Bilgore & Company, Inc., The statement of the indebtedness was a part of the original application for the loan. The statement was dated April 13, 1933, when the total indebtedness was represented to the Federal Land Bank as being in the sum of $10,390.25. This statement, being a part of the application for the loan, was considered by the bank in reaching a conclusion, or was one of the inducements to it for making the commitment to Gunn and Bilgore & Company, ultimately resulting in the loan, which was closed early in January 1934. On the vouchers issued by the Land Bank to Gunn and wife and David Bilgore & Company, Inc., in satisfaction of the Bilgore indebtedness, is the language viz: “In Payment of Proceeds of Loan No.-and Accepted in Full Settlement of the Following Amount” and “In Payment of Proceeds of Loan No.- and Accepted in Full Settlement of the Following: Amount.” David Bilgore & Company, Inc., and C. T. Gunn and Susanna Gunn, his wife, signed the foregoing statement. In many jurisdictions where the scale down agreements have been considered the holdings are uniform that such agreements are valid and binding on the parties on the theory that the Federal Land Bank desired to place its creditor in a sound financial position so that he could pay the amount of the mortgage to the bank at the maturity date. If notes are upheld when given in derogation of the scale down agreements, then the purpose of the Congressional Act authorizing the loan would be defeated. The debt under which the farmer was struggling would remain unchanged. It was the reduction of the farmer’s debts *802 that was desired so that he might make a success of his business. If creditors were permitted to disregard or ignore the debt reduction agreement and accept notes for the balance due on the old debts, then the farmer would be in no better position than he had been prior to the time the bank came to his assistance with the loan. It was in legal effect and accord and satisfaction of the entire indebtedness of the farmer. See O’Neil v. Johnson, 29 Fed. Supp. 307, Geel v. Valiquett, 292 Mich. 1, 289 N. W. 306; Oregon & Western Colonization Co. v. Johnson, 164 Ore. 517, 102 Pac. (2nd) 928; Russell v. Douget, (La.), 171 So. 501; Kniefel v. Keller, 207 Minn. 109, 290 N. W. 218; International Harvester Co. v. Young, 288 Mich. 436, 285 N. W. 12; Federal Land Bank of St. Paul v. Koslofsky, 67 N. D. 322, 271 N. W. 907; May v. Whitbeck, 111 Mont. 568, 113 Pac. (2nd) 332; Federal Land Bank of Columbia v. Blackshear Bank, 182 Ga. 657, 186 S. E. 724. The appellant contends that the bank was not misled by Bilgore’s action and that it had notice, or by diligence could have acquired knowledge of the “oral carry over” between Gunn and Bilgore; and that no concealment existed, and no fraud was perpetrated upon the bank. Thé answer to these several contentions is that the terms of the Congressional Act prohibits these “shake down” or oral “carry over” agreements and they are unenforceable and fraudulent. One of the plaintiffs, C. T. Gunn, disabled by illness, by power óf attorney authorized his daughter to maintain the suit at bar. Under the circumstances here presented she is lawfully authorized so to do. The final decree cancelled the note and adjudicated the balance due by the appellant to the appellee. The *803 figures do not appear in the record, nor is it contended that this provision of the final decree is erroneous. There exists a presumption of the correctness of the rulings of the lower court. The decree is without error and accordingly is hereby affirmed. The decree is without error and accordingly is hereby affirmed. BROWN, C. J., TERRELL, and THOMAS, JJ., concur.