Opinion
May 22, 1951.
Appeal from the Circuit Court, Dade County, Marshall C. Wiseheart, J.
Garland M. Budd and Loftin, Anderson, Scott, McCarthy Preston, all of Miami, for appellants.
Choate Sinclair, Miami, for appellee.
The appellee, payee of a promissory note signed by Lewis E. Bower and J.V. Knezevich, brought an action to enforce payment. While the cause was pending J.V. Knezevich died and Ann Knezevich as administratrix was substituted for him, but we shall, to simplify the opinion, use the titles "makers" and "appellants" interchangeably.
The note, secured by certain stock certificates, was payable in three installments and contained a provision that default in one would accelerate all. Upon failure of the makers to meet the first payment the payee elected to sue for the full amount and he was awarded a verdict at the direction of the court.
The relevant facts are simple. Miami Beach Terminal Company held a franchise from the Florida Railroad and Public Utilities Commission for the transportation of passengers between the city and Miami International Airport. The company, in order to improve its precarious financial condition, entered into a "management" agreement with the appellee whereby he got, in addition to what he already held, twenty-five per cent of its stock for $15,000 and became manager while J.V. Knezevich was retained as operator. At this point Selecman was owner of the controlling interest; Bower was president and minority stockholder; Knezevich was an employee. Shortly thereafter Selecman loaned the company about $13,000, again to bolster its finances.
Then appellee decided he wanted no more of the company so he proposed that the appellants give him a note in the sum of $37,300 for his stock and pay him $12,500 for the loan he had made. At first they demurred but eventually the deal was consummated and the note, subject matter of this case, was delivered.
It is very significant, to quote from appellant's brief, "that all parties, Selecman, Bower and Knezevich, knew * * * that the company was hopelessly insolvent unless it could procure from the state Railroad Commission an additional franchise * * * which might be operated at a profit."
The appellants contend that appellee represented that the Florida Railroad and Public Utilities Commission would issue a permit authorizing the company to carry passengers to and from various race tracks in Dade and Broward Counties. With this added revenue the fortunes of the company would be bettered. By this representation, so appellants insist, their original reluctance to buy appellee's interest was overcome.
This so-called "guarantee" that another permit would be granted by the commission is the pivotal factor in appellants' case. Bower, himself, testified that the sole and only consideration for the note was "Mr. Selecman's guarantee that he could get us the additional franchise" and that without it the stock was worth "not a nickel."
No fraud seems to have been committed by appellee on appellants. An examination of the classic definition of fraud shows that many if not all elements are absent. There was no misrepresentation of any past or existing fact. It is conceded that appellants were aware of the sorry condition of the company. Such being the case the appellee concealed nothing from them.
Assuming that the appellee made the rash statement that the commission would issue the permit, it was nothing more than a promise to exert himself to that end.
We see no need to explore the well settled law that agreements for control by individuals of business operations of government are void as against public policy, and we see no occasion to hold that the agreement, such as it was, amounted to a contract improperly to influence public officials. After all there is no attempt now to enforce it and so far as it is related to the note in controversy, it is of little consequence. The appellee knew, and the appellants knew as well as he, that he could not make an absolute promise to be fulfilled by the commission's exercise of a power in a certain way. It could have been, at the most, only an undertaking to assist the appellants in obtaining such a permit, and there is ample evidence that he did that.
The arrangement could not be held to violate public policy, and because of that to undermine the consideration for the note.
We think the circuit judge very properly granted the motion for the directed verdict and entered the judgment.
Affirmed.
SEBRING, C.J., and TERRELL and BARNS, JJ., concur.