SANFORD BACON, AS TRUSTEE FOR MARVIN M. BACON, MARVIN M. BACON, CESTUI QUE TRUST, AND E. C. FREDERICKSON, A/K/A ELLEN C. SIMONS, APPELLANTS,
v.
ELI R. CRESPI, APPELLEE
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The court reversed a dismissal of a declaratory judgment action regarding a stockholders' agreement, holding that parties may seek judicial declaration of their rights under a contract even when the contract language is facially clear and unambiguous, if extrinsic facts create doubt about the contract's application.
The appellants are entitled to a judicial declaration of their rights under the stockholders' agreement. The court held that the mere fact that a contract is clear and unambiguous on its face does not prevent a party from seeking declaratory relief where extrinsic facts would affect the application of the written agreement's language.
“The right to utilize our declaratory decree statute does not depend upon the existence of an actual controversy but depends upon whether or not the movant shows that he is in doubt as to the existence or non-existence of some right, status, immunity, power or privilege, that he is entitled to have such doubt removed, and, if circumstances warrant it, obtain appropriate and necessary relief.”
Establishes the standard for entitlement to declaratory relief under Florida law, focusing on the movant's doubt rather than the clarity of the underlying instrument
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Join FLexlaw to unlock all legal intelligenceThree appellants and appellee Crespi each owned stock in Crespi Rambler, Inc., and entered into a written stockholders' agreement on December 27, 1960…
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This is an appeal from a decree dismissing plaintiffs’ complaint which sought *824a declaration of plaintiffs’ rights pursuant to Chapter 87, of the Florida Statutes, F.S. A., with respect to a certain contract entered into by the parties. The court in granting the motion to dismiss and entering the decree of dismissal found “that the plaintiffs are not entitled to a declaration of their rights, since the provisions of the subject contract that the plaintiffs want construed are clear and unambiguous.”
We find that the court was in error in finding that the plaintiffs were not entitled to a declaration of their rights.
The salient facts are as follows: The appellee and the appellant-trustee each own 1714 shares of the capital stock of Crespi Rambler, Inc. The appellant, E. C. Fred-erickson, owns 15 shares of such stock. On or about December 27, 1960, the appellants and the appellee entered into a written stockholders’ agreement which provides in part as follows:
“If any of the parties hereto shall desire to buy the stock owned by any other party to this Agreement, or any successor thereof, he shall give written notice of such intention to the other stockholder by certified mail, return receipt requested, and such notice shall contain the purchase price for the stock and the terms of the offer. Any offer to buy must include all of the stock owned by the offerees. The offerees shall have thirty days within which to accept or reject said offer. In the event the said offer is rejected, the of-feree shall have the right to counteroffer to purchase all of the stock owned by the original offerer at the same price and upon the same terms set forth in the original offer. In the event the recipient of the original offer to purchase exercises the right granted him by the sub-paragraph, to-wit: the right to counter-offer to purchase at the same price and upon the same terms; then and in that event, the original offering stockholder must sell to the recipient of the original offer at the same price and upon the same terms stated in the original offer to purchase.”
On April 20, 1961, or thereabouts, ap-pellee orally offered to purchase all of the appellants’ stock interest in Crespi Rambler, Inc., for a total consideration of $10,000' cash. The appellants within 30 days refused the offer and exercised their alleged right to counter-offer by seeking to buy the appellee’s stock at the same price per share and upon the same terms as contained in the original offer by the appellee. The counter-offer was confirmed in writing by a letter sent by certified mail, return receipt requested.
The determinative question is whether one alleging to be in doubt as to its rights under a written instrument because of the effect of extrinsic facts on such instrument, is entitled to a declaration of rights even though the written instrument is clear and unambiguous on its face.
The Supreme Court in Rosenhouse v. 1950 Spring Term Grand Jury, Fla. 1952, 56 So.2d 445, set forth the rule which we find to be decisive in the case at bar. The court stated at page 447:
“ * * * The right to utilize our declaratory decree statute does not depend upon the existence of an actual controversy but depends upon whether or not the movant shows that he is in doubt as to the existence or non-existence of some right, status, immunity, power or privilege, that he is entitled to have such doubt removed, and, if circumstances warrant it, obtain appropriate and necessary relief. Ready v. Safeway Rock Co., 157 Fla. 27, 24 So.2d 808; Caldwell v. North, 157 Fla. 52, 24 So.2d 806.”
See also Jackson Tom, Inc. v. Carlton, Fla.App.1961, 133 So.2d 752; North Shore Realty Corporation v. Gallaher, Fla.App. 1957, 99 So.2d 255; Banyan Cafeterias, Inc., #3, v. The Faith Lutheran Church of Hialeah, Florida, Fla.App., 3rd District, 141 So.2d 5.
*825The mere fact that the contract is clear and unambiguous on its face does not prevent one from seeking a declaration of his rights under such contract where there exist extrinsic facts which would affect the clear and unambiguous language of the written agreement. Accord, Fraser v. Cohen, 1947, 159 Fla. 253, 31 So.2d 463, 467.
This opinion shall in no way be determinative of what rights or relief, if any, appellants are entitled to. We do no more than hold that the appellants are entitled to have a judicial declaration as to their rights in the instant case.
Reversed.
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State Farm Mut. Auto. Ins. Co. v. Couch, 167 So. 2d 786 (Fla. 3d DCA 1964)…al question -which appellants sought to have determined is a purely factual one, namely, whether or not Mary Yates was driving the automobile with the knowledge and consent of the owners, or either of them.” . Compare Bacon v. Crespi, Ma.App. 1962, 141 So. 2d 823, where this court said: “The mere fact that the contract is clear and unambiguous on its face does not prevent one from seeking a declaration of his rights under such contract where there exists extrinsic facts which would affect the clear and unamb…
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Johnson v. Atl. Nat'l Ins. Co., 155 So. 2d 886 (Fla. 3d DCA 1963)…ot show doubt as to some right, status, etc.; therefore, it cannot be authority for approving a declaratory decree in the instant case. For this same reason, we acknowledge and distinguish the opinion of this court in Bacon v. Crespi, Fla.App.1962, 141 So. 2d 823, which allowed a party to seek a declaration of his rights where extrinsic facts affected the clear language of a written agreement. Reversed with directions to dismiss the complaint.…
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The Travelers Indem. Co. v. Johnson, 201 So. 2d 705 (Fla. 1967)…strict Court of Appeal collided with decisions of the District Court of Appeal, Third District, in the cases of Millers Mutual Fire Insurance Co. of Texas v. American Fidelity Fire Ins. Co., [*706] 178 So. 2d 742 (Fla.App.1965), and Bacon v. Crespi, 141 So. 2d 823 (Fla.App.1962). Our study of the pronouncements of this court and of the Third District Court of Appeal leads us to the view that there is sufficient disharmony between the two decisions of the District Court on the one hand and Columbia, supra, on…
Previewing 3 of 8 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Ready v. Safeway Rock Co., 157 Fla. 27 (Fla. 1946)
- N. Shore Realty Corp. v. Gallaher, 99 So. 2d 255 (Fla. 3d DCA 1957)
- Millard Caldwell v. North, 157 Fla. 52 (Fla. 1946)
- Fraser v. SOL Cohen, 159 Fla. 253 (Fla. 1947)
- City OF N. Miami Beach v. Oska Realty Corp., 133 So. 2d 752 (Fla. 3d DCA 1961)
- Jackson TOM, Inc. v. Carlton, 133 So. 2d 752 (Fla. 1st DCA 1961)
- Banyan Cafeterias, Inc. v. The Faith Lutheran Church OF Hialeah, 141 So. 2d 5 (Fla. 3d DCA 1962)