ROMEO DUBE, ET AL., APPELLANTS,
v.
JUSTO PUENTE DE LA VEGA, ET AL., APPELLEES
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The court reversed a judgment denying relief to promissory note holders who sought to collect on a note and escrow deposit from business purchasers. The court held that while partial failure of consideration is a valid defense to note enforcement, the defendants failed to present evidence of actual damages, precluding them from offsetting the debt.
Partial failure of consideration is a valid affirmative defense to enforcement of a promissory note, but it is pro tanto only—meaning it can only offset the debt to the extent of proven damages. Since appellees presented no evidence of damages resulting from the alleged breach, they could not use the defense to deny appellants recovery on either the note or the escrow deposit.
[1] Partial failure of consideration is an affirmative defense to the enforcement of a promissory note and must be pleaded and proved by the defendant.
[2] A party asserting partial failure of consideration as a defense to a promissory note must present evidence of damages suffered as a direct result of the breach.
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Join FLexlaw to unlock all legal intelligence“Partial failure of consideration is a defense pro tanto to enforcement of a promissory note by one not a holder in due course.”
Establishes that partial failure of consideration is a valid defense but only to the extent of actual damages (pro tanto).
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Join FLexlaw to unlock all legal intelligenceAppellants sold a business to appellees and received a promissory note and escrow deposit as part of the purchase price. Appellees claimed partial fai…
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ORFINGER, Judge.
We reverse the judgment which denied relief to appellants in their action to collect an unpaid promissory note executed by appellees and an escrow deposit which were both part of the purchase price for a business purchased by appellees from appellants. Although the appellees presented evidence to support their claim that there had been a partial failure of consideration, there was no evidence presented by them as to any expense or other damage suffered by them as a direct result of such breach. Partial failure of consideration is a defense pro tanto to enforcement of a promissory note by one not a holder in due course. § 673.408, Fla.Stat. (1985), Mullan v. Bank of Pasco County, 101 Fla. 1097, 133 So. 323 (1931), and it is an affirmative defense to be pleaded and proved by the defendant. Holm v. Woodworth, 271 So. 2d 167 (Fla. 4th DCA 1972). Without some evidence that damage resulted from said claimed nonperformance, there was nothing to offset and it was error to deny recovery on the promissory note.
The same reasoning applies to the initial deposit paid by the buyer as part of the purchase price and held in escrow by the closing attorney. There was nothing in the contract that would indicate the disposition of this deposit in the event of a partial breach of conditions which were to be performed after the transaction was closed. Although the buyer would be entitled to recovery for any damages caused by the seller’s failure to perform these conditions, the buyer must still prove some damage before he is entitled to recover. Here, the appellees presented no such evidence and thus the appellant was entitled to the $1,000 deposit.
REVERSED.
UPCHURCH, C.J., and COWART, J., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Mullan v. Bank of Pasco Cnty., 101 Fla. 1097 (Fla. 1931)
- Holm v. Woodworth, 271 So. 2d 167 (Fla. 4th DCA 1972)