Greenfield v. Millman (111 So. 2d 480, 1959)

STANLEY MILLEDGE, Associate Judge.

Pearl Millman brought an action at law against Leo Greenfield, on the latter’s contract of guaranty originally executed to ap-pellee and her husband, since deceased. The defendant pleaded both the want and failure of consideration. A jury was 'waived and the court found that the evidence did not support the defenses. There was no controversy over the plaintiff’s loss. Judgment of $24,429.69, together with interest and costs, was entered for plaintiff and this appeal followed.

The defendant, a practicing lawyer, represented Samuel Lew, who was the vendee under a contract to buy the Lynmar Hotel from Lynmar Hotel, Inc., subject to two existing mortgages. A purchase money mortgage was executed to secure notes of $5,256.22 and $21,024.87, representing the proportionate stock interest in the vendor corporation held by the Millmans and by Murray Weiner. At the first phase of closing the transaction, the Millmans, but not Weiner, agreed orally to some sort of subordination arrangement to permit refinancing 'the first and second mortgages, which had uncomfortably early maturity dates.

At the second phase of the closing, Mr. Greenfield presented a subordination agreement prepared by him, to which Mr. Mill-man objected as being something other than his oral agreement to subordinate, and which he refused to sign. Greenfield insisted that he had to have the agreement. Mill-man told Greenfield that he would sign the subordination agreement if Greenfield would personally guarantee the payment. Greenfield then dictated to Mrs. Millman the guaranty agreement sued on. She typed it. Greenfield and the Millmans then executed and delivered both instruments.

The Millmans were never called on to subordinate this mortgage to new mortgages given to refinance the existing first and second mortgages and no subordination was ever actually made. In his brief, Greenfield contends: (1) the guaranty agreement is without consideration because by it the Millmans promised to do something to which they were already bound by prior contract; (2) that the instrument was only a conditional offer to guarantee which never went into effect because the events upon which the promise was conditioned never occurred; and (3) that because these events never transpired there was an absence of consideration.

The trial court obviously found from the evidence, as it was warranted in doing, •that.the agreement to subordinate committed the Millmans to things which they had not previously promised to do. His original promise required that the third mortgage be reduced to $15,000; that the first and second mortgages be consolidated; and the original agreement was silent as to increase in interest rates. The instrument signed by the Millmans required only the payment of Weiner’s note, contained no requirement of consolidation and permitted a very substantial increase in the interest rates on the refinancing mortgages. Restatement of Contracts, § 84, puts the applicable rule of law this way:

“Consideration is not insufficient because of the fact