Wednesday, September 30, 2009

Payment Of Documentary Stamps Is Not A Prerequisite To Enforcement Of Promissory Note

In Glenn Wright Homes (Delray) LLC v. Lowy (4D08-1457), the Fourth DCA, sitting en banc, receded from its decisions in Rappaport v. Hollywood Beach Resort Condominium Ass’n, 905 So. 2d 1024 (Fla. 4th DCA 2005), and Bonfiglio v. Banker’s Trust Co. of California, 944 So. 2d 1087 (Fla. 4th DCA 2006) and certified conflict with Somma v. Metra Electronics Corp., 727 So. 2d 302 (Fla. 5th DCA 1999) and Klein v. Royale Group, Ltd., 578 So. 2d 394 (Fla. 3d DCA 1991).  The court held:

Section 201.08(1) does not prohibit enforcement of a n unsecured promissory note in a court of this state for nonpayment of the documentary stamp tax. The string of cases applying a prohibition against enforcement of promissory notes appear to misread the statute. This statute is clear. It contains no prohibition against enforcement for failure to pay the tax on a promissory note, other than one securing future advances.  The legislature might wish to amend the statute, as it is apparent that failure to pay the documentary tax on a promissory note is not an infrequent occurrence, and prohibiting enforcement of the note until such tax is paid would enhance collection efforts.


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