STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BLALOCK FOLIAGE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 80-814A

) EXOTIC PLANT SALES, INC., and ) FIDELITY & DEPOSIT COMPANY )

OF MARYLAND, )

)

Respondents. )

)

RECOMMENDED ORDER

THIS MATTER came on for hearing in Apopka, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, R. T. Carpenter, on August 7, 1980. The Petitioner was represented by its president, Mr. Timothy

1. Blalock, Post Office Drawer F, Apopka, Florida 32703.

   
   

   By complaint filed with the Department of Agriculture and Consumer Services under the provisions of Sections 604.15 through 604.30, Florida Statutes, Petitioner alleges that Respondent Exotic Plant Sales, Inc. (hereafter Respondent-Principal) failed to pay $2,647.34 due on a June 28, 1979, sale of tropical foliage. Petitioner further contends that Respondent Fidelity & Deposit Company of Maryland (hereafter Respondent-Surety) is liable in the event Respondent-Principal fails to meet this obligation.

   
   

   Neither respondent attended this hearing. However, Respondent-Principal answered the complaint, acknowledging the original debt of $2,647.34, but contending that payment by check of $2,000.00 had reduced the balance to

   $647.34. Respondent-Principal further argued that the sale took place on July 2, 1979, when it picked up the order. The date is significant since bond provided by Respondent-Surety was not required by statute after June 29, 1979.

   
   

   FINDINGS OF FACT

   
   

   1. Respondent-Principal, a licensed dealer in agricultural products, routinely ordered plants from Petitioner by telephone for pick up at Petitioner's warehouse in Apopka. Petitioner issued invoice statements on each order individually, which Respondent-Principal customarily paid by check, with a notation on each instrument showing the invoice number(s) to which payment applied.

      
      

   2. The transaction at issue commenced with a telephone order for tropical foliage placed on June 28, 1979. Petitioner began preparing this order on June

      29 by removing plants from its greenhouse, but did not complete assembly of the foliage until sometime after June 29. Respondent-Principal picked up the shipment on July 2, 1979, as agreed. Concurrently, Petitioner billed Respondent-Principal for $2,647.34 on a two-page document identified as invoice 21561 (page 1) and 21562 (page 2).

   3. Petitioner continued to receive and fill Respondent-Principal's plant orders through August 20, 1979, after which sales transactions ceased. However, Respondent-Principal continued to make payments against various outstanding invoices.

      
      

   4. Respondent-Principal issued a check for $2,000.00 dated November 26, 1979, with no notation other than "pd on acct." Petitioner's president received this check on November 28, and instructed the bookkeeper to apply it to the largest invoice balance. Although the $2,647.34 due on invoice 21561/21562 was the oldest debt outstanding, the $3,489.31 due on invoice 21588 was the largest invoice balance, and the bookkeeper applied the payment to the latter debt accordingly.

      
      

   5. By letter dated January 11, 1980, Respondent-Principal advised Petitioner that it had ceased operations and would make a final payment on all of its debts to Petitioner in April or May, 1980. However, no payments were received after the November 26, 1979, check for $2,000.00.

      
      

      CONCLUSIONS OF LAW

      
      

   6. Petitioner's decision to credit Respondent-Principal's $2,000.00 payment to the larger debt was proper. Where a debtor does not designate application of payments, the creditor may apply them to any portion of the indebtedness. Turner Produce Co. v. Lake Shore Growers Coop. Assn., 217 So.2d 856 (Fla. 4th DCA 1969). Therefore, the $2,647.34 debt incurred by Respondent- Principal on invoice 21561/21562 remains outstanding.

      
      

   7. To determine whether or not Respondent-Surety is liable on the transaction at issue, the conditions under which bond was required, the nature of the transaction, and the date on which the surety's liability arose must be established.

      
      

   8. Sections 604.19 and 604.20, Florida Statutes (1979), require dealers in agricultural products to be licensed and bonded. Prior to July 1, 1979, the term "agricultural products" did not exclude "tropical foliage," the product at issue in this proceeding. By statutory amendment effective June 30, 1979, "tropical foliage" was excepted from the definition of "agricultural products." See Chapter 79-238, Sections 2 and 15, Laws of Florida (1979) and Section 604.15(3), Florida Statutes (1979).

      
      

   9. Section 604.20(1), Florida Statutes, provides in part:

      
      

      Such bond. . .shall be conditioned to secure. . .payment to producers. . .of the proceeds of all agricultural

      products. . . purchased by such dealer. . . .

      
      

   10. Section 671.201(32) provides in part: "Purchase" includes taking by sale. . .

   11. Section 672.106(1) provides in part:

       
       

       A "sale" consists in the passing of title from the seller to the buyer for a price. . .

   12. Section 672.401(2) provides in part:

       
       

       Unless otherwise explicitly agreed title passes to the buyer at the time and place which the seller completes his performance with reference to the physical delivery of the goods.

       
       

   13. The above statutory bonding requirement is designed to insure the payment of purchase price, which Petitioner is seeking in this proceeding. Although injury to the Petitioner could have arisen from a breach of the June 28 oral agreement, this did not occur. Rather, the transaction at issue involved a sale which took place on July 2 when Petitioner completed its performance by the delivery of goods to Respondent-Principal. The purchase price became an obligation of Respondent-Principal at that time.

       
       

   14. A surety's liability is generally measured by that of its principal. Cincinnati Insurance Company v. Putnam, 335 So.2d 855 (Fla. 4th DCA 1976). Since the Respondent-Principal incurred its debt on July 2, Respondent-Surety's liability would likewise have attached on July 2. However, the statutory

amendment pertaining to tropical foliage took effect on June 30, and as a result this sale was not covered by the bonding provisions of Chapter 604, Florida Statutes.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That the Department of Agriculture and Consumer Services enter its final order finding that Petitioner, Blalock Foliage, Inc., is due $2,647.34 from the sale of tropical foliage to Respondent, Exotic Plant Sales, Inc., as stated in Petitioner's Invoice 21561/21562; and, further, discharging Respondent, Fidelity & Deposit Company of Maryland, from liability under Chapter 604, Florida Statute, on this sale.

DONE AND ENTERED this 22nd day of August, 1980, in Tallahassee, Florida.

R. T. CARPENTER Hearing Officer

Division of Administrative Hearings

101 Collins Building Tallahassee, Florida 32301 (904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 1980.

COPIES FURNISHED:

Blalock Foliage, Inc. Mr. Timothy J. Blalock Post Office Drawer F West Kelly Park Drive Apopka, Florida 32703

Exotic Plant Sales, Inc. 1902 Charles

Houston, Texas 77093

Fidelity & Deposit Company of Maryland

777 South Post Oak Building Suite 700

Houston, Texas 77903

Robert A. Chastain, Esquire General Counsel

Department of Agriculture and Consumer Services

Mayo Building

Tallahassee, Florida 32301

Docket for Case No: 80-000814

Orders for Case No: 80-000814