Biscayne Realty & Ins. Co. v. Ostend Realty Co.

• Decision Date: 23 May 1933
• Citation: 148 So. 560,109 Fla. 1
• Court: Florida Supreme Court
• Parties: BISCAYNE REALTY & INS. CO. v. OSTEND REALTY CO. et al.

148 So. 560

109 Fla. 1

BISCAYNE REALTY & INS. CO. v. OSTEND REALTY CO. et al.

Florida Supreme Court

May 23, 1933

En Banc.

Suit by the Biscayne Realty & Insurance Company against the Ostend Realty Company and others. From a final decree dismissing the supplemental bill of complaint, the complainant appeals.

Decree reversed, with instructions in accordance with opinion. Appeal from Circuit Court, Dade County; Paul D Barns, Judge.

COUNSEL

James M. Carson and Willard & Dressler, all of Miami, for appellant.

Kurtz &amp Reed, of Miami, and Mabry, Reaves, Carlton & White, of Tampa for appellees.

OPINION

ELLIS Justice.

This case is on rehearing. The former opinion was filed March 11, 1933. It was orally argued on rehearing by Hon. James Carson for the appellant and Hon. O. K. Reaves for appellees.

A creditors' bill was filed by the appellant Biscayne Realty & Insurance Company, a corporation, against Ostend Realty Company, a corporation, First Presbyterian Church of Coral Gables, a corporation, Clarence M. Busch and Bonnie M. Busch, his wife, and Eleanor R. Shutt, a single woman. A demurrer to the bill was overruled, and that order was affirmed. See Ostend Realty Co. v. Biscayne Realty & Ins. Co., 99 Fla. 1221, 128 So. 643.

The purpose of the bill is stated in the case cited above to be one to set aside and declare null and void certain conveyances of land made by the Ostend Realty Company to the several persons named in the bill as having been in fraud of the complainant, a creditor of the Ostend Realty Company; the complainant holding an unsatisfied judgment against the Ostend Company. Answers were interposed to the bill. The case was referred to a master, with instructions to report his findings of law and fact. The master made his report, and the court entered a decree in July, 1931. The court decreed that the equities were with the defendants, that the complainant was not entitled to the relief sought, and that the bill should be dismissed. From that decree the complainants took an appeal which was affirmed as stated above an March 11, 1933, in an opinion by Hon. J. B. Johnston, Circuit Judge, who sat in place of the writer, who was absent on account of illness.

A rehearing was granted, the petition for rehearing containing many citations of decisions from Florida and other states relating to points of law which it is urged the court erroneously decided.

A brief statement of the facts which seem to be established by the pleadings and the evidence is probably necessary to a clearer understanding of the controversy. The Ostend Realty Company is a New York corporation incorporated in 1905. It was organized for the purpose of holding title to New York apartment houses and hotels owned by Clarence M. Busch, who was its president, and retained that position to the date testimony was taken in this case. Mr. Busch owned all the stock of the corporation, except the 'qualifying shares.' In 1925 or 1926 Mr. Clarence M. Busch became interested in Florida real estate on the east coast in the vicinity of Miami. He purchased several tracks of land, taking the title in the Ostend Realty Company as he had done in 'handling business of that character since 1905.' It was convenient for him to do so, although his money was used in the purchase of many tracts. He kept the records of the company in his house and always had access to them. Even property purchased from Mrs. Busch and with her funds was purchased in the name of the company. In many such transactions where lands were acquired by the Ostend Company in its name it had not the 'slightest interest' in the land.

In some one or more of such transactions the Ostend Realty Company in its name became indebted to the Biscayne Realty & Insurance Company in the sum of $10,416.67, on which the Biscayne Company obtained a judgment at law against the Ostend Company in April, 1928, in the sum of $13,593.94. The execution issuing upon the judgment was returned nulla bona, and in April, 1929, the complainant exhibited its creditors' bill against the Ostend Company and others, as stated, in the circuit court for Dade county. The bill attacks the conveyances from the Ostend Realty Company to Mrs. Bonnie M. Busch, Clarence M. Busch, and by them to Miss Eleanor R. Shutt, the Presbyterian Church, and by Miss Shutt to Busch and his wife. There are four tracts of land involved which for convenience may be referred to as parcels Nos. 1, 2, 3, and 4. The allegations necessary to sustain a creditors' bill are duly made.

The answer of the Presbyterian Church relates to parcel No. 4, and contained the averment that the conveyance was made by Busch and his wife for a church site. There seems to be no controversy affecting the lands covered by this conveyance.

The separate answers of Clarence M. Busch and his wife, Bonnie M. Busch, present the controversy around which this litigation moves. The Ostend Realty Company also answered the bill. The answer was signed in the name of the company by Clarence M. Busch as its president. As to parcel No. 1, it is averred that the title was conveyed to the company in December, 1925, by Clarence Busch and his wife solely for the purpose of immediate reconveyance to Mrs. Busch, which was done on the same day. It is averred that the company never had any interest in the land, and there was no fraud in the transaction.

As to parcel No. 2, it is averred that the Ostend Company transferred the land to Clarence M. Busch subject to four existing mortgages aggregating $40,000, and that one of them secured the indebtedness of the company to J. R. Shelton in the sum of $2,633.21, and that the conveyance was made in consideration of Busch assuming the mortgage indebtedness of the company to Shelton which has been paid and a large part of the remaining indebtedness has been discharged by Busch. the Ostend Realty Company purchased the the Stend Realty Company purchased the land in that parcel from Biscayne Realty Company, a copartnership, and conveyed the same to Clarence M. Busch; that the land was purchased by the Ostend Company subject to three mortgages securing the indebtedness aggregating $21,250, that part of the consideration was a sum of money agreed by the Ostend Company to be paid to the Biscayne Realty & Insurance Company amounting to $10,416.67, and that debt was evidenced by the promissory note of the Ostend Company, the payment of which was secured by the mortgage executed by the Ostend Company in favor of the Biscayne Realty & Insurance Company--that mortgage is the one held by the complainant in this cause--that Clarence M. Busch assumed the payment of all four mortgages; that the conveyance to him was in good faith and not fraudulent; and that Busch has made substantial payments upon the first three mortgages.

As to parcel No. 4, it is averred that the same was acquired from John McAulay, Jr., and wife; that the company assumed the payment of mortgages to secure debts aggregating $65,000 due to Clara A. Lybyer, Albert Lyber, and Rebecca Mitchell; in addition thereto the company gave its note to J. A. McAulay, Jr., in the sum of $16,193.93, and executed its mortgage upon the land to secure the payment of the same. It is further averred that in this transaction the Ostend Company was acting for Mrs. Bonnie M. Busch; that that part of the purchase price paid to McAulay was paid by her; that the company had no interest in it; and that it merely held the title temporarily until some irregularities in it could be corrected, and that the company transferred the title to Mrs. Busch in April, 1926; that Mrs. Busch had paid all the indebtedness due to McAulay, and paid all of that due to Rebecca Mitchell.

The answers of Clarence M. Busch and Mrs. Bonnie M. Busch set up substantially the same matters; Mrs. Busch's answer dealing only with parcels Nos. 1 and 4, and disclaiming any knowledge as to parcels Nos. 2 and 3. Mr. Busch's answer admitted that the Ostend Company owned parcels Nos. 2 and 3, but denied that it ever owned parcels Nos. 1 and 4. The answer denies any fraud in the transactions as to any of the parcels, and that the conveyance to him of parcel No. 2 was free of any fraud, and that he paid a valuable consideration therefor.

Eleanor R. Shutt's connection with the transactions relates to parcel No. 2 conveyed to her by Busch and wife.

The evidence tends to establish the fact that, prior to the transactions mentioned above, the Ostend Realty Company had ceased to engage in any business; that it had disposed of all its property and divided its assets among its stockholders; that in 1925 the defendant Clarence M. Busch used the name of the corporation as a matter of convenience in the transactions above mentioned; and that all the money used for them was furnished by him and his wife, and the Ostend Corporation had no financial interest in the lands, but was used at will by Busch, who was practically sole owner of all the stock of the company and its nominal president, as the conduit through which passed the title to the lands either to Busch, or his wife, accordingly as he desired the title to vest. This was true as to parcel No. 3 as well as to the other parcels. The answer of Clarence M. Busch as to parcel No. 3 avers that the title to that tract, while taken in the name of the company, was afterwards transferred to him in consideration of the assumption by him of the mortgages which the company had assumed and the mortgages executed by it to secure the remainder of the purchase price in the sum of $10,416.67 to the complainant.

Upon the coming in of the master's report of the evidence and his findings of fact and law, the complainant, in February 1931, by motion asked leave to file a supplemental bill, which was granted, and...