Carman v. Gunn

• Decision Date: 05 April 1967
• Docket Number: No. 7229,7229
• Citation: 198 So.2d 76
• Parties: H. Marcus CARMAN, Appellant, v. John Harry GUNN, Appellee.
• Court: Florida District Court of Appeals

Page 76

198 So.2d 76

H. Marcus CARMAN, Appellant, v. John Harry GUNN, Appellee.

No. 7229.

District Court of Appeal of Florida, Second District.

April 5, 1967.

Carey & Harrison, St. Petersburg, for appellant.

James H. Wehle, St. Petersburg, for appellee.

PIERCE, Judge.

This is an appeal by H. Marcus Carman, plaintiff below, from a final decree entered by the Pinellas County Circuit Court in favor of John Harry Gunn, defendant below, denying relief in a specific performance suit. The parties will be referred to as they were in the Court below.

By amended complaint, plaintiff sought the aid of the chancery Court in requiring defendant to specifically perform a written agreement entered into by the parties on June 3, 1964, whereby defendant agreed to sell to plaintiff all his stock in a solely-owned corporation known as True Realty Co., Inc., for the sum of $137.50 cash and a like sum each month thereafter for and during the lifetime of defendant, or for a period of five years from date of the agreement, whichever was longer. It was provided that in the event of defendant's death within said period, such monthly payments would be then made to Mrs. Reglita V. Reyes, his housekeeper, until the five year period expired on June 3, 1969.

The corporation, hereinafter referred to as True Realty, held title to defendant's realty holdings, consisting largely of property bordering upon or near the Little Withlacoochee River in Sumter County. The property was the remaining accumulations of defendant from many years of buying and selling property in that area, dating back to acquisition of tax delinquent properties under the old Murphy Act of the latter 1930's. The corporate entity had been created as a convenience to defendant in dealing in real estate because he was then laboring under disability of an insane wife.

After the agreement of June 3, 1964, plaintiff sent to defendant promptly each month his check for the requisite monthly payment of $137.50. However, defendant refused to either cash or return any of them, including the original check given at the time the agreement was made. Defendant also refused to convey or transfer his stock in the corporation as provided in the agreement.

By answer, the defendant admitted executing the contract, admitted receiving the monthly checks and not cashing any of them, and admitted owning all stock of True Realty and that its main asset was real estate; alleged that on the day the agreement was signed his 'physical and mental condition was such that he was incapable of transacting business,' that he had been 'suffering from an asthmatic condition,' that 'lack of sleep had dulled his mental facilities (sic)' so that he was 'not able to comprehend the meaning' or understand the terms of the agreement; that he had just passed his 69th birthday and 'has a shortened life expectancy because of his asthmatic condition and other physical infirmities'; and that the agreement contemplated transfer of the stock only 'after full payment therefor' and that it would be inequitable to require such transfer prior to full payment 'because the defendant would be left without any security for future payments by the plaintiff.'

Thus the issues drawn by the pleadings were extremely narrow, consisting of only two substantial questions, (1) the legality of the agreement from the standpoint of defendant's competency to execute the same, and (2) the enforceability of the agreement as against the claim that it lacked mutuality of remedy. After trial and taking of sworn testimony, the Chancellor entered final decree on November 22, 1966, finding that the agreement was for the purpose of transferring to plaintiff the entire outstanding stock of True Realty, whose sole asset was title to approximately 275 acres of real property in Sumter County which was free and clear of any encumbrance of record; that the monthly payment checks had been received by defendant but not 'negotiated'; that defendant's physical condition when he executed the agreement was such that he was not unaware of his actions and therefore 'knew, or should have known, the contents of said contract'; that the acts and conduct of plaintiff did not 'in any way amount to fraud, overreaching, or sharp practices'; that while the agreement was ostensibly for the purchase of corporate stock it was actually an agreement 'for the purchase of real property' and viewed thusly 'its terms were not sufficiently certain nor could there be a mutuality of remedy thereunder'; and that the agreement was not equitable because of 'a complete lack of adequate security for the defendant' and therefore should not be specifically enforced although 'the amount of the consideration is not in and of itself inadequate.' The decree thereupon denied specific performance without prejudice to plaintiff pursuing any 'action at law' he might have.

We agree with the able Chancellor upon his findings and hold there was credible, substantial evidence to sustain the same, except such findings as bear upon the decretal order denying specific performance, as to which we are impelled to disagree and must reverse.

The testimony reveals a most interesting human interest story. At the time of the agreement, defendant was a retired dentist living in St. Petersburg and had organized the True Realty corporation some thirty years before for the sole purpose of being able to handle real estate transactions over his own signature notwithstanding a then incompetent spouse. He lived alone in a home owned and occupied by his housekeeper Mrs. Reyes, and had been retired only about four years. Although Dr. Gunn stated he was feeling 'so bad' physically when the agreement was signed that he in effect didn't know what he was doing, he displayed in his testimony a remarkable mental alertness and agility which is readily apparent even from the cold record. His memory was acutely sharp and incisive, being able at will to recall dates, persons, locations, geographical descriptions, transactions, occurrences, etc., in trenchant detail, such as would challenge a much younger person of the keenest intellect. He displayed a rare insight into comparable values, relative locations of property, trends of realty developments, and generally all facets of the real estate field. It is apparent that in asserting his inability to comprehend the nature of the agreement when it was signed, he, to use a trite, hackneyed expression, 'protesteth too much.'

The negotiations and actual execution of the agreement in question came about in meetings between plaintiff, Dr. Gunn, and one George R. Boortsalas. Boortsalas had known Dr. Gunn for some ten or twelve years, first as a dentist, and later through accounting work with a realty company. He had known plaintiff Carman about five or six years as an acquaintance at stockholder's meetings of a development organization. Prior to June 3, 1964, Dr. Gunn had asked Boortsalas 'about selling the property' and Boortsalas 'had indicated that Mr. Carman might be interested.' Thereafter, around June 1st, Boortsalas chanced upon Carman and mentioned to him 'that Dr. Gunn was interested in selling the property' and 'would he be interested in meeting Dr. Gunn.' Carman indicated that he would, so Boortsalas phoned Dr. Gunn and asked him 'would he be interested in meeting with Mr. Carman, and he said yes.' Dr. Gunn 'set the time' for the meeting for the following afternoon around 1 or 2 o'clock, at which time Carman and Boortsalas went to Dr. Gunn's home, where the deal was discussed at length, Boortsalas listening but taking no part otherwise in the conversation. Boortsalas testified that in the early stages of the discussion Dr. Gunn did most of the talking. They then discussed the deal at length.

Boortsalas could not recall that there was 'a total price ever mentioned' but that the 'first mention of figures' was when Carman offered '$125.00 a month for life on a longevity basis, and then Dr. Gunn said he wanted one hundred and fifty, would like to have one hundred and fifty.' Later they mutually agreed to 'split the difference' and make it $137.50 a month. They then procured writing paper and pen and ink and the agreement was written out in longhand in duplicate. After the first paragraph was written, which merely specified the transfer of stock and the time and amount of monthly payments, Carman, according to Boortsalas' testimony, 'gave it over to Dr. Gunn to read it. Dr. Gunn read it and apparently wasn't fully satisfied with it, because he asked Mr. Carman to add to it by including in a paragraph giving Mrs. Reyes a five-year guarantee on longevity basis apparently, and Mr. Carman agreed. He took back the paper and added to it the second paragraph indicating this five-year guarantee. And then he gave it back to Dr. Gunn, and Dr. Gunn read it. And some place in there he handed it to me and said, 'Do you think this is all right?' And I said--I also read it and he asked me if it was all right, and I said inasmuch as it seemed to fulfill the agreement and he was satisfied and that's what they wanted, it was all right; I didn't see anything wrong with it.'

As stated, two separate copies of the agreement were made out, each of which was written in longhand, each signed by Dr. Gunn and by Mr. Carman and witnessed by Mr. Boortsalas, Dr. Gunn retaining one signed copy and Mr. Carman the other. One of the originals is in the record and shows to be legibly and plainly worded. Boortsalas testified that the parties were together for 'two and a half to three hours,' and when asked about Dr. Gunn's appearance 'from a health standpoint' when they were leaving he stated 'he seemed all right. He didn't seem to have any particular change in appearance or anything. Both of them seemed to be quite satisfied with their arrangement and, their attitude, both seemed to be quite satisfied.' Boortsalas further testified that he had never discussed any terms or price or any figures with...