Central Bank & Trust Co. v. Davis
| Citation | 102 So.2d 600 |
| Parties | CENTRAL BANK AND TRUST COMPANY, a Florida banking corporation, Appellant, v. P. J. DAVIS and Blanche Davis, his wife, Florida Carolina Lumber Company, aFlorida corporation, Southern Creosoted Lumber Co., Inc., a Floridacorporation, Clarence E. Hood, Jr., Charles H. Alcock, Eduardo Morales, SeymourB. Liebman, LeoRobinson, Dania Bank, a Florida banking corporation, Bank of Miami Beach, aFlorida banking corporation, Pan American Bank of Miami, a Florida bankingcorporation, and Miami Beach First National Bank, a banking corporation of theUnited States,Appellees. |
| Decision Date | 23 April 1958 |
| Court | United States State Supreme Court of Florida |
Pallot, Cassel & Marks, Miami, for appellant.
Sibley & Davis, Miami Beach, for Hood and Alcock.
Harold Friedman and Salley & Roman, Miami, for Eduardo, Morales, Pan American Bank of Miami and Southern Creosoted Lumber Co. Inc.
Seymour B. Liebman, Miami Beach, for Bank of Miami Beach and in pro. per., for appellees.
Appellant Central Bank and Trust Company, which was plaintiff below, seeks reversal of numerous summary final decrees in favor of certain appellees, who were defendants below, in a proceeding instituted by appellant as a creditor's bill.
The determining point is whether there existed a genuine material issue to preclude the entry of the summary decrees.
Appellant Central Bank and Trust Company, hereafter referred to as Central, over a period of time advanced various sums of money to Florida Carolina Lumber Company, hereafter referred to as Florida Carolina. The loans were secured by the note of Florida Carolina guaranteed by appellees P. J. Davis and Blanche Davis, his wife, together with an assignment of an account receivable in favor of Florida Carolina against Rose Saxon Lumber Company. There was a default in the note as well as in the payment of the account receivable. Central filed suit and on August 27, 1956, recovered a judgment against Florida Carolina and the two Davises.
During the course of its operation Florida Carolina had obtained financing from the three appellee-banks, to-wit, Dania Bank, Bank of Miami Beach, and Pan American Bank of Miami. In order to obtain such financing Florida Carolina would order a shipment of lumber. Accompanying the shipment would be a sight draft with a bill of lading attached. On receipt of the sight draft the bank involved would advance the funds to meet the draft and hold the bill of lading as security. On arrival of the lumber in Miami, Florida Carolina would obtain the bill of lading from the bank under a trust receipt. When the lumber was unloaded it would be placed under a warehousing arrangement with Lawrence Warehousing Company, which would in turn issue warehoulde receipts for the lumber. These warehouse Company, which would in turn issue warehouse the lending bank and substituted in lieu of the trust receipts.
The effect of this transaction with the three appellee-banks obviously was to give them a lien or charge against the lumber for the various amounts advanced by them for the purchase of the lumber. In June, 1956, due to deterioration of lumber, wastage and other causes the three appellee-banks were notified that there was not sufficient lumber in the warehouse to meet the obligations which they held against it. The banks became dissatisfied with the management of Florida Carolina and threatened suit.
In order to forestall the filing of suit, the appellees P. J. Davis, Charles H. Alcock and Clarence E. Hood, Jr., who owned all of the stock of Florida Carolina, resigned as officers and directors of Florida Carolina and placed all of their stock with a board of trustees selected by the three appellee-banks. These same three individuals owned all of the outstanding stock of Southern Creosoted Lumber Co., Inc., a separate corporation. They likewise agreed to establish a voting trust of their stock in Southern and at the same time Southern executed a mortgage on certain of its property in Hillsborough County and guaranteed the obligations of Florida Carolina to the three appellee-banks. These trust agreements and other security instruments were executed on or about June 30, 1956, approximately two months before the recovery of appellant's judgment.
It will be noted that appellant had a judgment against Florida Carolina and against P. J. Davis and wife. It had no judgment against Southern Creosoted Lumber Co. or against any of the other appellees. The appellees Morales, Liebman and Robinson were the three trustees designated by the three appellee-banks to exercise the voting rights of the stock in Florida Carolina and Southern Creosoted which had been provided by the several voting trust agreements. When the trust agreements were executed, Florida Carolina was obviously in difficult financial straits. Its entire supply of lumber was encumbered by the warehouse receipts held by the three appellee-banks. All of its other assets were encumbered by a mortgage in favor of one Apte, who is not a party to this suit.
Appellant Central after recovery of its judgment instituted proceedings supplementary to execution. Before such proceedings were terminated appellant then filed its bill in equity contending that the transactions between Florida Carolina, Southern Creosoted and the three owners of all of the stock in each of the corporations constituted a fraud against its rights as a creditor. The complaint prayed that all of the voting trust agreements be set aside, that Southern Creosoted be declared a wholly owned subsidiary of Florida Carolina and that the assets of these corporations be made available at least pro tanto to the liquidation of appellant's judgment.
After filing their several answers, appellees Bank of Miami Beach, Pan American Bank and Dania Bank, Together with Hood, Alcock, Morales, Liebman and Robinson,...
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