Columbia Bank for Cooperatives v. Okeelanta Sugar Co-op.

• Decision Date: 10 April 1951
• Parties: COLUMBIA BANK FOR COOPERATIVES v. OKEELANTA SUGAR COOPERATIVE et al.
• Court: Florida Supreme Court

Page 670

52 So.2d 670

COLUMBIA BANK FOR COOPERATIVES v. OKEELANTA SUGAR COOPERATIVE et al.

Supreme Court of Florida, en Banc.

April 10, 1951.

Rehearing Denied June 11, 1951.

Arthur W. Holler, Jr., of Columbia, S. C., for appellant.

Winters, Foskett, Cook & Tylander, West Palm Beach, for appellees.

HOBSON, Justice.

Okeelanta Sugar Cooperative (hereinafter called Okeelanta), a cooperative association organized under the laws of the State of Florida, owned and operated a sugar mill and refinery. Okeelanta at one time owned the land adjacent to its mill, on which lands sugar cane was raised as a raw product for the mill and refinery.

By contract between Okeelanta and the British West Indies Central Labor Organization (hereinafter called the Organization) foreign labor was imported to assist in the growing of sugar cane. The contract between Okeelanta and the Organization provided that the laborers would be fed by Okeelanta and that the cost of such feeding might be deducted from the daily wages of the laborers, before payment to them, at the rate of $1.20 per laborer per day. Thereafter, according to the stipulation of facts upon which this case was tried, 'An oral agreement was made between Okeelanta and G. L. Royal for feeding such Jamaican labor at $1.20 per day.' (Italics supplied)

The agreement between Royal and Okeelanta (as it was established by the proof) was entirely separate from and unrelated to the contract between Okeelanta and the Organization.

Okeelanta encountered certain financial difficulties which culminated in a proceeding brought by its mortgagee, appellant here, for the foreclosure of a mortgage covering certain real and personal property and for the enforcement of a pledge of funds and other personal property. A receiver was appointed to take charge of, protect and operate the mortgaged property and, at the same time, to take possession of and administer, in accordance with the orders of the court, the funds and other property pledged to the appellant as security for the mortgage indebtedness.

The appellee was permitted to intervene and file an answer and counterclaim in the proceeding alleging the existence of a trust upon $2,745.64 of the funds held by the Receiver, which was the amount of the value of meals furnished by Royal to the laborers for a two-week period for which compensation had not been received. G. L. Royal had accepted a promissory note from Okeelanta in the same amount and had later indorsed it to Royal's Inc., a Florida corporation, (appellee here) in payment of his indebtedness to said corporation.

Apparently the learned Chancellor entered his order denying appellant's motion to dismiss the counterclaim of the Intervenor, Royal's Inc., and ordered the Receiver to pay $2,745.64 to Royal's Inc., upon some theory of a trust with reference to the money originally owed to Royal (now claimed by Royal's Inc. to be due to it as holder and indorsee of the promissory note) by Okeelanta for services rendered in feeding the Jamaican laborers. The Chancellor did not set forth the reasons for his ruling but contented himself with finding the equities to be with the Intervenor, Royal's Inc., and that the material allegations of the counterclaim were established by the proof.

We have sought in vain to unearth some theory of the law of trusts which might be said to have been brought into play by virtue of the pleadings in, and the facts of, this particular case. We do not find that a trust existed with reference to funds due Royal or Royal's Inc. by Okeelanta but, on the contrary, the obligation was simply an ordinary debt evidenced by the note. Certain it is that no express trust was created and Royal's Inc. in its pleading laid no predicate for a claim and made no averment that any other type of trust existed. An express trust cannot exist unless there is an execution of an intention to create such a trust by the one having legal and equitable dominion over the property made subject to it. 54 Am.Jur. 22. The proof in this case does not show the execution of such an intention by contract or agreement. Moreover, it cannot be said that an express trust should be held to exist by inference because the evidence does not show clearly, or at all, that the laborers turned their money over to, or permitted it to be deducted from their wages by, Okeelanta for the benefit of Royal. Indeed, the evidence fails to show that the laborers knew anything about the agreement between Royal and Okeelanta or that Royal was even informed of the existence of the contract between Okeelanta and the Organization. Assumptions to the contrary cannot be indulged in a case wherein it is sought to establish an express trust founded upon a parol agreement. The counterclaim of the Intervenor contains no basis upon which we can predicate, and it is doubtful that the stipulated facts justify, the conclusion that a resulting trust arose by virtue of the transaction between Okeelanta and G. L. Royal and we do do not find allegations or evidence of a confidential relation or of any elements of fraud or inequities which would warrant a determination that a constructive trust should be declared.

In its answer and counterclaim Royal's Inc. alleged: '2. That pursuant to arrangements made by and between said Okeelanta Sugar Cooperative, the said G. L. Royal and said employees, meals were served to said employees without payment directly by the employees, and the said Okeelanta Sugar Cooperative was to deduct from the wages and salaries of said employees for the said G. L. Royal the amounts of money necessary to defray the costs of the said meals served and after so deducting such amounts, Okeelanta Sugar Cooperative was to forthwith pay over to the said G. L. Royal the amounts of money so deducted.'

The stipulation of facts contains the the following recitations: '3. An oral agreement was made between Okeelanta and G. L. Royal for feeding such Jamaican labor at $1.20 per day. Under this agreement, Okeelanta furnished a mess hall, stoves, water heating system, and a truck for serving hot meals in the field. Royal furnished everything else, although he used labor furnished by Okeelanta but for which credit was given in the settlement of charges for meals. Such feeding of Jamaican labor was begun in the fall of 1946.' (Italics supplied)

It will be noted that the allegata and probata do not meet and correspond. The foregoing allegations might be said to have made a case which would justify a holding that the moneys deducted from the laborers' wages constituted a trust fund for the benefit of G. L. Royal; yet, proof as contained in the stipulation of facts shows only the relationship between Okeelanta and G. L. Royal of debtor and creditor.

It might be suggested that the receiver did not deny the above quoted allegations which were contained in the answer and counterclaim of Royal's Inc. and, therefore, the allegations should be deemed to have been admitted as true and that proof of them was unnecessary. This position is not tenable. As...