Cutri Enterprises, Inc. v. Pan Am. Bank of Miami

• Decision Date: 07 October 1959
• Docket Number: No. 1029,1029
• Citation: 115 So.2d 592
• Parties: CUTRI ENTERPRISES, INC., a Pennsylvania corporation, Angelotti-Florida, Inc., a Florida corporation, Bahama Beach Corporation, P. A. Cutri, Donald R. Cutri, and Norman J. Cutri, Appellants, v. PAN AMERICAN BANK OF MIAMI, a Florida corporation, and J. I. Kislak Mortgage Corporation of Florida, a Florida corporation, Appellees.
• Court: Florida District Court of Appeals

Page 592

115 So.2d 592

CUTRI ENTERPRISES, INC., a Pennsylvania corporation, Angelotti-Florida, Inc., a Florida corporation, Bahama Beach Corporation, P. A. Cutri, Donald R. Cutri, and Norman J. Cutri, Appellants, v. PAN AMERICAN BANK OF MIAMI, a Florida corporation, and J. I. Kislak Mortgage Corporation of Florida, a Florida corporation, Appellees.

No. 1029.

District Court of Appeal of Florida, Second District.

Oct. 7, 1959.

Rehearing Denied Nov. 23, 1959.

George Whitehurst, Jr., Hall & Hedrick, Miami, for appellants.

William B. Roman, Miami, for appellee Pan American Bank of Miami.

H. N. Roth, Roth & Roth, and Charles V. Silliman, Orlando, for appellee J. I. Kislak Mortgage Corp. of Florida.

ALLEN, Chief Judge.

The plaintiffs filed a complaint against the defendants to set aside certain mortgages on the ground that the loan for which the mortgages were executed as security was usurious. The defendants filed an answer denying the charge, and one of the defendants, Kislak Mortgage Corporation, filed a counterclaim seeking a foreclosure of the delinquent mortgages. A severance as to the counterclaim was granted and the lower court tried the case upon the sole issue of whether or not the loan was usurious.

The trial of this issue took eight days and the record in this court includes 831 pages of testimony and over a thousand pages of documents, pleadings and depositions.

The lower court made the following findings of fact:

1. That the defendant J. I. Kislak Mortgage Corporation of Florida was the agent of Cutri Enterprises, Inc., and Angelotti-Florida, Inc., and not the agent of the defendant Pan American Bank of Miami in connection with the transactions which are the subject matter of this suit.

2. That the guarantee of J. I. Kislak Mortgage Corporation of Florida to Pan American Bank of Miami was a bona fide guarantee of the indebtedness of the plaintiffs to said bank.

3. That the monies that were to be paid to J. I. Kislak Mortgage Corporation of Florida by the plaintiffs were for services rendered in negotiating and guaranteeing the indebtedness of the plaintiffs, and there is absolutely no evidence that the Pan American Bank of Miami received or was to receive any part of the monies that were to be paid to J. I. Kislak Mortgage Corporation of Florida by the plaintiffs.

4. That with respect to the delay in closing the loan and disbursement of the proceeds by Pan American Bank of Miami, there is no evidence that the note was pre-dated or that the delay in closing and disbursement was contrived with any intent to circumvent the usury statute, nor can any usurious intent be reasonably imputed to the bank from any other aspect of the transaction. In view of the fact that the indebtedness was never paid by the plaintiffs, the bank did not have the opportunity to adjust this interest at the time of payment as was the bank's custom, and plaintiffs are entitled to an adjustment of $905.50 against their said indebtedness, which adjustment should be made by J. I. Kislak Mortgage Corporation of Florida and J. I. Kislak Agency, Inc., of Florida, the present owners and holders of said indebtedness.

5. That the Pan American Bank of Miami did not wilfully and knowingly reserve, charge or take a rate of interest greater than 15% per annum, and therefore no usury is involved in the notes or mortgages given by the plaintiffs to said Pan American Bank of Miami or to J. I. Kislak Mortgage Corporation of Florida.

The following pertinent facts are deduced from the record:

Cutri Enterprises, on November 15, 1956, through its agent, Kislak Mortgage, obtained a loan for $100,000 from Pan American Bank, for which Cutri Enterprises executed a note to the bank secured by a mortgage on property belonging to Cutri Enterprises, known as Flora Beach Subdivision.

Cutri Enterprises, approximately a month later, applied for a $600,000 loan from the Pan American Bank, which the bank refused to grant. Subsequently, Kislak Mortgage Corporation negotiated with the Pan American Bank concerning this loan. On January 16, 1957, Cutri Enterprises, through its agent Kislak Mortgage, made another request for a $600,000 loan, advising the bank that it planned to use the money to pay off the $100,000 loan, to pay $134,000 on the Flora Beach Acreage, and to use the remainder in completing the construction of 52 houses in the Flora Beach Subdivision. Pan American advised Cutri that it would not make a $600,000 loan but would make a $400,000 loan, provided that Kislak Mortgage Corporation would guarantee the loan.

The president and another officer of Cutri Enterprises appeared at the office of the attorney for Pan American, which attorney was also representing Kislak Mortgage Corporation, on January 26, 1957. Cutri was presented with a commitment agreement which provided, in part, that the bank should be paid $18,000 as a commitment fee; that $12,000 would be the interest at 6% on the $400,000 loan; that the note to be executed would be for $430,000 due six months from date and secured by a mortgage on the Flora Beach Acreage which was to be purchased with the money. Cutri Enterprises was also requested to execute an $80,000 note secured by a second mortgage on the Flora Beach Acreage to Kislak Mortgage Corporation as their fee in procuring and acting as guarantor for Cutri on the $430,000 loan from Pan American Bank. Various documents were executed carrying out these proposals at this time.

February 14, 1957, a supplemental agreement was entered into between the parties which provided that $100,000 would be used to pay off a prior loan to the bank; that $134,000 would be paid to the vendors of Flora Beach Acreage; and that the remaining $166,000 should be either credited to the account of Cutri Enterprises or given to Kislak Mortgage Corporation to be disbursed as a construction fund for erection of the houses in Flora Beach Subdivision. All documents were finally completed on February 22, 1957, but thereafter, on or about February 27, 1957, the Pan American Bank made an additional loan of $60,000 since Cutri Enterprises needed additional funds with which to complete the 52 houses in Flora Beach Subdivision. Both this $60,000 loan and the $400,000 loan became due on July 29, 1957.

On March 5, 1957, Kislak Mortgage Corporation requested and received a memo from Cutri which provided that Cutri agreed to pay Kislak $9,200 for costs in negotiating the total $400,000 and $60,000 loans and to pay a brokerage and finder's fee of $80,000 as per the January 26, 1957 agreement, which memo was signed by both parties.

Cutri Enterprises contended below that Kislak Mortgage Corporation had, in fact, during this interim period, become the agent of Pan American Bank and that the $80,000 finder's and brokerage fee represented a bonus to the bank over and above the interest previously specified.

Cutri Enterprises also alleged that this conspiracy was precipitated by Kislak Mortgage and Pan American Bank, knowing that Cutri Enterprises desperately needed this loan to keep from going bankrupt. Kislak Mortgage Corporation, on the default of Cutri Enterprises, made good its guarantee of the loan and secured the $400,000 note and mortgage from Pan American Bank. It should be noted that Kislak Mortgage Corporation not only acted as a broker in securing the loans in question for Cutri Enterprises and securing the loan from the bank, but also guaranteed the payment of the loan to the bank and, in fact, did pay the loan.

It will also be seen that Pam American Corporation contemplated a return of 15% on the monies loaned to Cutri Enterprises by adding the $18,000 commitment fee and the $12,000 interest fee for the contemplated six months period. So if the bank received any portion of the $80,000 to be paid Kislak Mortgage Corporation by Cutri Enterprises, the loan would be usurious.

The appellee asserts that the facts in this case come within the purview...