Davanzo v. Miami Nat. Bank, 73--1352

• Decision Date: 01 October 1974
• Docket Number: No. 73--1352,73--1352
• Citation: 301 So.2d 797
• Parties: Vito DAVANZO, Appellant, v. MIAMI NATIONAL BANK, Appellee.
• Court: Florida District Court of Appeals

Page 797

301 So.2d 797

Vito DAVANZO, Appellant, v. MIAMI NATIONAL BANK, Appellee.

No. 73--1352.

District Court of Appeal of Florida, Third District.

Oct. 1, 1974.

Rehearing Denied Nov. 5, 1974.

Louis Vernell, Miami, for appellant.

Frates, Floyd, Pearson, Stewart, Proenza & Richman, Miami, for appellee.

Before BARKDULL, C.J., and HENDRY and HAVERFIELD, JJ.

PER CURIAM.

Plaintiff-appellant seeks review of an adverse final judgment entered in favor of the defendant-appellee on its counterclaim and against the plaintiff on his complaint.

Prior to 1969, Leisure Industries, Inc., f/k/a Fibra Boats, Inc., a fiberglass boat manufacturing business, had borrowed from the defendant-appellee, Miami National Bank, $75,000 and $120,000 and pledged as security therefor all of tis assets and its outstanding stock. In addition, by August 1969 the company was insolvent and had accumulated over $58,000 in overdrafts in its two checking accounts in defendant bank. Further, Leisure Industries had been placed into involuntary bankruptcy. At about this time plaintiff-appellant, Vito Davanzo met one Harry Siegel who discussed with plaintiff the possibility of salvaging Leisure. Siegel who already had an interest in the company convinced Davanzo, an experienced businessman, that there was the possibility of a good deal if they bought Leisure Industries, Inc. which was in poor financial condition. Subsequently, Siegel and appellant went to the defendant bank and discussed the purchase of the defendant bank's equity interest in Leisure Industries and to obtain working capital for the operation thereof. On October 1, 1969 plaintiff and Siegel, accompanied by Siegel's attorney, conferred with the president of the defendant bank and plaintiff was allowed to borrow $280,000 which represented Miami National Bank's entire interest as a creditor of Leisure Industries, Inc. plus a loan of operating capital. Plaintiff-appellant thereupon executed a 90 day promissory note in the sum of $280,000 bearing interest at 1/2% Above the prime rate at maturity (8%) and pledged as security therefor 8,500 shares of Thomas & Betts common stock. On the same day, plaintiff and Siegel also borrowed an additional $58,897.11, representing Leisure's overdraft indebtedness to the defendant bank, and signed a promissory note in that amount secured by the 8,500 shares of Thomas & Betts common stock. As consideration therefor, defendant Miami National Bank agreed to forbear the collection of the overdraft indebtedness for a reasonable time in order to improve plaintiff Davanzo's position as a secured creditor in the pending bankruptcy proceedings and in accordance therewith, defendant charged no interest on this note until October 29, 1970. Davanzo deposited the $280,000 in his personal checking account in defendant bank and then with a portion of these funds purchased from the defendant bank the notes executed by Leisure Industries, Inc. to the bank and the security and pledge agreements. The outcome of all of the above transactions was that plaintiff assumed the Miami National Bank's position as the secured mortgagor of Leisure, gained control and possession of all Leisure assets and stock, and extricated Leisure from its debts. By mid-November, more money was needed to keep Leisure going and on November 12, 1969 plaintiff-appellant borrowed $45,000 and signed a 90 day note in that amount and pledged as security an additional 2,500 shares of Thomas & Betts common stock. Davanzo deposited the $45,000 in his personal account and, as required by the defendant bank, from these proceeds repaid a $25,000 note of the F. M. Corporation, a subsidiary of Leisure organized for the sole purpose of financing engines to put into boats manufactured by Leisure. In December 1969, plaintiff borrowed $10,000 from the defendant bank, executed a 90 day $10,000 note and deposited the funds in his personal account. In January 1970, Davanzo and Siegel appeared at the bank but were unsuccessful in their attempt to borrow money for inventory financing. By August 1970, plaintiff brought a foreclosure suit against Leisure Industries, obtained a judgment of foreclosure, and bid on the Leisure assets for $25,000. Plaintiff never made payments on any of the notes and in October 1970 filed the instant complaint wherein he sought to rescind the notes on the grounds of fraud and usury and to enjoin the sale of his collateral stock. In response thereto, defendant bank answered and counterclaimed to recover upon each of the four notes. The cause proceeded to a non-jury trial at the conclusion of which the trial judge entered final judgment for defendant bank on its counterclaim and against the plaintiff on his complaint. The trial court found that plaintiff had failed to prove a usurious interest charge and that the usury laws are inapplicable to this purchase and sale transaction and further, that plaintiff owed the defendant a total of $518,440.85 on the four notes, including principal and...