Fisher v. Grady

• Decision Date: 23 December 1937
• Citation: 131 Fla. 1,178 So. 852
• Parties: FISHER v. GRADY et ux.
• Court: Florida Supreme Court

178 So. 852

131 Fla. 1

FISHER v. GRADY et ux.

Florida Supreme Court, Division B.

December 23, 1937

Rehearing Denied Jan. 26, 1938.

Suit by May F. Fisher, a free dealer, against Don B. Grady and wife for an accounting, for a decree adjudging the named defendant to hold certain property as trustee for plaintiff, for the appointment of a receiver, and for additional relief in conformity with equity. From a decree of dismissal, plaintiff appeals.

Decree reversed for further proceedings.

BUFORD J., dissenting.

On Petition for Rehearing. Appeal from Circuit Court, Pinellas County; M. A McMullen, Judge Pro hac vice.

COUNSEL

W. B Dickenson, of Tampa, and Erle B. Askew, of St. Petersburg, for appellant.

James F. Sikes and J. Carl Lambdin, both of St. Petersburg, and B. K. Roberts and H. H. Wells, both of Tallahassee, for appellees.

OPINION

CHAPMAN Justice.

The parties to this suit in this opinion will be referred to as they appeared in the court below as plaintiff and defendants. On September 25, 1935, plaintiff filed in the circuit court of Pinellas county her bill of complaint against the defendants, alleging, among other things, that on February 20, 1929, May F. Fisher acquired title to the west 50 feet of the Poinsettia Hotel located in the city of St. Petersburg, Fla., and on April 29, 1927, plaintiff's predecessor in the chain of title, Mrs. Roswell M. Marshall, executed a deed of trust to secure the payment of $115,000 of bonds against the property. Mrs. May F. Fisher and Mrs. Minnie Alice Marshall, also known as Mrs. Roswell M. Marshall, are sisters. The 113 feet lying east of the tract involved in this suit is a part of the land upon which the Poinsettia Hotel stands, and the east 113 feet likewise was encumbered by a first mortgage to the Metropolitan Life Insurance Company on the Poinsettia Hotel in the sum of $96,000. The hotel property was constructed to be operated as one unit. The east 83 feet contained, on the ground floor, a part of the lobby of said hotel and three storerooms, and three floors above and 64 guest rooms. The west 50 feet, on the ground floor, contained a part of the lobby, the men's washrooms, elevator, stairs, the basement, the heating plant, and two storerooms, including the kitchen of the Coffee Shop, and the electric, plumbing, and steam lines.

It was to the mutual interest of the sisters to preserve the ownership and maintain the operation of the hotel property. Don B. Grady, was a nephew of the two sisters whom they brought to Florida from Pennsylvania in 1921 and gave employment in said hotel as a room clerk until 1924, when he was made manager of the hotel at a salary of $300 per month, and continued in said capacity until October, 1933. The hotel under average normal conditions produced, annually, a large income, with the exception of the depression period. On December 9, 1931, plaintiff became ill and went to a hospital and continued in bad health until sometime in 1932, or the early part of 1933. The defendant Don B. Grady, as manager, operated the hotel, collected rents, income, revenue, and profits of the hotel building and commercial houses, and these activities continued during the bad health of May F. Fisher.

It is alleged that Don B. Grady, defendant, induced Senator N. U. Bond to furnish the money necessary to buy at 25 cents on the dollar all the bonds amounting to $115,000 secured by the trust deed involving the west 50 feet for the total sum of $30,000, the aggregate amount of the bonds and interest then due came to $130,000. It further alleges the existence of a written agreement with the defendant and N. U. Bond, after the puchase of the bonds, to institute foreclosure on the trust deed, acquire a deed to the property at the master's sale, and convey the property to the defendant and received a purchase-money mortgage; that part of plaintiff's money was used in refinancing the said property.

Pursuant to the agreement, the master's deed dated June 30, 1934, was taken by Bond and on the 1st day of July, 1934, N. U. Bond conveyed the property involved in this suit to the defendant and took back a purchase price mortgage in the sum of $33,000. The difference of the sum of $30,000 paid for the bonds and the $33,000 face of the purchase price money mortgage, or the sum of $3,000, went to N. U. Bond in the form of a bonus. The plaintiff had no knowledge of the agreement between the defendant Grady and N. U. Bond about the purchase of the mortgage bonds for the sum of $30,000, or the taking of title at the foreclosure sale in N. U. Bond, and a conveyance of said property to defendant Grady. The fact that Grady was the agent of the plaintiff, and manager of the hotel, and operating the same for the plaintiff at the time defendant Grady entered into the agreement with N. U. Bond to purchase the outstanding bonds on the hotel, and the time of taking title in N. U. Bond and the conveyance thereof to the defendant and the defendants executing a purchase price mortgage to Bond in the sum of $33,000, that by operation of law, the defendant to this suit held the title to the west 50 feet as trustee for the plaintiff. The defendant Grady failed to account to plaintiff for moneys collected belonging to her and he is asserting title and claims the ownership of the lands and building in his own right, and not as trustee for plaintiff. The defendant violating his obligations and duties as the agent of the plaintiff in acting against her interest and in taking title to the property under these conditions and circumstances is in law a fraud.

The defendants claim possession and ownership of the west 50 feet of the property and, at the time of the filing of the bill, were operating the hotel under an arrangement with the Metropolitan Life Insurance Company as to the east 113 feet; that he has collected profits, revenues, and income from the hotel and commercial houses and asserts dominion in his own rights as owner and lessee, while in truth and in fact he has been at all times the agent of the plaintiff, and he has appropriated a large sum of money from these different sources approximating $25,000, and he has been paid $45 per week by plaintiff as a salary for several years, and that an accounting of all moneys received by the defendant should be made to the plaintiff. The prayer of the bill is for: (a) A complete accounting; (b) that Don B. Grady be decreed to hold the property as trustee for plaintiff; (c) appointment of a receiver; (d) additional relief in conformity with equity.

The defendants appeared and filed a motion to dismiss the bill of complaint and the record here fails to recite an order made by the lower court on the motion to dismiss, but the parties and counsel consider the same as having been overruled and denied.

On November 1, 1935, Don B. Grady and wife, Mary Grady, filed their answer under oath to the bill of complaint. The answer denied the plaintiff was the owner of the west 50 feet of the Poinsettia Hotel but it was owned by her sister, Minnie Alice Marshall, and that he had operated the hotel under a copartnership agreement between Minnie Alice Marshall and May F. Fisher dated November 1, 1922; that Minnie Alice Marshall, in 1928 and prior thereto, was heavily involved, with numerous suits pending; and judgments had been entered or would be entered against her on her then outstanding obligations, and under these circumstances, and conditions, on October 24, 1928, she conveyed the west 50 feet to the S. & F. Holding Company, and on the 20th day of February, 1929, the S. & F. Holding Company conveyed the property to May F. Fisher, and the conveyance so made was without consideration, and as a matter of law plaintiff held the title thereto in trust for the use and benefit of Minnie Alice Marshall; that May F. Fisher admitted to others the holding of the title involved in this suit as trustee for her sister. The property at the time of conveyance had bonds outstanding in the sum of $115,000, bearing interest at 8 per cent. and maturing in 1932. That the east 83 feet were encumbered by a $90,000 mortgage and that a foreclosure was instituted in the federal court, feceiver appointed, and placed in charge of the property under the suit to foreclose mortgage on the east 113 feet thereof.

The answer denied that the plaintiff operated the hotel in her own right, but averred it was operated by a copartnership agreement in writing and signed by plaintiff and her sister when the defendant managed the business from 1924 until October 1, 1933, and received a salary of $3,600 per year. The answer admitted the plaintiff became ill and went to a hospital in December, 1931, but denies that she was unable, because of illness, to look after her business affairs; that she did not pay interest, taxes, or insurance upon the property and otherwise dissipated the income and assets, and no sinking fund was ever provided to retire the bonded indebtedness and that plaintiff was in bad financial condition and insolvent; that plaintiff continued to reside in the hotel until a receiver was appointed by the federal courts, when she advised defendant she had no interest in the property, and had no intention to defend the mortgage foreclosure or make any effort to refinance the property, or hold the same, and the defendant was at liberty, not only to operate the hotel, but he could have whatever amount or interest of the mortgaged property salvaged from the mortgaged property, and pursuant to this agreement defendant obtained a lease from the receiver as to the east 83 feet for the season beginning October 15, 1933, and ending May 15, 1934, for a rental value of $2,000; that he owned the 50 feet of the hotel and with the leasing agreement from the Metropolitan Life...