Flagler Finance Corporation v. Therrell

• Decision Date: 02 March 1934
• Citation: 159 So. 868,118 Fla. 596
• Parties: FLAGLER FINANCE CORPORATION et al. v. THERRELL et al.
• Court: Florida Supreme Court

159 So. 868

118 Fla. 596

FLAGLER FINANCE CORPORATION et al. v. THERRELL et al.

Florida Supreme Court, Division A.

March 2, 1934

On Rehearing Jan. 24, 1935.

Suit by J. H. Therrel, as liquidator of the Trust Company of Florida as trustee, and Roscoe Martin, as substitute trustee, against the Flagler Finance Corporation and others. From orders striking objections to confirmation of master's sale of property under mortgage foreclosure and confirming master's report of sale, named defendant and a certain other defendant appeal.

Affirmed.

ELLIS P.J., dissenting. Appeal from Circuit Court, Dade County; Worth W. Trammell, judge.

COUNSEL

Loftin Stokes & Calkins, of Miami, for appellants.

Richard H. Hunt, of Miami, for appellees.

OPINION

ELLIS Justice.

This is the third time this case has been before the Supreme Court. See Sammons v. Trust Co. of Florida, 102 Fla. 711, 136 So. 442; Id., 105 Fla. 547, 141 So. 743.

On the 4th day of August, 1932, notice of a master's sale of the property pursuant to the final decree of foreclosure was filed. The notice stated that the sale would be made on September 5th following.

On the 3d day of September another notice was filed that the sale would be made on October 3, 1932. The first notice was entitled Trust Company of Florida, as Trustee, v. A. L. Sammons et al.; the second notice was entitled J. H. Therrell, as Liquidator of Trust Company of Florida, as Trustee, v. A. L. Sammons et al. Proof of publication of the first notice appears in the transcript. That notice was dated August 6th, but seems to have been filed on the 4th. It appears a second time in the transcript immediately following proof of its publication.

The master made a report of the sale on September 6th, in which it was stated that pursuant to the 'final decree,' and as set forth in the advertisement of sale, he offered for sale 'at public outcry' the property mentioned in the decree. The notice of sale stated that the sale would be made 'at public outcry to the highest and best bidder for cash.'

The report of the sale does not state that the property was sold to the 'highest and best bidder for cash,' but it states that the property was sold to J. H. Therrell, as liquidator of the Trust Company of Florida, 'for the sum of $12,000.00 the same being the highest bid therefor.'

The Flagler Finance Corporation and North American Realty Company, the former being one of the appellants in the first two appeals, objected to the master's report of the sale on the ground that it stated that the master had sold the property 'together with * * * all fixtures, furnishings and furniture located in the building or buildings situated on said land'; that he should have reported that he 'did not sell any of the property located in said building except such as already belonged to A. L. Sammons and wife at the time of the execution of the mortgage and/or that was purchased thereafter by them and placed in said building'; that the master did not report that he received cash for the sale or in what manner the plaintiff purchaser intends to pay for the property; that the North American Realty Company is the owner of seven of the bonds secured by the mortgage foreclosed of the par value of $3700, and 'demands the right to have its pro rata share of the proceeds arising from the said sale distributed to it in cash before the sale is confirmed'; that the North American Realty Company bid the sum of $11,000 in cash for the property, which bid was the highest and best cash offer made for the property, unless the plaintiff purchaser intends to pay for its bid for said property in cash.

There is an affidavit by J. W. Bullock, president of Flagler Finance Corporation, in support of the facts alleged in the objections, but it also states that the solicitor for the plaintiff announced at the sale that the mortgage did not constitute a lien on any personal property located in the building upon the land described except such as had been owned by A. L. Sammons and wife, the mortgagors, at the time of the mortgage, and personal property that had been purchased and installed by them in the building.

There was a motion to strike the objections; one ground being that the objector was not a party to the cause, and, if it is a beneficiary, it is represented by the complainant who was trustee for the bondholders. That motion was followed two days later by one for confirmation of the sale.

An order was made on motion by complainant that J. H. Therrell, as liquidator of the Trust Company of Florida, be substituted as complainant in place of the company.

The chancellor sustained the motion to strike the objections to the master's report of sale. The master's report of sale was then amended by him to show that at the sale only the fixtures, furnishings, and furniture located in the building purchased by the mortgagor and placed therein were sold.

The North American Realty Company then interposed an objection to the confirmation of the sale supported by the affidavit of J. W. Bullock, president of the corporation, in which he affirmed that prior to the sale J. Warren Smith, agent for Therrell, as liquidator, said to Bullock that Therrell had no money with which to pay the costs or expenses of the suit or to pay the bondholders their pro rata share of any bids made by him at the sale, and that if it became necessary to 'raise any money for said purpose' the liquidator would have to ask the court to offer the property for sale to other parties for cash; that the property was in need of repairs; that the liquidator had no money with which to make rpairs, and, unless the property was repaired, it would rapidly deteriorate and become of less value; that the insurance against loss by fire and windstorm would be canceled on confirmation of the sale, and the liquidator has no money with which to pay insurance premiums; that as the mortgage does not incumber the personal propety and furnishings in the hotel the owner of it will remove the furniture if the sale is confirmed. It was alleged that in such case the hotel could not be operated as there was no money available in the hands of the liquidator to refurnish the hotel, nor did he have authority to do so; that the state, county, and city taxes on the property had not been paid for the year 1931, and the liquidator was without means to pay the same; that if the sale is confirmed the North American Realty Company will not be paid in cash for the bonds held by it, its pro rata of the amount for which the property was sold, but would be required to take its pro rata in the form of an interest in the property as a 'joint tenant,' or otherwise, with other bondholders, and it will be deprived of its property by the sale of it for taxes, as the company had no way of compelling other bondholders to contribute money to the payment of taxes or the upkeep of the property.

The North American Realty Company prayed that the court would set aside the sale and order another to be made to the 'highest bidder for cash, with permission to any of the holders of the bonds secured by said mortgage, to bid thereat, and to credit on their said bonds the pro rata value of the bonds held by them, paying the balance of their said bids in cash.'

The chancellor confirmed the master's report of the sale on September 20, 1932. Then Roscoe Martin was by order of the court made a party plaintiff in the cause as substitute trustee.

The Flagler Finance Corporation and North American Realty Company took their appeal from the order of September 16th, striking their objections to the confirmation of the master's sale and from the order of September 20th confirming the master's report of the sale.

The above lengthy statement is made to show as well as may be the circumstances in which the sale was made and the interest of the parties and the manner in which the point presented here for determination is made.

The mortgage upon which foreclosure proceedings were brought was given to secure certain bonds of which 139 were issued and disposed of and 9 were paid. The complainant trustee has 108 of the bonds. See Sammons v. Trust Co. of Florida, first case, supra. The Flagler Finance Corporation has seven of the bonds which leaves 15 of the bonds, denominations unknown, unaccounteo for. The trustee, which was the Trust Company of Florida, has become bankrupt and a liquidator, an officer of the comptroller's department, took possession of the assets and charge of the trust properties committed to it. See Power v. Amos, 94 Fla. 411, 114 So. 364; Power v. Chillingworth, 93 Fla. 1030, 113 So. 280; Campbell v. Vining, 101 Fla. 939, 133 So. 555; Wasson Bond & Mortgage Co. v. Therrell (Fla.) 151 So. 497.

A successor trustee was named by the court, so the administration of the trust devolves now upon an officer of the court and not upon the representative from the comptroller's office.

At the sale which was ordered to be made at public outcry to the highest and best bidder for cash the liquidator bid $12,000 for the property, but he has no money in his hands to pay the price bid, nor has he any money with which to pay the costs of the proceedings and solicitor's fees and expenses of sale. No authority exists in the trust deed for an assessment by the trustees upon the bondholders to pay the costs and expenses of the sale. The mortgage was given to secure an indebtedness aggregating $60,000. Nine bonds have been paid and 22 are outstanding in the hands of investors including the 7 owned by the Flagler Finance Company.

The master's report states that 'out of the amount so bid for said property, if and when this report shall be confirmed, I will disburse and pay the sums specified in said decree.' The decree allowed the sum of...