Franchi v. Farmholme, Inc.

• Decision Date: 23 August 1983
• Docket Number: No. 10597,10597
• Citation: 191 Conn. 201,464 A.2d 35
• Court: Connecticut Supreme Court
• Parties: Sergio FRANCHI et al. v. FARMHOLME, INC., et al.

Page 35

464 A.2d 35

191 Conn. 201

Sergio FRANCHI et al. v. FARMHOLME, INC., et al.

No. 10597.

Supreme Court of Connecticut.

Argued April 7, 1983.

Decided Aug. 23, 1983.

[191 Conn. 202] Raphael Korff, Bridgeport, for appellants (defendants).

James F. Brennan, Jr., Groton, for appellees (plaintiffs).

Before HEALEY, PARSKEY, SHEA, GRILLO and BORDEN, JJ.

PARSKEY, Associate Justice.

On June 30, 1977, the defendant, Farmholme, Inc. (Farmholme), purchased a 200 acre estate in Stonington for $300,000, financed by $280,000 in mortgages. This property included a main house, a guest house, a caretaker's cottage and various outbuildings. Thereafter, around June, 1978, and for some time prior to September 6, 1979, the defendant John W.S. McCormick, a business associate of the defendant ¹ Lewis J. Payton, president of Farmholme, was permitted to occupy the premises with the obligation to pay the mortgage together with all costs and expenses incidental to the property. The first mortgage became delinquent. In March, 1978, foreclosure proceedings were instituted and a foreclosure by sale was ordered. In August, 1979, approximately one month before the scheduled foreclosure sale, the plaintiff, Sergio Franchi, met the defendants McCormick and Payton through one Anthony D. Pascucci, a mutual acquaintance of Franchi and McCormick. Discussions and negotiations looking to the purchase of the premises followed. On September 6, 1979, Farmholme, acting by its president, Payton, conveyed the premises by warranty deed to Franchi and Edward Traubner, Franchi's business manager, for $395,000. On February 13, 1980, the plaintiffs, Franchi and Traubner, granted Farmholme the option ² to repurchase for $475,600 by September 8, 1980, the entire premises sold except for a small parcel of unimproved road frontage. The defendants claim that the transaction was not a sale, but actually a loan and that the deed-option vehicle really masked, under coercive circumstances because of the defendant's financial problem, a usurious arrangement. At trial, they accordingly pressed, inter alia, their claim of an equitable mortgage. See Guilford-Chester Water Co. v. Guilford, 107 Conn. 519, 141 A. 880 (1928).

Under an arrangement between the parties, McCormick and his family continued to remain on the premises in the main house. Franchi occupied the guest home on occasion. Pursuant to an undertaking by McCormick to maintain the property, he hired Robert Conley as caretaker. Early in 1980, relations between McCormick and Conley became strained allegedly because of McCormick's refusal to pay $25,000 that Conley lent to him. Conley then became employed by Franchi as caretaker for the premises and was in his employ at the time of trial. Conley testified that McCormick "never terminated" his employment, but he was hired by Franchi to remain as caretaker when the latter learned he intended to leave. Although McCormick "constantly" asked Conley when he was going to leave, Conley did not tell him that he was now employed by Franchi because, Conley testified, Franchi's attorneys informed him they would notify McCormick by mail of Conley's employment by Franchi. McCormick wrote Conley telling him he expected him to leave and be off the premises by January 31, 1980. Conley did not leave and consulted legal counsel about recovering from McCormick the money he lent him.

On March 24, 1980, the defendants instituted eviction proceedings against Conley, and on May 13, 1980, they cut off the utilities to his house. On May 16, 1980, the plaintiffs sought and obtained an ex parte injunction from Judge Spallone, who Both parties, by subsequent pleadings including the defendants' special defense of equitable mortgage and their counterclaim, ⁶ claimed "title" to and exclusive possession of the premises. Both parties also sought an order directing the other to vacate the premises. Thereafter, the court, Hendel, J., granted the plaintiffs' motion to strike ⁷ the case from the jury docket.

                waived the requirement of a bond. 3  Thereafter, on June 12, 1980, the defendants filed their motion to dismiss the alleged cause of action because the "plaintiffs are not inhabitants of the state and no bond for prosecution or recognizance was taken before said process was issued, as required by the statutes (Sec. 52-185) ...."  The defendants also [191 Conn. 205] filed a motion to dissolve the temporary injunction.   On June 24, 1980, the plaintiffs, reciting that they were acting pursuant to Practice Book § 175 and General Statutes § 52-128, amended their writ, summons and complaint "by adding thereto the recognizance appended ...." 4  This amendment, which was filed within thirty days of the return date, 5 was filed prior to the court's decision denying the motion to dismiss.   The motion to dissolve the temporary injunction was also denied.   On June 30, 1980, the defendants claimed the case for the jury docket
                

The case was then tried to the court, Quinn, J., who found for the plaintiffs on their complaint and against the defendants on their counterclaim. In doing so, he observed in his memorandum of decision that the case "resolved itself to the issue of ownership of the premises and which party should be made to vacate the premises." The trial court found, inter alia, that the transaction was a sale of the real estate with an option to repurchase that had expired, that the sale "was executed at arms length with both parties represented by attorneys," and that the defendants had not sustained their burden on their special defense of an equitable mortgage. The plaintiffs were adjudged to have the right of exclusive ownership and possession of the premises as against the defendants. This appeal followed.

On appeal, the defendants have claimed a number of errors in the trial court. They are: (1) that the original writ, summons and complaint presented by the plaintiffs to Judge Spallone was void ab initio and furnished no legal basis for issuing an injunction or any order; (2) that the striking of the defendants' timely claim for the jury We first take up the claim in which the defendants attack jurisdiction. See Salamandra v. Kozlowski, 173 Conn. 136, 139, 376 A.2d 1103 (1977); Atwood v. Regional School District No. 15, 169 Conn. 613, 616, 363 A.2d 1038 (1975). They argue that General Statutes § 52-185 requires a bond for prosecution "before process is signed, if the plaintiff is not an inhabitant of this state." It appears that both plaintiffs were from California. ⁸ The plaintiffs' brief admits that the process initially contained no recognizance. The defendants claim that because the original writ, summons and complaint submitted to Judge Spallone did not comply with the statute, the writ was "absolutely invalid and void ab initio because of [the] lack of bond for prosecution or recognizance before it was signed and therefore the court and Judge Spallone were without jurisdiction." We do not agree.

                docket denied them their constitutional right to a trial by jury;  and (3) that the transaction between the parties involved an equitable mortgage as a matter of law.   An additional claim regarding an evidentiary ruling we do not consider for failure of the defendants to comply with Practice Book § 3060F(c)(3).   The remaining claims are subsumed under the three categories set forth above
                

Section 52-185(a) provides in part that "[i]f the plaintiff in any civil action is not an inhabitant of this state ... the plaintiff shall, before the process is signed, enter into a recognizance to the adverse party with a financially responsible inhabitant of this state as surety ... that the plaintiff shall prosecute his action to effect and answer all costs for which judgment is rendered against him...." Initially, the plaintiffs did not comply with this provision. After the defendants filed their motion to dismiss, but before a decision thereon, the plaintiffs filed a recognizance in the statutory form. See General Statutes § 52-185(b). They did this pursuant to General Statutes § 52-128 and Practice Book § 175. This statute permits the plaintiff to "amend any defect, mistake or informality in the writ, complaint, declaration or petition ... within the first thirty days after the return day ...." The Practice Book rule is to the same effect. Section 52-185(d) ⁹ provides that "[i]f there has been a failure to comply with the provisions of this section, or if the authority signing a writ has failed to certify in accordance with any statute or rule that he has personal knowledge as to the financial responsibility of the plaintiff and deems it sufficient, the validity of the writ and service shall not be affected unless the failure is made a ground of a plea in abatement...." ¹⁰ The defect in question was, in fact, made the ground of a motion to dismiss. This subsection of the statute also provides that "[i]f such plea in abatement is filed and sustained or if the plaintiff voluntarily elects to cure the defect by filing a bond, the court shall direct the plaintiff to file a bond to prosecute in the usual amount. Upon the filing of such bond, the case shall proceed in the same manner and to the same effect ... in all other respects Next, we take up the defendants' claim that the court erred in striking their timely claim of the case for the jury, thus denying them, they argue, their constitutional right to have questions of fact in this case determined by a jury. The plaintiffs' first response to this claim is that we should not review this claim because the defendants did not take a timely appeal "from this interlocutory but final decision, nor did they preserve their right to do so." We disagree with the claim that the striking of the case from the jury docket constituted a final judgment to which the requirements of Practice Book § 3001 would apply. A ruling granting a motion to strike a case from the jury list does not "conclude the rights of the parties so that further...