Home Development Co. of St. Petersburg v. Bursani, 33242

• Decision Date: 14 July 1965
• Docket Number: No. 33242,33242
• Parties: HOME DEVELOPMENT COMPANY OF ST. PETERSBURG, Inc., and Roy J. Deeb and Marilyn K. Deeb, his wife, Petitioners, v. Rudolph BURSANI and Lillian Bursani, Individually and as husband and wife, Respondents.
• Court: Florida Supreme Court

Page 113

178 So.2d 113

HOME DEVELOPMENT COMPANY OF ST. PETERSBURG, Inc., and Roy J. Deeb and Marilyn K. Deeb, his wife, Petitioners, v. Rudolph BURSANI and Lillian Bursani, Individually and as husband and wife, Respondents.

No. 33242.

Supreme Court of Florida.

July 14, 1965.

Rehearing Denied Sept. 23, 1965.

Kiernan & Reams, St. Petersburg, for petitioners.

Nelson, Beckett & Nelson, St. Petersburg, for respondents.

ROBERTS, Justice.

The cause is again before the court on conflict certiorari, to review a decision of the District Court of Appeal, Second District, 159 So.2d 244, 176 So.2d 100, which had affirmed a decree of the Circuit Court in and for Pinellas County.

This court, feeling that probable jurisdiction had been made to appear, set the cause for oral argument on the questions of jurisdiction and merits. Following the argument we were in doubt as to conflict jurisdiction because we did not have the benefit of an opinion agreed to by the majority of the District Court, and thus released jurisdiction to that court, 168 So.2d 131, inviting it to adopt an opinion setting forth the theory and reasoning upon which its decision had been reached, and posing particularly three questions for consideration, vez.:

'(1) Did the trial court commit error in entering a money judgment in view of the contract which apparently provided for the purchase of certain shares of stock by barter of corporate assets rather than in dollars?

'(2) Did the trial court commit error in entering a money judgment against certain stockholders of the corporation for a corporate obligation when no finding of fraud had been made?

'(3) Did the trial court commit error by including in its calculation of a money judgment a substantial item representing anticipated future profits on certain unsold assets of the corporation, against a contention that the computation of such future profits on the prospective sale of such unsold assets appear, on cursory examination of the Master's report, to be speculative and conjectural and apparently predicated upon past profits of past transactions of the same corporation and in different economic climates?'

The District Court of Appeal in a per curiam order and without an opinion did on June 9, 1965 state as to the three questions above mentioned, 'we did consider those questions, answering them in the negative'. While the matter was pending in remand with the District Court, this court determined that we do have jurisdiction to review a decision of the District Court of Appeal without opinion where the legal result is such that it creates a conflict with another opinion of this court or with a decision of a different court of appeal. See Foley v. Weaver Drugs, Inc., Fla., 168 So.2d 749. In this posture, we have no alternative but to proceed with our constitutional duty to review the cause. We conclude for the reasons hereinafter stated that in affirming the decree of the lower court, the legal effect was to disregard and conflict with the many decisions of this court--and the universal rule--to the effect that a court is not authorized to rewrite a contract of the parties, and thus we have conflict jurisdiction. These decisions will be referred to in more detail upon the development of the history of the litigation as shown by the record and the facts as found by the special master and stated in his report, which findings of fact were adopted and confirmed by the trial court as the findings and order of that court, thus becoming a part of the record proper.

The history and background are set forth in our opinion remanding the cause to the District Court, appearing in Home Development Co. v. Bursani, Fla., 168 So.2d 131, and a part of which for convenience we now repeat:

'The litigation arose out of a disagreement between the petitioner Deeb and the respondent Bursani, each of whom (with their respective spouses) are the owners and holders of 50 percent of the stock of the petitioner corporation, Home Development Company of St. Petersburg, Inc. This corporation was organized by the parties in 1957 for the purpose of building houses for sale for a profit, the parties having previously engaged in a similar joint venture in the name of a corporation wholly owned by Mr. Deeb. The charter of the newly formed corporation provided, in Article III thereof, for the issuance of 100 shares of common stock and specifically restricted the sale thereof, as follows:

"* * * the same are to be restricted as to sale, requiring the owner and/or holder of such shares to offer the same in writing to the corporation at book value or market value, whichever shall be higher in dollar value and requiring the corporation to purchase same or to distribute to such stockholder assets of the corporation as purchase price for such stock. The fair market value of such assets as distributed shall be equal to the dollar purchase price of such stock as provided for herein. The corporation shall purchase said stock herewith within thirty days of the offer as provided for herein or the holder thereof may sell the same to any person or take such legal action as may be necessary to enforce this provision.'

'The parties also entered into a stock-purchase agreement, at the time of the formation of the corporation, by which the Bursanis agreed to sell to the corporation, at the request of the Deebs, their shares of stock 'in accordance with the procedure set forth in ARTICLE III, Section 1, of the corporation charter;' the Deebs agreed that, at the request of the Bursanis, they would 'cause the capital stock of the [Bursanis] to be purchased pursuant to ARTICLE III-Section 1, of the corporation charter;' and the corporation agreed that, at the request of either the Deebs or the Bursanis, it would comply with the provisions of Article III of the charter.

'About a year and a half and some thirty-four houses later, the parties came to a parting of the ways; and, after an exchange of correspondence in which Mr. Bursani's attorney advised Mr. Deeb that he had until December 17, 1959, to make a proposal to purchase the Bursanis' stock, otherwise he would advise Mr. Bursani to bring a stockholder's suit for an accounting etc. to dispose of Mr. Bursani's holdings in the corporation, and a reply by Mr. Deeb's attorney to the effect that the corporation was exercising its stock purchase rights as of December 17, 1959, and would proceed 'with all due dispatch' to determine the value of the Bursanis' stock 'according to the provisions of the charter', the instant suit was filed by the Deebs and the corporation, as parties plaintiff, against the Bursanis, praying for injunctive relief against the allegedly damaging interference by Mr. Bursani with the corporation's business affairs and 'for such further orders as may be required for the enforcement of the contract for the sale by [the Bursanis] of their stock in the plaintiff corporation to the plaintiff corporation.'

'The Bursanis filed an answer and counterclaim, denying the alleged interference, alleging that they were ready and willing to convey their stock to the corporation upon the payment to them of the 'actual book value' of the stock after the same was ascertained 'after a full and complete accounting', and counterclaiming for amounts allegedly due them on promissory notes of the corporation, the use by the corporation of a truck owned by them, and other items.

'The cause was referred to a Special Master to hear the testimony to 'state' an accounting, to make findings of fact and draw conclusions of law, and report the same and his recommendations to the court. Although voluminous testimony was heard by the Master, the salient facts are few. As shown by his report, an independent audit of the corporation's books and records was made, which showed corporate assets--consisting of cash, notes and accounts receivable, contracts for the sale of houses, unsold houses, and vacant lots--having a net worth of $36,882.76 as of December 17, 1959. The unsold houses (nine of them) were shown on the books at cost (some $95,000.00) without a projection of estimated profit.

'Based on this audit, the Deebs offered on behalf of the corporation, as the purchase price of the Bursanis' stock, certain of the contracts for the sale of houses previously sold--having the equivalent in dollar value, according to the brief of the petitioners, of more than one-half of the net worth of the corporation as shown on the books and audits as of December 17, 1959. This offer was declined by the Bursanis--and rightly so, according to the Special Master. The Master found that 'in arrogating unto themselves all of the completed but unsold houses and all of the other assets except these contracts for sale, [the Deebs] were under the circumstances basically unfair and inequitable to Mr. and Mrs. Bursani in that Bursani's efforts also aided in the production of these assets'; that the contract 'contemplated a distribution of the assets in existence at the time of the exercise of the option to purchase'; that the Deebs and the corporation had breached the stockpurchase agreement; and that the Bursanis were entitled to a money decree for damages 'based upon the reasonable value of the assets which they would have received if an equitable distribution of assets had been made in accordance with the contract.'

'He recommended that a money decree be entered against the corporation and the Deebs individually, and impressed as an equitable lien against the corporate assets, in the amount of $34,694.98--being one-half of the net worth of the corporation as shown by the audit mentioned above and one-half of the estimated profit on the nine houses that were unsold on December 17, 1959 (estimated to be $16,118.20 after a 30% tax deduction) and the remainder (some $8,000.00) being sums found to be due and owing to Mr. Bursani on account of the promissory notes and one other item of indebtedness. He recommended that the Bursanis...