International Realty Associates v. Mcadoo

• Decision Date: 10 January 1924
• Citation: 87 Fla. 1,99 So. 117
• Parties: INTERNATIONAL REALTY ASSOCIATES, Inc. v. McADOO et al.
• Court: Florida Supreme Court

99 So. 117

87 Fla. 1

INTERNATIONAL REALTY ASSOCIATES, Inc. v. McADOO et al.

Florida Supreme Court, Division B.

January 10, 1924

Suit by the International Realty Associates, Incorporated, against W D. McAdoo and wife and another. From and order sustaining demurrer and dismissing the bill, plaintiff appeals.

Affirmed.

Syllabus by the Court

SYLLABUS

Power of equity to enforce cancellation of contracts supplementary to powers of law courts, where unusual equity exists. The power of a court of equity to enforce the cancellation of a contract, though well recognized in character and application, is very exceptional. Its purpose is to supplement the powers of the courts of law when there exists unusual equity of a settled and well-recognized kind.

Equity will not interfere with freedom of contract nor substitute itself for legal remedies. In compelling rescission equity will not interfere with the freedom of contract or substitute itself for legal remedies, even though bad and improvident bargains have been entered into. The grounds on which equity interferes for cancellation or rescission are distinctly marked, and every case proper for this branch of its jurisdiction is reducible to a particular head.

Grounds on which equity will enforce cancellation of contracts stated. These grounds are primarily fraud, mistake, turpitude of consideration, and circumstances entitling to relief on the principle of quia timet; and generally they do not include inadequacy of price, improvidence, surprise, or mere hardship.

Rescission not granted solely for breach, in absence of independent ground for equitable interference. The rule is well settled in this country that cancellation or rescission will not be granted solely for breach of contract, in the absence of fraud, mistake, undue influence, multiplicity of suits, cloud on title, trust, or some other independent ground for equitable interference.

Awards favored; equity not required to enforce awards resulting from arbitration. There is no law or rule by which courts of equity are required to enforce awards resulting from arbitration; at the same time they have many times worked to the material advantage of parties litigant and are looked on with favor by the courts. Appeal from Circuit Court, Pinellas County; M. A McMullen, judge.

COUNSEL

Crockett Owen and E. M. Oliver, both of St. Petersburg, for appellant.

John F. Burket, of Sarasota, and Macfarlane & Macfarlane, of Tampa, for appellees.

OPINION

TERRELL J.

W. D. McAdoo and wife, Nina McAdoo, made a contract with International Realty Associates, Incorporated, the provisions of which necessary to be considered here are as follows:

'This agreement, made and entered into this 22d day of October, A. D. 1920, by and between W. D. McAdoo joined by his wife Nina McAdoo, of St. Petersburg, Florida, parties of the first part, hereinafter called the sellers, and the International Realty Associates, Inc., a corporation under the laws of the state of Delaware, party of the second part, hereinafter called the buyer, witnesseth:

'That for and in consideration of the sum of one dollar paid by the buyer to the sellers, the receipt of which is hereby acknowledged, together with the covenants and agreements hereinafter set out, the respective parties to this instrument agree as follows:

'First. Said buyer hereby contracts to handle the development and sale of the property of the sellers lying in Pinellas county, Florida, known as St. Petersburg Beach, and more particularly described in paragraph third of this agreement, using its best efforts and facilities to realize the largest amount possible for said property, and to accomplish same as expeditiously as practicable.

'Second: Said seller agrees to deliver good and sufficient warranty deeds to the portions of the said property as sold from time to time by the said buyer, when requested by it and deeds duly prepared are presented for execution, the property so sold to be free from incumbrance, and the grantee in such deeds to be supplied and named by the said buyer, or its duly authorized agents.'

The contract further describes in detail the lands to be sold, provides for a full and complete abstract showing a merchantable title thereto in the seller, conveys certain personal property to the buyer, and authorizes the buyer to lease certain property of the seller. The contract is for a period of seven years, with the right to terminate same on the part of sellers on conditions therein named. The price, terms, and conditions of sale are also provided for, as is the manner of disposition of the receipts.

It is further provided that the buyer shall pay all taxes, assessments, insurance, and carrying charges against said property, use certain receipts for improving and remodeling buildings thereon, make other expenditures for permanent improvements, and make settlement with the seller every thirty days or oftener if desirable. No sales can be made to negroes or Cubans, the said contract to be binding on the heirs, executors, administrators, successors or assigns of the parties thereto, and the seller agrees to at once form a holding company or corporation to take title to property covered by said contract for the purpose of executing deeds and doing such other things as may be necessary to carry out the purpose and intent of the same. The books and accounts of the buyers to be at all times subject to the inspection of the seller.

Paragraph 15 of said contract is as follows:

'Should any question arise as to the interpretation of this contract between the parties hereto, the said matter of dispute shall be referred to three arbitrators, one selected by each of the parties to this contract, and a third to be selected by the first two, and the decision of any two of said arbitrators to be binding upon all parties to this contract. Should either party fail or refuse to appoint an arbitrator within ten days after written notice of disagreement and request for arbitration, then it is agreed by the parties hereto that the judge of the county court of Pinellas county shall appoint such arbitrator for and on behalf of such party, which such arbitrator shall for all intents and purposes act the same as though appointed by such delinquent party.'

On November 11, 1921, International Realty Associates, Incorporated, the buyers, complainants below, filed their bill in equity praying: (1) That said contract be rescinded and canceled; (2) for an equitable lien on all the property described in said contract for various amounts enumerated in the bill of complaint; and (3) for an accounting. The reasons for the prayer, as stated in paragraphs 11 and 12 of the said bill of complaint, are as follows:

'(11) That on the 28th day of October, 1921, orator presented to said W. D. McAdoo deeds to lots 1, 3, and 6, block 86, lot 8, block 43, lot 9, block 44, lots 7 and 9, block 45, and lot 7, block 57, St. Petersburg Beach, according to the plat, original of Exhibit C, and requested him to execute same so that they might be delivered to the purchasers. This request was repeated on the 29th day of October, the 31st day of October, the 1st day of November, and on the 4th of November. That on the 10th of November orator tendered to said McAdoo the cash, lawful money of the United States, for his percentage of the cash received from the sale of the eight lots above described in this paragraph, and tendered him mortgages for which he might select his percentage of such mortgages. That on each occasion when such request was made said W. D. McAdoo failed and refused to deliver any of said deeds. That on the last date when such request and tender were made he did not accept such tender and did not deliver said deeds, whereupon orator informed said McAdoo that such failure to deliver said deeds was a breach of the contract between them.

'(12) Orator avers that by reason of said breach of contract by said McAdoo it has the right to rescind said contract original of Exhibit B, and it does hereby elect to rescind the same, and orator hereby offers and agrees to restore to said W. D. McAdoo all of the subject-matter of said contract which has not been sold in accordance therewith and to make defendants a release of record from said contract upon the payment by said defendants to orator of the amount expended by it for permanent improvements, the amounts it advanced to the purchaser of the three lots 1, 3, and 6 in block 86, for building thereon, the additional amount of $4,500 expended by said purchaser in erecting the buildings on said...