Luria v. Bank of Coral Gables

• Decision Date: 14 July 1932
• Citation: 142 So. 901,106 Fla. 175
• Parties: LURIA v. BANK OF CORAL GABLES.
• Court: Florida Supreme Court

142 So. 901

106 Fla. 175

LURIA v. BANK OF CORAL GABLES.

Florida Supreme Court

July 14, 1932

Commissioners' Decision.

Error to Circuit Court, Dade County; Paul D. Barns, Judge.

Action by A. L. Luria against the Bank of Coral Gables, a corporation. To review an order granting a new trial after verdict for plaintiff, plaintiff brings error.

Order affirmed, and cause remanded, with directions.

COUNSEL

Ross Williams, of Miami, and Groman & Rapoport, of Allentown, Pa., for plaintiff in error.

Paul D McGarry, John J. Lindsey, And J. C. Sullivan, all of Miami for defendant in error.

OPINION

DAVIS C.

The plaintiff in error, whom we will hereafter refer to as the plaintiff, instituted an action at law against one E. A Fowler and the Bank of Coral Cables, a Florida corporation. It is alleged in the declaration, in substance, that Fowler on March 1, 1927, being indebted to the plaintiff, as one transaction constituting a composite liability, did make and deliver to the plaintiff six first mortgage deeds, each securing the sum of $5,000, and each of said sums being represented by four promissory notes in the sum of $1,250 each; that on March 3d said mortgages were duly recorded; that on March 15, 1927, Fowler and his wife conveyed the land described in said mortgage deeds by a warranty deed to the Bank of Coral Gables, and that the said deed was accepted by the said bank; that said deed contained the following provision:

'This conveyance is made subject to encumbrances of record to be assumed and paid by the Grantee herein when legally due and demandable,' and that by reason thereof the said bank became responsible for the payment of said obligations as the same became or shall become legally due and demandable; that the maker of said notes defaulted in the payment of semiannual interest after September 1, 1927, and that it is provided in each of said notes and also in said mortgages that, if the same have to be collected upon the demand of an attorney, the maker thereof is to pay attorney's fees reasonably incurred or paid at any time by the mortgagee; that the plaintiff has placed the said obligations in the hands of attorneys for collection, and that, by reason thereof, the defendants are also indebted to plaintiff for reasonable attorney's fees as aforesaid. The said notes and mortgages were attached to and made a part of the declaration, and the mortgages contained a clause providing for the acceleration of all payments, in the event of nonpayment of any of the sums falling due within thirty days after said payments severally became due and payable. The cause was dismissed without prejudice as to the defendant E. A. Fowler. The Bank of Coral Gables interposed pleas to the declaration in substance as follows:

(1) That it never promised as alleged.

(2) That it did not make, execute, issue, or assume the said obligation and indebtedness.

(3) That the deed described in the declaration was never delivered to said bank, or to any person authorized to receive it on behalf of said bank.

(4) That the said bank never accepted the said deed, nor was it ever accepted on behalf of said bank by any person authorized to accept it.

(5) That it does not now, nor has it at any time had or claimed, any right, title, claim, interest, lien, or demand in, to, against, or upon the lands described in the declaration, and that no consideration or thing of value ever passed or moved from the plaintiff, or any other person to said bank, by reason whereof said bank should assume or become obligated for the payment of said indebtedness.

(6) That on the 2d day of March, 1927, an agreement was made and entered into between the plaintiff and Coral Gables Corporation, Pursuant to which the lands mentioned in the declaration were conveyed by the plaintiff to one E. A. Fowler, as the nominee, agent, and/or trustee of the plaintiff and the Coral Gables Corporation, and as a part of the agreement, by which said lands were so conveyed to Fowler, as such nominee, agent, and/or trustee, the said Fowler gave to the plaintiff the said notes and mortgages with the agreement nevertheless that Fowler in the execution of said notes and mortgages was acting only as the nominee, agent, and/or trustee, as aforesaid, for the purpose of taking and holding the legal title to said lands, and that said notes and mortgages were and at all times should be and remain the obligations of the said Coral Gables Corporation, the payment of which the said Coral Gables Corporation by said agreement assumed and guaranteed. That, at the time of the execution of said mortgage deeds, Fowler was an officer of said bank, acting in a fiduciary capacity and relationship to said bank, its stockholders, depositors, and other creditors. That Fowler, on or about the said 2d day of March, without authority from said bank or any one authorized to act for it, undertook to execute to said bank a warranty deed conveying said lands, and that the attempted execution of said deed was but an effort on the part of Fowler to divest himself of the legal title thereto, but that the delivery of said deed was never effected and the recordation thereof was never made known to said bank or to any person through and by whom knowledge or notice of the recordation of said deed could be imputed to said bank. That no consideration therefor was ever paid by the bank, or any one in its behalf; and that the acts and doings of Fowler in so signing, acknowledging, and recording said warranty deed in the name of the bank was unauthorized and contrary to any power or authority in him vested and imposed, and that Fowler's act in recording the deed was in violation of his instructions and contrary to his duties.

(7) That, at the time of the delivery of the said notes and mortgages, there did not exist any obligation or indebtedness from Fowler to the plaintiff, nor did any consideration or thing of value pass from the plaintiff, or any person whomsoever, to Fowler. That Fowler was acting not in his individual capacity, but merely as a receptacle for the legal title to said lands, and as a conduit, agent, or attorney for the execution of said notes and mortgages under and by virtue of a contract then existing amongst Fowler, the plaintiff, and the Coral Gables Corporation, which contract was in writing and under seal and duly executed by the plaintiff and the said Coral Gables Corporation, and wherein it was stipulated and agreed that said notes and mortgages were not the obligation of Fowler, but were, and should at all times remain, the primary and direct obligation of the Coral Gables Corporation, and, by reason thereof, Fowler was not on March 1, 1927, or at any time thereafter, indebted to the plaintiff in the said sum of $30,000, or in any other sum. That the mortgage deeds and promissory notes described in the declaration were never the obligation of Fowler, and that the said bank did not and cannot assume a nonexistent obligation.

(8) That the said bank, being engaged in the business of a banking company, is prohibited from making any contract or assuming any undertaking to become surety or guarantor for the debt or default of another, and is likewise prohibited from purchasing, holding, or conveying real estate for any purpose other than such as may be necessary for immediate accommodation in the transaction of business, or such as may be conveyed in the satisfaction of debts previously contracted in the course of business dealings, or such as shall be purchased at sale under judgments, decrees, or mortgages taken by or assigned to such company, or purchased to secure debts due to such company, and that said bank was not then, and had never been, indebted to the plaintiff in any manner or in any sum whatsoever. That said lands were not then, and never were, necessary for the bank's immediate accommodation in the transaction of business. That they were not conveyed to said bank in satisfaction of any debts previously contracted, and that said lands were not purchased at any sale under judgment or decree, or mortgage taken by or assigned to said bank, or to secure any debt due to said bank, and that the attempted conveyance of said lands to said bank was ultra vires and beyond the power of said bank to consummate contrary to public policy, and in violation of the statutes of the state of Florida in such cases made and provided.

Replications were filed by the plaintiff.

Upon a trial of the cause, a verdict was returned in favor of the plaintiff. Thereupon a motion for a new trial was made by the Bank of Coral Gables, which said motion was granted by the court, and the cause is now here for review upon a writ of error from the order granting a new trial.

The evidence reveals that the plaintiff held notes of the Rapid Building Company, a corporation, in the aggregate sum of $90,000, which were secured by mortgages on certain property in Coral Gables; that the Coral Gables Corporation held second mortgage liens on the property to secure sums aggregating $30,000; that the Bank of Coral Gables held unsecured notes of the Rapid Building Company and Atlantic Coast Builders, as makers, in the sum of $15,000; that the Rapid Builders Company defaulted in certain payments due plaintiff, who instituted foreclosure proceedings, which cause was dismissed upon the plaintiff and Coral Gables Corporation reaching an amicable adjustment upon the following terms. The plaintiff agreed to surrender his notes and release his first mortgages for said sum of $90,000, upon the payment of $10,000 in cash by the Coral Gables Corporation, and the receipt of a mortgage executed by Fowler and wife upon the same property, securing the sum of $30,000 and that he would look to the Rapid Building Company for $15,000....