Nichols v. Bodenwein
| Decision Date | 18 October 1932 |
| Citation | 107 Fla. 25,146 So. 86 |
| Court | Florida Supreme Court |
| Parties | NICHOLS et al. v. BODENWEIN et al.[*] |
Commissioners' Decision.
Suit by Effie Smith Nichols, joined by her husband, J. C. Nichols against Theodore Bodenwein and others. From the decree plaintiffs appeal.
Reversed and remanded, with directions.
On Rehearing. Appeal from Circuit Court, Dade County; H. F Atkinson, Judge.
Robert J. Boone, of Miami, for appellants.
James R. Cooper and Copeland & Therrel, all of Miami Beach, for appellee D. S. Marsh, Jr.
L. S. Julian and Shutts & Bowen, all of Miami, for appellee C. R. Dashiell.
Miller, McKay, Dixon & De Jarnette, all of Miami, for appellee John G. Mckay.
The appellants, whom we will refer to as complainants, filed their bill of complaint against Theodore Bodenwein, D. S. Marsh, Jr., Lee M. Rumsey, Jr., Luther Gross, administrator with the will annexed of Wilfred Sellers, deceased, William M. Miller, Jerome Cherbino, C. R. Dashiell, J. H. Johnston, W. A. Chaplin, Gilbert H. Chaplin, R. L. Kilby, Lee Rumsey, Sr., Edwin M. Simpson, John G. McKay, and Alton Port Commercial, Inc., whom we will refer to as defendants, and therein alleged that on or about the 16th of June, 1925, the defendants Bodenwein, Marsh, the Rumseys, Sellers, Miller, Cherbino, Dashiell, Johnston, and Wm. H. and Gilbert Chaplin organized a syndicate for the purchase of certain lots in Ocean Beach subdivision No. 3, Miami Beach, Dade county, for a consideration of approximately $600,000; that the said defendants agreed to subdivide said lots into smaller lots, streets, and terraces, and that such subdivision should be known as Alton Port Commercial subdivision; that they used a plat, a photostatic copy of which is attached to the bill of complaint as Exhibit A, to make sales, and recognized it as a plat of said subdivision, but that the same was never approved as required by law; that the defendants or their agents, servants, and employees on or about July 3, 1925, falsely and fraudulently represented to complainants the blueprints of the plat '(a) To be a true and exact plat of the subdivision known as Alton Port Commercial, giving the correct size and correct location of certain lots and streets which are hereinafter described; (b) That upon the representations that the said property belonged to the defendants or one of them and that the plat or blue print heretofore described as Exhibit 'A' was a true and correct blue print and plat of said subdivision; (c) That it was in fact a subdivision located in Dade County, Florida, and known as Alton Port Commercial;' that upon such representations the defendants sold to the complainant Effie Smith Nichols certain lots in said subdivision, which were represented to have a total frontage of fifty feet facing east on Alton road and west on Port avenue, well knowing that such plat had not been approved and filed for record, as provided by law, and that there was no such street as Port avenue, nor certain numbered terraces in said subdivision, and that they knew that said representations were false and untrue and that they were made for the purpose of deceiving said complainant and with the intention that they be relied upon; that the said complainant believed and relied upon said representations to her damage, having no knowledge of their falsity. It was further shown that complainants also fraudulently represented that there 'existed a corporation known as Alton Port Commercial, Inc., which was duly incorporated under the laws' of Florida; that said corporation had a marketable title to the property, and that the said lands were free of incumbrances, or, if there were incumbrances thereon, they consisted of long-time mortgages with proper release clauses for each lot, and that it had lawful right to sell and convey the same; that on July 3, 1925, no such corporation had been incorporated in Florida; that on July 14, 1925, letters patent were issued by the secretary of state of the state of Florida to John G. McKay, Edwin M. Simpson, and Lee M. Rumsey, Jr., but that such letters patent, charter, and affidavit by the treasurer showing that 10 per cent. of the capital stock of said corporation had been paid were not filed and recorded in Dade county where the principal office and place of business of the corporation was located, until August 7, 1925, and that the treasurer's affidavit was not filed with the secretary of state until August 7, 1925; that an attempt was made to deed property to the 'Alton Port Commercial,' a corporation on July 16, 1925, and not to 'Alton Port Commercial, Inc.,' a corporation, but that the deed was void because the property was described as being lots in Ocean Beach, Fla., No. 3, subdivision, without stating that they were in Miami Beach or Dade county; that, pursuant to such representations, and relying thereon, the said complainant Effie Smith Nichols, and Gilbert H. Chaplin, one of the defendants, as joint purchasers, on July 3, 1925, entered into four certain written contracts, with 'Alton Port Commercial, Inc.,' a corporation, for the purchase of said lots on the installment plan with a down cash payment, copies of said contracts being attached to the bill as a part thereof; that on March 13, 1926, the said Gilbert Chaplin assigned to the said complainant his interest in said contracts, at which time the said complainant had no notice or knowledge that a fraud had been perpetrated upon her; that the defendants as a part of the consideration for the purchase of said lands agreed to construct suitable water and electric light connections for the same, complete and grade streets in the said subdivision, and dredge a channel twenty feet from the bay front bulkhead line, one hundred fifty feet in width and twenty feet deep, the same to be completed eighteen months from date of agreement; that said contract was breached by the defendants in that they did not make the improvements within a reasonable time from the making of the contracts, and did not complete the said channel within the agreed time; that the complainant Effie Smith Nichols refused to make deferred payments; that she was induced to make the said contracts through fraud; that the Alton Port Commercial, Inc., did not have title to the property; that it had put it out of its power to fulfill said contracts, having dissipated its assets in an unlawful manner, and because it had breached its contract as shown by the bill; that, when the second payment became due, said complainant was ready, willing, and able to comply with her contract, but defendants were in default upon the mortgage given upon the entire subdivision for the purchase price thereof.
It is alleged further that, prior to the incorporation of Alton Port Commercial, Inc., a syndicate of the defendants was formed, each of them contributing to a common fund for making the initial cash payment for the land comprising the alleged subdivision, and that the names of the members of the syndicate and the amount paid in by each of them is as follows:
Theodore Bodenwein ..... $12,500.00
D. S. Marsh, Jr. ..... 12,500.00
Lee Rumsey ..... 12,500.00
Wilfred Sellers ..... 12,500.00
William M. Miller ..... 25,000.00
Jerome Cherbino ..... 25,000.00
C. R. Dashiell ..... 12,500.00
J. H. Johnston ..... 25,000.00
W. A. Chaplin and Gilbert Chaplin 25,000.00
--that when the corporation was organized stock was issued to said members of the syndicate for the respective amounts opposite their names, and that the aggregate amount thereof comprised the entire assets of the syndicate and of the corporation, and that practically all of it was paid on the purchase price of the land to be subdivided; that the said corporation gave to the vendors a mortgage upon the land to secure the sum of $450,000, payable in installments, but a small portion of which was paid on the note first maturing; that interest had been paid only to December 16, 1925; that a bill was filed on February 15, 1927, to foreclose the said mortgage, and that a final decree of foreclosure had been entered thereon on July 1, 1927; that during the summer and fall of 1925, the entire subdivision was sold, and that approximately $400,000 in cash had been received therefor; that, instead of using the moneys so received in carrying out the terms of their said contracts, it was wrongfully diverted by repaying to each of the defendants who had contributed to the purchase of said lands, or to expenses of organization, the full amount of his investment.
It was further shown that the said corporation holds notes and obligations representing a large amount for the deferred payments given by purchasers of lots in said subdivision among them being the notes of complainant, Effie Smith Nichols; that she has not received benefit or title from the money paid on the lots purchased by her, and that the notes given by her should be surrendered and canceled; that they cannot designate the various parties who were officers, stockholders, and directors in the said corporation at the various times, but that at the time of its organization John G. McKay was its president and treasurer, Edwin M. Simpson its vice president, and Lee M. Rumsey its secretary, and that the same parties composed the board of directors; that at the time of the purchase of the property on June 16, 1925, 'and prior to the actual organization of the corporation, Jerome Cherbino was acting President, Lee M. Rumsey, Sr., as Vice President, and Lee Rumsey, Jr., as Secretary, and D. S. Marsh, Jr., as Treasurer, and that the same parties composed the Board of Directors; that at the time of the filing of this bill, W. A. Chaplin is President, R. L. Kilby is Vice President and James A. Bissett is the...
To continue reading
Request your trial