Orlando Orange Groves Co. v. Hale

• Decision Date: 25 November 1932
• Citation: 144 So. 674,107 Fla. 304
• Court: Florida Supreme Court
• Parties: ORLANDO ORANGE GROVES CO. et al. v. HALE et al.

144 So. 674

107 Fla. 304

ORLANDO ORANGE GROVES CO. et al. v. HALE et al.

Florida Supreme Court

November 25, 1932

Rehearing Denied Dec. 15, 1932.

Commissioners' Decision.

Suit by Henry M. Hale and others against Orlando Orange Groves Company and others, in which a temporary injunction was granted. A motion to dissolve the injunction was denied, and defendants appeal.

Affirmed. Appeal from Circuit Court, Orange County; J. C B. Koonce, judge.

COUNSEL

Tilden & Hays, W. H. Poe, and Dickinson & Dickinson, all of Orlando for appellants.

Crawford & Gaskin and E. W. & R. C. Davis, all of Orlando, for appellees.

OPINION

DAVIS. C.

The bill in this case was filed by certain minority stockholders one of whom was a director, in Orlando Orange Groves Company a corporation, in their own behalf and in behalf of all other similarly situated stockholders in said company, against the said corporation, J. P. Holbrook Company, and the officers and directors of the said Orlando Orange Groves Company, some of whom were not stockholders therein.

It is shown by the bill that J. P. Holbrook, a no-stockholder, and one F. E. Baxter, were employed as general managers and sales agents of the Orlando Orange Groves Company in 1921, and that they were to have charge of the assets of the company and the development and sale of 4,000 acres of land owned by the company, subject only to the general supervision and sale of the company. Under the terms of the contract, Holbrook and Baxter were to get 50 per cent. of the net profits derived from the company's business, for the sale of lands, and they were to maintain offices for the transaction of the company's business at their own expense, but the company was to pay for extra help needed for the company's business. Holbrook and Baxter were each allowed a drawing account of $300 per month, chargeable against their proportion of net profits. The contract was to continue until terminated by either of the parties to same.

The bill of complaint alleged J. P. Holbrook, the secretary and treasurer, and also a director, and F. H. Thwing, the president, with improper conduct whereby the funds of the corporation and its properties are being used improperly and illegally by J. P. Holbrook, and the J. P. Holbrook Company, of which Holbrook is the owner and controller, having taken large sums of money out of the treasury of the corporation, and the said F. H. Thwing having purchased certain securities, and making a profit out of same, that the company had sold property to the amount of $294,000, of which $94,000 was paid in cash, and the balance $50,000 per year, beginning December 13, 1931; that Baxter abandoned his contract; that Holbrook drew from the company for himself and the J. P. Holbrook Company large amounts of money, totaling approximately $60,000, and that the directors had improperly and illegally authorized J. P. Holbrook and J. P. Holbrook Company to borrow from the Orlando Orange Groves Company; that one J. P. Ristig was improperly removed as a director and N. P. Yowell put in his place, and that notices of directors' meetings were not given to Hale, one of the complainants. It is also shown that but 'little remains outside of the notes, among the assets of the Company, save and except wild lands and about sixty acres of improved orange groves, all of which may be disposed of without great cost and expense, and that the withdrawal of vast sums of money from the company is unwarranted and unnecessary, and a depletion and wasting of the company's assets.' A temporary injunction was prayed for restraining the defendants from making further withdrawals of the funds of the Orlando Orange Groves Company, and from any further dealings in its property. A temporary injunction was granted by the court. The bill was amended, waiving the oath to the answer. Defendants filed answer and moved the court for a dissolution of the injunction. The motion was heard, upon the bill and answer, the latter being duly sworn to by Holbrook, and the same was denied by the court. The answer admits the sale of the property to Davenport for $300,000, and denies improper conduct in handling the finances of the corporation, and any improper conduct on the part of the board of directors. It sets out the discharge of J. P. Ristig for incompetency and disloyalty, and the election of N. P. Yowell in his place and stead. It shows that all of the dealings with Thwing were for the purpose of securing funds absolutely necessary for the use of the corporation, Orlando Orange Groves Company, in paying its obligations. The answer shows that Baxter sold his interest to J. P. Holbrook in the contract between Baxter, Holbrook, and Orlando Orange Groves Company, and that the company then recognized J. P. Holbrook as the sole operator under that contract, and proceeded with him instead of with Holbrook and Baxter. The answer further sets out that J. P. Holbrook and J. P. Holbrook Company advanced during the years 1925, 1926, and 1927, to Orlando Orange Groves Company, something over $55,000, and denies insolvency of J. P. Holbrook and J. P. Holbrook Company; it sets up and shows profits then accrued sufficient to wipe out any liability of J. P. Holbrook and J. P. Holbrook Company to Orlando Orange Groves Company. The answer admits an indebtedness of J. P. Holbrook Company to the Orlando Orange Groves Company, at the time of filing the bill, of approximately $18,379.

The appellants have assigned as error: (1) The granting of the temporary injunction, (2) the granting of the temporary injunction without notice, and (3) the denial of the motion to dissolve the injunction.

We will take up first the assignment of error based upon the denial of the motion to dissolve the injunction for the reason that if we should determine that the court committed no error in making that order, there should be no reason for passing upon the other assignments of error.

In Robbins v. White, 52 Fla. 613, 42 So. 841, we held in effect that where the allegations of a bill warrant the granting of a temporary injunction, if the sworn answer positively denies the allegations of the bill upon which complainants' equity, if any, depends, and the answer also contains responsive averments sufficient, if sustained, to defeat the injunction, a motion to dissolve the injunction, heard by consent solely on the bill and sworn answer, the oath to the answer not being waived in the bill, should be granted. In the instant case the bill of complaint, as amended, waived answer under oath. This, however, did not deprive the defendants of the right to answer under oath. Such a waiver alone cannot be used as a basis for an order dissolving temporary injunctions in cases where the answer denies the allegations of the bill and is otherwise responsive thereto. The waiver of an answer under oath merely affects the rules of evidence on final hearing. Under our statute (section 4970(3178), Compiled General Laws of Florida 1927), upon motion to dissolve an injunction either party has the right to introduce evidence, and the chancellor shall dissolve or continue the order according to the weight of the evidence, and this court has adhered to the rule that on application to dissolve a temporary injunction on bill, answer, and affidavits, the chancellor must be governed by the weight of the evidence. Indian River Steamboat Company v. E. C. Tran. Co., 28 Fla. 387, 10 So. 480, 29 Am. St. Rep. 258; Sullivan v. Moreno, 19 Fla. 200; Fuller v. Cason, 26 Fla. 476, 7 So. 870; Baya v. Lake City, 44 Fla. 491, 33 So. 400; Ogden v. Baile, 69 Fla. 458, 68 So. 671.

On a motion to dissolve an injunction, the burden of proof is on the defendant. 10 Enc. Pl. & Pr., 1082.

If, after the answer comes in, there remains a reasonable doubt as to whether the equity of the bill is sufficiently negatived, the court may continue the injunction to the hearing. Yonge v. McCormick, 6 Fla. 368, 63 Am. Dec. 214; McKinne v. Dickenson, 24 Fla. 366, 5 So. 34; 32 C.J. 416.

On motion to dissolve an injunction on bill and answer, where sufficient equities are stated in the bill, the court will look to such facts of the answer only as are responsive to the bill; and a respondent will not be permitted to rely upon new matter in avoidance, in his answer, not in response to the allegations upon which the equities of the bill are founded. Yonge v. McCormick, 6 Fla. 368, 63 Am. Dec. 214; Indian River Steamboat Co. v. E. C. Trans. Co., supra; 32 C.J. 421; 14 R. C. L. 468.

The bill in the instant case was sworn to by Henry M. Hale and W. D. Way, and the answer was sworn to by J. P. Holbrook.

The allegations of the bill upon which the complainants rely for relief are not denied, but are, in the main, expressly or impliedly, confessed by the answering defendants, who endeavor to justify the alleged acts of wrongdoing charged in the bill, or to explain them. In the absence of a denial, the court was justified in denying the motion of defendants to dissolve the temporary restraining order, unless the equities of the bill are insufficient for injunctive relief.

It is the rule here that an application to dissolve an injunction on bill and answer brings up the question as to whether or not the equities of the bill are sufficient to justify the writ in the first instance. I. R. Steamboat Co. v. E. C. Trans. Co., supra. It therefore becomes necessary for us to inquire whether the bill sets forth sufficient grounds for the issuance of such a writ.

By resolution adopted by the board of directors of the Orlando Orange Groves Company, a copy of which is made a part of the bill, authority was given 'for the J. P. Holbrook Company to borrow money from the Orlando Orange Groves Company,' and vice versa.

It is shown by the bill...