Reaves v. Hembree, W--371
| Decision Date | 26 March 1976 |
| Docket Number | No. W--371,W--371 |
| Citation | 330 So.2d 747 |
| Parties | David REAVES, Appellant (Plaintiff), v. J. D. HEMBREE et al., Appellees (Defendants). |
| Court | Florida District Court of Appeals |
Barry D. Graves of Jones & Ritch, Gainesville, for appellant.
Stephen B. Lewallen, Robert B. Cates of Hodgkinson & Cates, C. Valentine Bates of Jones, Bates & DeCarlis, and Leonard Ireland, Gainesville, for appellees.
Reaves seeks reversal of an adverse final judgment entered by the trial court following a nonjury trial of a suit to impose a constructive trust on real property.
The basic issue before us is whether the trial court erred by failing to impose a constructive trust on the property.
Reaves, Wade Hembree, and J. D. Hembree entered into a contract to buy certain real property on which to construct and operate an apartment complex. Under a verbal agreement, Reaves and the Hembrees were to share equally in the undertaking. Reaves was to provide architectural services, Wade Hembree was to provide construction services, and J. D. Hembree was to obtain financing for the project.
Because they were unable to obtain financing, it was necessary to take Hembree National Corporation into the venture. It was to obtain financing and to do this it was necessary to agree that title to the property be placed in the name of Hembree National. It was verbally agreed that Hembree National would have a one-half interest in the project, and Reaves, Wade Hembree, and J. D. Hembree would have a one-sixth interest each. On completion of the project, Hembree National was to recovery a one-sixth interest in the property to each of the three individual members of the venture.
Hembree National took legal title to the property and executed a $65,000.00 purchase money mortgage to the grantors. It obtained a $1,100,000.00 construction loan from Commonwealth Corporation and a permanent commitment from Metropolitan Life Insurance Company to purchase the construction loan upon completion of the project.
During the course of the construction, financial problems were encountered. It appeared that foreclosure might become necessary. Interim financing of an additional $195,000.00 was necessary. During this period, the relationship between the joint venture became strained, and efforts were made to sell the project without success.
Shortly after the complex was completed, Metropolitan took the first mortgage as agreed, and Commonwealth took a second mortgage. Several weeks later, without the knowledge or consent of Reaves, Hembree National sold or traded the complex to Ro-An Development Corporation at a Hembree National and Ro-An had some of the same directors and employers. At a meeting of the directors of Hembree National Corporation, held at J. D. Hembree's home, attended by Roberts, a director who was also president of Ro-An, the complex was conveyed to Ro-An. At this meeting J. D. Hembree informed all present that Reaves claimed an interest in the complex.
purported loss to it of several hundred thousand dollars.
The trial court found that there was a joint venture between Reaves, Wade Hembree, J. D. Hembree, and Hembree National. However, because of a cost overrun, there being no unjust enrichment as a result of fraud, undue influence, abuse of confidence, or mistake, the court refused to impose a constructive trust.
There is a fiduciary relationship between joint venturers. They owe each other the utmost good faith, fairness, and honesty. This is especially true of the venturer who is entrusted with...
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