Smetal Corp. v. West Lake Inv. Co.

Decision Date16 April 1936
Citation126 Fla. 595,172 So. 58
CourtFlorida Supreme Court

On Rehearing Jan. 19, 1937.

Suit by the Smetal Corporation against the West Lake Investment Company and others. From a decree dismissing the amended bill, the plaintiff appeals.

Reversed and remanded.

BUFORD and DAVIS, JJ., dissenting. Appeal from Circuit Court, Broward County George W. Tedder, judge.


Shutts & Bowen and Ch. A. Carroll, all of Miami, for appellant.

C. H Landefeld, Jr., and W. J. Robinson, both of Hollywood, for appellees.


BROWN Justice.

This is an appeal from a final decree of the circuit court of Broward county, which dismissed an amended bill, brought within 6 months after the rendition of a tax lien foreclosure decree seeking to review and have set aside said foreclosure decree for error apparent on the record, and also to impeach the foreclosure decree for fraud in its procurement.

A bill of review, or a bill strictly in the nature of a bill of review, cannot be filed without first obtaining the permission of the court. In so far as the bill in this case sought a review of the foreclosure decree for alleged error apparent on the record, the above rule would apply. An original bill to impeach a former decree for extrinsic fraud in its procurement is an independent bill, and can be filed without first obtaining the permission of the court. Gamble v. Gamble Holding Corporation, 120 Fla. 340, 162 So. 886. But in this case, the plaintiff below, after first obtaining leave of the court, filed an amended bill, which permission in effect complied with the rule in so far as it was a bill of review. However, in so far as it was a bill of review, for errors alleged to appear in the record of the proceedings, the subject-matter had already been substantially incorporated in a special appearance and motion to vacate, attacking the jurisdiction of the court over the plaintiff as defendant in the original foreclosure suit, on the ground that the plaintiff had not followed the proper procedure for obtaining substituted service, and that service by publication had not been shown to be authorized, nor had due diligence been shown. On this motion the court below had, after hearing and argument, ruled adversely to the then defendant, the plaintiff in the suit now before us, and no appeal was taken from that order, thus rendering the matters raised by the motion res judicata. See Allison v. Handy-Andy Community Stores, 106 Fla. 274, 143 So. 263. Such remedy by motion is available in cases of this kind, Sawyer v. Gustason, 96 Fla. 6, 118 So. 57; Gibbs v. Ewing, 94 Fla. 236, 113 So. 730, 747.

In so far as the amended bill may be considered as a bill brought for the purpose of impeaching the foreclosure decree on the ground of fraud in its procurement, its allegations of specific facts are hardly sufficient to sustain the general allegations of actual, as distinguished from constructive, fraud. The specific facts as alleged go to show that if the plaintiff in the foreclosure suit had exercised a reasonable degree of diligence in making inquiries, it would not have had to resort to service by publication, for it would have been able to find that the defendant in that suit, the plaintiff here, had a complete set of officers and an office for the transaction of business located in the city of Miami in the adjoining county of Dade, as shown by annual reports of file with the secretary of state, made under chapter 14677, Laws of 1931.

In support of this contention, it is alleged that plaintiff in the foreclosure suit only applied to the Secretary of State to ascertain whether or not the defendant corporation had complied with sections 4257 and 4259 of Comp.Gen.Laws (requiring corporations to designate an office, or place of business, or agent for the service of process), to which inquiry the reply was in the negative, and a certificate in due form made by the secretary of state to that effect was filed in the cause, whereas, if the plaintiff in foreclosure suit had asked the secretary of state of furnish it the names of the officers of the defendant corporation it could have obtained them, as this information was on file in the secretary of state's office, as above set forth, by reason of reports filed under said chapter 14677, which requires corporations to file annual reports and pay annual stock taxes, which annual reports shall give the names and addresses of their officers and of their resident agent upon whom process may be served.

The sheriff's return, made under section 4256, C.G.L., was to the effect that the officers and agents of the defendant corporation were 'unknown.' This has been held sufficient under that section to form a basis for constructive service. Fowler v. Chillingworth, 94 Fla. 1, 113 So. 667. If false, there was a remedy on the sheriff's bond. Lewter v. Hadley, 68 Fla. 131, 66 So. 567. If the application or effect of section 4256, C.G.L., has been to some extent repealed or modified by the Act of 1927, above referred to, as to service of process upon corporations which have complied with the provisions of that act (now sections 4257 and 4259, Comp.Gen.Laws), it could hardly be contended that section 4256 has been repealed or modified as respects the clause here in question, in so far as it affects corporations which have not complied with the provisions of the later act of 1927, now appearing as sections 4257 and 4259, C.G.L. But complainant in the foreclosure suit, appellee here, claims that it complied fully with both statutes, and that the service by publication was justified under either or both.

Section 4261, C.G.L., being section 5 of chapter 11829 of the Acts of 1927, provides, inter alia, that where a corporation has failed to comply with certain requirements of section 4257 or of section 4259, and there shall be filed in any pending cause a certificate of the secretary of state that the place of business or domicile of said corporation, or agent upon whom process may be served, has not been designated under either of said sections, then the clerk of the court, if the court has a clerk, and if not, the judge thereof, shall make an order of publication as therein prescribed. In this case, the complainant in foreclosure proceeding complied with the statute by filing a certificate of the secretary of state, which I think meets the requirements of the statute, and the circuit judge himself made the order of publication. The certificate and order of publication were both filed on the same day. The judge's order was dated the day before the date of filing, but I think the presumption should be included, in favor of the validity of the court's order, that the certificate had been filed with or presented to the judge on or before the signing of the order of publication, as both the certificate and order were filed in the clerk's office on the next day after the order was signed.

It is also contended by appellant that the circuit judge had no authority under the statute to make the order, as his court has a clerk. But surely the judge of a court of general jurisdiction has the power to make an order which the clerk, a ministerial officer, has the power to make.

However, these procedural questions were raised by the motion which the appellant filed in the original suit, and were decided adversely to appellant, and are now res judicata.

Indeed, said motion, in general terms, charged both the complainant in foreclosure and the sheriff with lack of due diligence, in that complainant failed to make sufficient inquiry before resorting to substituted service, and in that the sheriff likewise failed so to do before making his return on the summons that the officers of the appellant corporation were unknown. The motion referred to covered in brief form most of the grounds set out in the bill to impeach the decree, though the latter goes into more detail on some points, and adds some new allegations, and charges that such alleged lack of due diligence amounted to, or was the result of, fraud.

As the statute of 1927 (section 4257 et seq., C.G.L.) authorizes service by publication upon corporations which have not complied therewith, and as the certificate of the secretary of state filed in court under section 4261, C.G.L., showed that the appellant corporation had not so complied, appellee was, by the express language of the statute, at least prima facie entitled to obtain constructive service by publication upon appellant as therein provided, without making inquiry for information filed under chapter 14677, and, publication having been made in accordance with said statute (section 4261, C.G.L.), appellee was also prima facie entitled under the language of the statute to the decree pro confesso which followed. See section 4262, C.G.L.

While the statute of 1927, under which constructive service was obtained, says nothing on the subject, we are nevertheless satisfied that no person or corporation is entitled to resort to that statute to obtain substituted service upon a corporation which has not complied with the statute, when he knows, or in the exercise of reasonable deligence could have known, that personal service upon such defendant could be obtained. Any other construction would render the statute unconstitutional. Service by publication by one party upon another should never be resorted to in any case where by the exercise of reasonable diligence actual personal service can readily be secured.

In McDaniel v. McElvy, 91 Fla. 770, 108 So. 820, 832, 51 A.L.R. 731, this court, speaking through Mr. Justice Strum, said:

'While allegations of a categorical nature which follow the words of the statute are sufficient as a predicate for the issuance of

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