U.S. Properties, Inc. v. Marwin Corp., 59-435

• Decision Date: 03 October 1960
• Docket Number: No. 59-435,59-435
• Parties: U. S. PROPERTIES, INC., a Florida corporation, Appellant, v. MARWIN CORP., a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

Page 371

123 So.2d 371

U. S. PROPERTIES, INC., a Florida corporation, Appellant, v. MARWIN CORP., a Florida corporation, Appellee.

No. 59-435.

District Court of Appeal of Florida, Third District.

Oct. 3, 1960.

Cypen & Salmon, Miami Beach, for appellant.

Meyer, Weiss, Rosen & Rose, Miami Beach, and Patton & Kanner and William H. Morrow, Jr., Miami, for appellee.

PEARSON, Judge.

U. S. Properties, Inc., was the defendant in a suit for declaratory decree brought by Marwin Corp. U. S. Properties is the landlord and Marwin Corp. is the tenant in a 99-year lease agreement which covers certain vacant property located in the town of Bay Harbor Island, Dade County, Florida. Marwin Corp. as plaintiff sought by its complaint to have the court determine: a) whether or not a certain modification of the lease agreement was enforceable, b) whether or not the plaintiff as lessee had complied with all the terms and conditions of the 99-year lease in such a manner as to require the defendant to execute a mortgage submitted by the plaintiff to the defendant, and c) other supplemental relief in the nature of specific performance and damages. The final decree found: a) that the modification of the lease agreement was unenforceable, b) that the plaintiff as lessee had complied with the terms of the 99-year lease setting forth the conditions under which the defendant, U. S. Properties, lessor, must join in the mortgage submitted, and c) granted the specific performance of the lease provision and denied supplemental relief in the nature of damages. From this decree U. S. Properties has appealed and Marwin Corp. has cross assigned as error the refusal of the court to grant damages. Upon our holding that the tenant Marwin Corp. had not complied with that portion of the lease agreement which provided that the lessee should procure and assign to the lessor a commitment from an institutional lender to make a permanent mortgage, the final decree is reversed in part and under this holding we find it unnecessary to consider the cross assignments.

U. S. Properties owns the real estate above mentioned. Marwin Corp. by assignment became the owner of a 99-year lease thereon in 1957. The lease provided that an apartment building of not less than ten units should be constructed and that U. S. Properties, as fee owner, could be required to join in the execution of a temporary construction mortgage and a permanent mortgage under certain conditions therein set forth. Prior to the assignment of the leasehold interest to Marwin Corp., the then lessees presented a mortgage to U. S. Properties for officers' signatures. This mortgage was executed but was never recorded and was subsequently returned to U. S. Properties with the signatures of the officers obliterated. Thereafter, at the time when the original lessees were assigning their leasehold interest to the plaintiff, the latter was advised by the defendant that it had already complied with the provision to subordinate its fee simple interest. The original lessees brought an action against the defendant to determine whether the defendant had complied with the subordination provision because of its execution of the unused mortgage. The suit was dismissed and an agreement modifying the 99-year lease was executed. The terms of this modification agreement are not in themselves germane to this opinion. At a time subsequent to the modification, Marwin Corp. presented a temporary construction mortgage in which U. S. Properties refused to join, upon the basis that Marwin Corp. had not complied with the terms of the lease, which required that a permanent mortgage commitment which could be assigned to U. S. Properties be submitted simultaneously.

The provision to which reference was made is contained in article XIII, section B(3), of the 99-year lease and is in the following language:

'The Lessees shall have first procured a commitment from an institutional lender to make the permanent mortgage and shall, simultaneously with the joinder by the Lessor in the temporary construction mortgage, assign the commitment to the Lessor upon the condition that if the Lessees default in the building obligation the Lessor itself may have the benefit of the permanent mortgage committed to be made * * *' (Emphasis added).

The chancellor found that U. S. Properties, the landlord, could not refuse to execute the construction mortgage upon the basis that the mortgage commitment was not assignable because Marwin Corp. had fully complied with the above quoted provision. The portion of the findings of the chancellor pertaining to this issue is as follows:

'The lease further provides that the lessee may in conjunction with the construction of such building require the lessor to join with the lessee in the execution of a temporary construction mortgage and a permanent mortgage. The lease outlines in detail the steps which must be taken by the lessee in order to require the lessor to join in the execution of such mortgages.'

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'The plaintiff-lessee did attempt to commence the construction of an apartment building upon the premises prior to February 1, 1958. The plaintiff in its attempt to comply with the terms and conditions of the 99 Year Lease which would require the defendant to join the execution of a mortgage, did the following:

'(a) On November 21, 1957, the plaintiff delivered to the defendant the original of a commitment letter which it obtained from the Prudential Insurance Company of America. This mortgage commitment letter provided for a loan in the sum of $325,000.00 and further provided that the note should be signed by Arthur Levine, Herbert Levine and Charles Winston, officers of the plaintiff corporation, who should be jointly and severally liable thereon until the amount due on said note be reduced to $225,000.00.

'(b) Simultaneously with the delivery of the commitment letter, plaintiff delivered to the defendant a copy of the Plans and Specifications for a proposed building to be erected on the subject premises.

'(c) On January 14, 1958, plaintiff delivered to the defendant a mortgage in favor of the Miami Beach First National Bank to be signed by the plaintiff and defendant, which mortgage was to be used for the purpose of providing construction money for the proposed building. The said mortgage required completion of the proposed building on or before July 1, 1958, and provided that the maximum amount which the mortgage would secure was the sum of $487,500.00. Upon objection by the defendant, the mortgage was amended so that the completion date was made August 1, 1958, and the maximum amount which the mortgage secured was reduced to $325,000.00.'

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'(f) On January 24, 1958, the plaintiff executed and delivered to the defendant an assignment whereby it did assign, transfer and set over unto the defendant all of its right, title and interest in the loan commitment obtained from the Prudential Life Insurance Company of America.'

Based upon these findings the chancellor concluded as follows:

'Although the Court finds that the plaintiff...