United Service Corp. v. Vi-An Const. Corp.

• Decision Date: 25 January 1955
• Docket Number: VI-AN
• Citation: United Service Corp. v. Vi-An Const. Corp., 77 So.2d 800 (Fla. 1955)
• Parties: UNITED SERVICE CORPORATION, a Florida corporation, Appellant, v.CONSTRUCTION CORP., a Florida corporation, Jesse A. Owens and Mae FincherOwens, his wife, Appellees.
• Court: Florida Supreme Court

Page 800

77 So.2d 800

UNITED SERVICE CORPORATION, a Florida corporation, Appellant, v. VI-AN CONSTRUCTION CORP., a Florida corporation, Jesse A. Owens and Mae FincherOwens, his wife, Appellees.

Supreme Court of Florida, Special Division A.

Jan. 25, 1955.

Rehearing Denied Feb. 22, 1955.

George J. Bays, Miami, for appellant.

Herbert Schwarz, Miami, for John Nicholas, as Trustee & Receiver in Bankruptcy of the Estate of Vi-An Construction Corp.

J. Tillman Pearson, Miami, for Jesse A. Owens and Mae Fincher Owens, appellees.

DREW, Justice.

Appellant, United Service Corporation, (hereafter called United) loaned money to Vi-An Construction Corp., one of the appellees, (hereafter called Vi-An) in connection with a real estate development in Dade County.

About the time that Vi-An had completed a residence on Lot 14, Block 1 of Biscayne Gardens, Section 8, Part 5, according to the plat thereof recorded in Plat Book 49, page 3 of the public records of Dade County, Florida, it found purchasers for the same in Jesse A. Owens and Mae Fincher Owens, his wife, who then resided in the City of Atlanta, Georgia. The purchase price was $13,500, of which sum the purchasers paid $1,000 and secured therefor a preliminary receipt or contract of sale which provided for the delivery of a good and sufficient title, free of encumbrances, and the payment of the balance of $12,500 in cash at the time of taking title. A little while after the contract was entered into the Owens employed an attorney who examined the title and furnished them with an opinion thereto setting forth, among other things, that the property was encumbered by two mortgages, one in favor of United in the sum of $8,250 and the other in favor of H-5 Corporation in the sum of $1,200. In this appeal we are not concerned with the smaller mortgage.

On the day the Owens received a copy of the title opinion, the president of Vi-An, Vincent Cravero, called an attorney named Hagearty to meet with the Owens and their daughter and son-in-law, and Mr. Cravero and his wife, as president and secretary of the Vi-An Construction Corp., for the purpose of closing the transaction. It appears that Hagearty was employed by Cravero solely for the purpose of drawing the deed. The parties met in Hagearty's office and there was a discussion concerning the mortgages and the details of closing. The deed was prepared and was executed than and there by Mr. and Mrs. Cravero, as president and secretary of the corporation. The question of the mortgages was discussed and it was agreed that inasmuch as Mr. Owens' check for $12,500, the balance of the purchase price, was drawn on an Atlanta bank, the mortgages could not be satisfied at that time but that it would be necessary to wait a few days until the check cleared. Apparently at the suggestion of Mr. Cravero, the check of the Owens was made payable to Vi-An and at that time delievered to the seller so that it could be deposited for clearance. There is some dispute as to whether the check was actually handed to Mr. Cravero by Mr. Owens or was handed to Hagearty and by him handed to Mr. Cravero. In any event, the substance of the testimony is that Mr. Hagearty was to keep the deed until the check cleared and Mr. Cravero delivered him the original mortgage, original note and satisfaction at which time he, Hagearty, was to record the satisfaction and the deed.

Cravero deposited the check on November 5th to the account of Vi-An. On November 11th, Cravero called the offices of United, with whom he had had extensive dealings of a similar nature, over a long period of time, and told them he would like to pick up the satisfaction of the mortgage on Lot 14, of Block 1. Later during the same day, he called at the office of the United and received an envelope containing the original mortgage, original note and duly executed satisfaction. Cravero placed these in his brief case where he held them for several days and until they were delivered to Hagearty, who recorded both the satisfaction and the original deed on November 24th. In the meantime, and two days subsequent to the time that United delivered the original mortgage, original note and satisfaction to Cravero, Cravero delivered a check to them in payment of the principal and interest due. We get the definite impression from the extensive testimony that this was not an unusual manner of handling matters of this kind because of the close relations and extensive financial dealings of these parties. This check was received by United on November 13th and deposited by it on that date. On November 18th, the check was returned because of insufficient funds but was redeposited by United at the request of Cravero. On November 21st the check was again returned, was held by United for three days, or until the 24th of November, and was deposited the third time. The check again was returned for insufficient funds on the 28th of November.

Between the time of the return of the check on the first occasion and its return the third time on November 28th, negotiations had taken place between United and Cravero concerning the precarious financial condition of Vi-An. During this period, and even though United was familiar with such precarious financial condition of Vi-An, United made additional advances in connection with the development. Beginning about the first of December there were numerous meetings between the officials of United and the officials of Vi-An with reference to the financial condition of the latter concerning a refinancing of the entire project and particularly concerning a proposition whereby Vi-An would assign certain of its assets over to United in connection with other obligations and indebtednesses existing between the companies. It was not until the latter part of December or early in January that Mr. and Mrs. Owens were advised or had any knowledge of the fact that the funds which they had delivered to Mr. Cravero had not been used in paying off the $8,250 mortgage. The first actual knowledge that they had of any trouble in the matter was when they were advised in the latter part of December by United and its attorney that they had better consult an attorney with reference to the matter. It was not until January 12th when suit was instituted by United to foreclose the previously satisfied mortgage that they actually knew just what position was being taken by United with reference to the matter.

The lower court heard extensive testimony on the issues and entered a decree refusing to re-establish or enforce the mortgage lien. It is from this decree that this appeal has been taken by United.

It is the contention, among other things, of...