De Vore v. Lee

• Decision Date: 28 February 1947
• Citation: 30 So.2d 924,158 Fla. 608
• Court: Florida Supreme Court
• Parties: DE VORE v. LEE, Comptroller.

30 So.2d 924

158 Fla. 608

DE VORE v. LEE, Comptroller.

Florida Supreme Court

February 28, 1947

On Rehearing June 13, 1947.

Appeal from Circuit Court, Leon County; W. May Walker, Judge.

Howell, McCarthy Lane & Howell, Edward McCarthy, Jr., and Edward W. Lane Jr., all of Jacksonville, for appellant.

J. Tom Watson, Atty. Gen., and T. Paine Kelly, Asst. Atty. Gen., for appellee.

THOMAS, Chief Justice.

The chancellor dismissed appellant's bill of complaint inasmuch as he felt that Section 201.08, Florida Statutes 1941, and F.S.A., was applicable and that its 'applicability * * * was definitely and unequivocally foreclosed in the case of Dundee Corporation v. Lee, 156 Fla. 699, 24 So.2d 234.' I do not doubt that he was thoroughly justified in reaching his conclusion in the light of that decision, but upon reflection and a close study of the legal questions here presented again I am inclined to believe that pronouncements in the cited case should be re-examined. Before proceeding to that task it should be said that the present bill simply sought a judicial declaration of the duty or liability of appellant, a trustee, with respect to documentary stamp taxes on certain short-term (two-and three-year) leases.

Turning now to the Dundee case, we seem to have blended the provisions of Sections 201.02 and 201.08, although one relates to a 'tax on deeds and other instruments relating to lands,' etc., the other to a 'tax on promissory notes, written obligations to pay money, assignments of wages,' etc. We did unmistakably, as the chancellor observed, hold that the lease, one for 99 years, was a written obligation to pay money, but we termed the 'real question in the case,' the manner of computation of the tax. It was decided that the basis of taxation was the present value of 99 yearly payments, taking into account an interest rate of eight per cent.

It seems to me that the present case should not be distinguished from the Dundee case because there the lease was to continue for 99 years while the ones involved here were to run for only two or three years, for if that idea is adopted, then we pave the way for a very difficult decision later fixing the line of demarkation between a short-term lease under one decision and a long-term lease under the other. I apprehend that the law should be now established from the nature of the instrument and not from the period of its probable duration. In other words, I think, upon reflection, that such an instrument should not be classified as an obligation to pay money, as was held in the Dundee case, and that we should correct the error now if one has been made.

Section 201.08, supra, being a paragraph in Section 1 of Chapter 15787, Laws of Florida, Acts of 1931, Ex.Sess., deals with (1) notes and obligations to pay money and (2) assignments of compensation. It seems to me that there is but faint similarity between the obligation embodied in a note, promissory or nonnegotiable, to use the terminology of the act, and a covenant to pay money contained in a lease. It is true that a lease embodies an obligation to pay money, but under the rule of ejusdem generis it is not typical of those instruments primarily obligating the signatories to pay money.

A lease has been defined as "a conveyance by the owner of an estate to another of a portion of his interest therein for a term less than his own" and 'it passes a present interest in the land for the period specified,' Chandler et al.

v. Hart et al., 161 Cal. 405, 119 P. 516, 519, Ann.Cas.1913B, 1094, a definition which was approved by the Supreme Court of Ohio in Brenner et al. v. Spiegle, 116 Ohio St. 631, 157 N.E. 491. At common law estates for years were classified as chattels real and regarded as personal property. Dabney v. Edwards, 5 Cal.2d 1, 53 P.2d 962, 103 A.L.R. 822. Of similar import was the holding in Townsend v. Boyd, 217 Pa. 386, 66 A. 1099, 12, L.R.A.,N.S., 1148. The Supreme Court of Indiana in Watson v. Penn, 108 Jnd. 21, 8 N.E. 636, 58 Am.Rep. 26, held that the part of a lease not completed was a chattel real.

An outright obligation to pay money, as contemplated in the statute, Section 201.08, and an obligation which flows from a lease are easily distinguishable. The latter is contingent, and the undertaking to pay rent periodically ripens into a debt only as the times for payments of rent arrive. Calechman et al. v. Great Atlantic & Pacific Tea Co., 120 Conn. 265, 180 A. 450, 100 A.L.R. 302. In other words, the debt becomes fixed from time to time as the amount of rental is earned by the use of the property by the lessee. An obligation for the full amount that the lessor would eventually receive from the lessee for the occupancy of the property for the entire time mentioned in the lease would not be established merely upon the execution of the instrument, for 'rent does not accrue to the lessor as a debt or claim, unless payable in advance, until the lessee has enjoyed the use of the premises. It may never become due; for the lessee may be evicted, or the premises become untenable. It is neither debitum nor solvendum. It is not an existing demand, the cause of action on which depends on a contingency, but the very existence of the demand depends on a contingency. It is wholly uncertain whether the lease will ever give rise to an actual debt or liability.' Wilder v. Estate of Bristol, 37 Minn. 248, 33 N.W. 852.

The undertaking of a lessee to pay the rental at specified periods is no more a written obligation to pay money then was the contract under study in the case of Metropolis Publishing Co. v. Lee, 126 Fla. 107, 170 So. 442. See also Lee v. Kenan, 5 Cir., 78 F.2d 425.

The Chancellor was importuned to hold that leases were not subject to any documentary tax at all, but according to his memorandum filed with the decree he confined his observations to taxability under Section 201.08. We might dismiss the matter with a decision that such instruments were not taxable under that section, but in view of the prayer of the bill we shall go one step farther and say that they are taxable under Section 201.02 as involving an interest in land. Not only is this view sustained by some of the authorities we have already cited, but it is also bolstered by the following decisions of this court: Rogers v. Martin, 87 Fla. 204, 99 So. 551; Baker v. Clifford-Mathew Investment Co., 99 Fla. 1229, 128 So. 827; Gibson v. Longino, 111 Fla. 533, 149 So. 592.

The decree of the Chancellor should be reversed, with directions to proceed in accordance with the above views. And we recede from anything said in Dundee v. Lee to the contrary.

It is so ordered.

BUFORD, ADAMS, and BARNS, JJ., concur.

TERRELL and CHAPMAN, JJ., dissent.

SEBRING, J., not participating.

On...