Yates v. St. Johns Beach Development Co.

• Decision Date: 19 March 1935
• Citation: 118 Fla. 788,160 So. 197
• Parties: YATES et al. v. ST. JOHNS BEACH DEVELOPMENT CO. et al.
• Court: Florida Supreme Court

160 So. 197

118 Fla. 788

YATES et al. v. ST. JOHNS BEACH DEVELOPMENT CO. et al.

Florida Supreme Court

March 19, 1935

Rehearing Denied April 5, 1935.

En Banc.

Suit by James A. Yates, as trustee, and others against St. Johns Beach Development Company and others.From an order dismissing complainants' second amended bill of complaint for want of equity, complainants appeal.

Reversed and remanded.Appeal from Circuit Court, Duval County; De Witt T. Gray, judge.

COUNSEL

Robert H. Anderson and Harry T. Gray, both of Jacksonville, for appellants.

George M. Powell, of Jacksonville, for appellees.

OPINION

DAVIS Justice.

This is another episode in the litigation previously considered by this court in the following phases: Yates v. Peninsular Securities Corporation,107 Fla. 802, 144 So. 664, 145 So. 69;Yates v. St. Johns Beach Development Co.,112 Fla. 229, 150 So. 284.The present case is now before us on an appeal from an order dismissing the complainants' second amended bill of complaint for want of equity.

The bill, as amended, alleged that certain individual defendants desiring to acquire lands encumbered by several mortgages and to obtain time within which to pay for same agreed with the holders of certain second mortgage bonds then in default and that if such second mortgage bondholders would waive existing defaults, accept a delayed interest payment, and reinstate an agreement for extension of their mortgage, that then such defendants described in the bill as 'the DuPont Interests' would form and adequately capitalize a corporation to take over the property in which event either said defendants, or said corporation, would at all times meet the payments of principal and interest to become due on said second mortgage bonds and would give protection thereto against the first mortgage, so as to make the second mortgage good in all respects.The first mortgage bonds aggregated $600,000; the second mortgage bonds were $125,000.

It is further alleged that on June 1, 1927, said second mortgage bonds were in default as to principal and interest and were then foreclosable; that on June 1, 1928 said 'DuPont Interests,' said defendants(appellees here) through their thereunto authorized representative, one N. D. Suttles, duly made the arrangement and agreement aforesaid; that the second mortgage bondholders, and their then trustee(since succeeded by one James A. Yates) accepted and agreed to said proposal of the 'DuPont Interests'; that in pursuance thereto they afterwards accepted a delayed payment of interest and reinstated an agreement previously made by them for extension of the second mortgage for a period of five years from June 1, 1927; that subsequently said 'DuPont Interests' complied with the Suttles agreement and undertaking on their behalf for a considerable length of time; that according to said partially executed plan Mr. Edward Ball, one of the defendants, who is alleged to constitute one of the defendants described as the 'DuPont Interests,' actually formed a Florida corporation under the name of St Johns Beach Development Company, into which was passed the title to the land first hereinbefore referred to; that after making the agreement and arrangement aforesaid, and before an interest payment was made on June 11, 1928, that Suttles, still acting as agent for the 'DuPont Interests,' suggested a proposal for foreclosure of the second mortgage in order to carry out a plan being arranged for by Mr. Ball in conjunction with certain third mortgage bondholders; that some time thereafter the said defendants'the DuPont Interests' and the corporation, St. Johns Beach Development Company, undertook to repudiate their agreement and undertaking to protect the second mortgage bondholders against foreclosure of the first mortgage, in consequence of which suit to foreclose the first mortgage had been brought to the prejudice of the second mortgage bondholders who are represented in this case by the appellants who sue as owners of the second mortgage bonds and as trustee.

The prayer of the second amended bill is as follows:

'Orators therefore pray that the defendants, severally, be required to answer this amended bill, but not under oath, the answer under oath being hereby expressly waived; and upon hearing may the Court decree that the defendantsEdward Ball, Alfred I. DuPont and Almours Securities, Inc., severally obligated themselves to give protection to the bonds of your orators and to meet the payments of principal and interest due thereon, so as to make said bonds good in all respects; may an appropriate decree be entered requiring said defendants to comply with their said undertaking, either directly or through their corporation (the defendant, St. Johns Beach Development Company) and, if defendants elect to comply through said corporation, may they be required to supply said Company with funds adequate for that purpose; may an accounting be taken in this cause to determine the sums which orators are lawfully entitled to receive and may orators have such other and further relief in the premises as the nature of the case may require and as to your Honors shall seem meet and proper.'

The theory of appellants' suit was in the nature of a bill for specific performance to compel the defendants, described in the bill as 'the DuPont Interests,' to perform and carry out their alleged promise, undertaking an engagement to make good the second mortgage bonds in manner and form as alleged in consideration of the acts and things done by said second mortgage...