Johnson,
Circuit Judge.
The appellant in this case, who was the complainant in the court below, filed in the Circuit Court for Dade County, Florida, a creditor’s bill praying that certain parcels of land, described in the bill of complaint, be decreed to be subject to a judgment and execution obtained by the appellant against the defendant, Ostend Realty Company, and praying that certain deeds by the said Ostend Realty Company to the several defendants, other than the Ostend Realty Company, be decreed to be fraudulent as to appellant’s judgment and execution.
The bill of complaint divides the lands into four parcels. This for convenience, and for a better understanding of the facts and conveyances as to each parcel.
The salient facts as disclosed by the record are:
It appears from the record in this case that the defendant, Clarence M. Busch, on his own behalf and on behalf of his
wife, Bonnie M. Busch, was in the real estate business in Dade County, Florida. The record discloses that it was in the year 1925 and subsequent years. Deeds to four parcels of land are brought into question by the bill of complaint. It appears that when a tract or parcel of land was purchased a deed to same would be taken to the defendant, Ostend Realty Company, a corporation. • This defendant corporation was a New York corporation qualified to do business in the State of Florida. The defendant, Clarence M. Busch, controlled the corporation, owning all the stock except a sufficient number of shares in the names of other persons to make it a legal corporation. The testimony discloses that the corporation had no assets; that it had practically ceased to do business since 1920; that the corporation was only used as a convenience and a medium for taking title to the lands purchased, and until such title should pass to the beneficial owner. It appears from the testimony that this corporation had no funds of its own, and never invested one dollar in any of the lands purchased, the title to which is questioned by the bill of complaint. It appears that, in instances, the lands purchased were subject to large outstanding mortgages, and in some -instances several mortgages that had to be taken care of, and-the payment thereof assumed by the purchaser. In addition to this notes and mortgages had to be given to evidence and secure an unpaid balance of the purchase price. As we see it the corporation was used for the purpose that each transaction, or purchase of land, would stand or fall on its own merits. That the lands purchased would stand for security for all outstanding mortgages against the land so purchased, and would also stand for security for any balance due on the purchase price.
It appears from the testimony that “Parcels” No. 1 and No. 4 were purchased with funds of the defendant, Bonnie
M. Busch. Title to these two parcels was originally taken in the name of the Ostend Realty Company, but later the two parcels were conveyed to the defendant, Bonnie M. Busch, the beneficial owner.
It appears from the testimony that “Parcels” No. 2 and No. 3 were purchased by the defendant, Clarence M. Busch, pn his own account. The balance due on the purchase price of Parcel No. 3 gave rise to the present suit. Title to these two parcels were originally taken in the name of the Ostend Realty Company.
The contract for the purchase of Parcel No. 3 was entered into on August 29th, 1925. The purchase price was $55,000.00. We quote:
“Terms and conditions of sale: Five Thousand Dollars cash, receipt of which is hereby acknowledged, Thirteen Thousand Three Hundred and Thirty-three and 33/100 ($13,333.33) dollars on 'or before thirty days from date of August 29th, 1925; assume first and second mortgages for $5,500.00 each due 1, 2 and 3 years from January 2, 1925/ interest 8 per cent.; assume third mortgage for $10,250.00, due 1, 2 and 3 years from approximately May 20, 1925, interest 8 per cent.; balance in one year from closing this sale at 8 per cent, interest, payable semi-annually said balance to be evidenced by promissory notes secured by a fourth mortgage on the property herein described for $10,416.67. Interest prorated to date, of closing this sale. Purchaser pays taxes subsequent to date of settlement.”
In pursuance of this contract a deed of conveyance was made to this parcel of land, Parcel No. 3. The deed is dated September 15th, 1925. The deed was executed by H. G. Cook and C. H. Cook, co-partners doing business as Biscayne Realty Company, their wives joining. The deed
was given subject to the three mortgages as set forth in the contract of purchase.
It appears that the note and mortgage given by the Ostend Realty Company, grantee in the deed, as evidencing and securing the balance of the purchase price, $10,416.67, were executed and delivered to, and in the name of, Biseayne Realty and Insurance Company, mortgagee, and the complainant in this cause.
The complainant in this cause, Biseayne Realty & Insurance Co., doesn’t bring suit to foreclose its mortgage but goes into the law side of the court and secures a judgment. This it had a right to do under the holding of this Court in the cases of Webber v. Blanc, 39 Fla. 224, and J. J. Sparks Enterprise, Inc., v. Christian, 85 Fla. 928.
After all the testimony had been taken and the report of the Master in Chancery thereon filed the complainant, by leave of the Court, filed a supplemental bill of complaint. The supplemental bill of complaint sets forth that the transaction in which this promissory note was given was a transaction by, and for the benefit of, the defendant, Clarence M. Busch, and that by reason of this the said Clarence M. Busch was personally liable on the said note. The supplemental bill prayed that the judgment against the Ostend Realty Co. be decreed to be a judgment against Clarence M. Busch personally; that he, Busch, be decreed to pay and that execution issue therefor. A demurrer to the supplemental bill was sustained. A final decree was entered in favor of the defendants.
The complainant, appellant, makes three assignments of error: first, that the Court erred in sustaining defendants’ demurrer to the supplemental bill of complaint; second, that the Court erred in sustaining certain exceptions to the Mas
ter’s report; and third, that the Court erred in rendering final decree in favor of the defendants.
As to the first assignment of error. The supplemental bill was based on the general proposition that an individual •cannot transact his personal business, or personally reap the benefits of a transaction, to the injury or detriment of a third person, and escape liability under a corporate cloak. And likewise that a corporation cannot escape liability under the •cloak of an individual. Holding that the courts look to the substance of the transaction and not to the form. In examining the cases holding to this doctrine we find the underlying principle to be the prevention of fraud. The leading case cited by appellant is the case of Donovan v. Purtell, 216 Ill. 629, 75 N. E. 334, 1 L. R. A. (NS) 176. In this case it appears that Donovan collected $1,200.00 belonging to Purtell. Donovan was the dominant and controlling stockholder in two corporations used by him in his business.
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Johnson,
Circuit Judge.
The appellant in this case, who was the complainant in the court below, filed in the Circuit Court for Dade County, Florida, a creditor’s bill praying that certain parcels of land, described in the bill of complaint, be decreed to be subject to a judgment and execution obtained by the appellant against the defendant, Ostend Realty Company, and praying that certain deeds by the said Ostend Realty Company to the several defendants, other than the Ostend Realty Company, be decreed to be fraudulent as to appellant’s judgment and execution.
The bill of complaint divides the lands into four parcels. This for convenience, and for a better understanding of the facts and conveyances as to each parcel.
The salient facts as disclosed by the record are:
It appears from the record in this case that the defendant, Clarence M. Busch, on his own behalf and on behalf of his
wife, Bonnie M. Busch, was in the real estate business in Dade County, Florida. The record discloses that it was in the year 1925 and subsequent years. Deeds to four parcels of land are brought into question by the bill of complaint. It appears that when a tract or parcel of land was purchased a deed to same would be taken to the defendant, Ostend Realty Company, a corporation. • This defendant corporation was a New York corporation qualified to do business in the State of Florida. The defendant, Clarence M. Busch, controlled the corporation, owning all the stock except a sufficient number of shares in the names of other persons to make it a legal corporation. The testimony discloses that the corporation had no assets; that it had practically ceased to do business since 1920; that the corporation was only used as a convenience and a medium for taking title to the lands purchased, and until such title should pass to the beneficial owner. It appears from the testimony that this corporation had no funds of its own, and never invested one dollar in any of the lands purchased, the title to which is questioned by the bill of complaint. It appears that, in instances, the lands purchased were subject to large outstanding mortgages, and in some -instances several mortgages that had to be taken care of, and-the payment thereof assumed by the purchaser. In addition to this notes and mortgages had to be given to evidence and secure an unpaid balance of the purchase price. As we see it the corporation was used for the purpose that each transaction, or purchase of land, would stand or fall on its own merits. That the lands purchased would stand for security for all outstanding mortgages against the land so purchased, and would also stand for security for any balance due on the purchase price.
It appears from the testimony that “Parcels” No. 1 and No. 4 were purchased with funds of the defendant, Bonnie
M. Busch. Title to these two parcels was originally taken in the name of the Ostend Realty Company, but later the two parcels were conveyed to the defendant, Bonnie M. Busch, the beneficial owner.
It appears from the testimony that “Parcels” No. 2 and No. 3 were purchased by the defendant, Clarence M. Busch, pn his own account. The balance due on the purchase price of Parcel No. 3 gave rise to the present suit. Title to these two parcels were originally taken in the name of the Ostend Realty Company.
The contract for the purchase of Parcel No. 3 was entered into on August 29th, 1925. The purchase price was $55,000.00. We quote:
“Terms and conditions of sale: Five Thousand Dollars cash, receipt of which is hereby acknowledged, Thirteen Thousand Three Hundred and Thirty-three and 33/100 ($13,333.33) dollars on 'or before thirty days from date of August 29th, 1925; assume first and second mortgages for $5,500.00 each due 1, 2 and 3 years from January 2, 1925/ interest 8 per cent.; assume third mortgage for $10,250.00, due 1, 2 and 3 years from approximately May 20, 1925, interest 8 per cent.; balance in one year from closing this sale at 8 per cent, interest, payable semi-annually said balance to be evidenced by promissory notes secured by a fourth mortgage on the property herein described for $10,416.67. Interest prorated to date, of closing this sale. Purchaser pays taxes subsequent to date of settlement.”
In pursuance of this contract a deed of conveyance was made to this parcel of land, Parcel No. 3. The deed is dated September 15th, 1925. The deed was executed by H. G. Cook and C. H. Cook, co-partners doing business as Biscayne Realty Company, their wives joining. The deed
was given subject to the three mortgages as set forth in the contract of purchase.
It appears that the note and mortgage given by the Ostend Realty Company, grantee in the deed, as evidencing and securing the balance of the purchase price, $10,416.67, were executed and delivered to, and in the name of, Biseayne Realty and Insurance Company, mortgagee, and the complainant in this cause.
The complainant in this cause, Biseayne Realty & Insurance Co., doesn’t bring suit to foreclose its mortgage but goes into the law side of the court and secures a judgment. This it had a right to do under the holding of this Court in the cases of Webber v. Blanc, 39 Fla. 224, and J. J. Sparks Enterprise, Inc., v. Christian, 85 Fla. 928.
After all the testimony had been taken and the report of the Master in Chancery thereon filed the complainant, by leave of the Court, filed a supplemental bill of complaint. The supplemental bill of complaint sets forth that the transaction in which this promissory note was given was a transaction by, and for the benefit of, the defendant, Clarence M. Busch, and that by reason of this the said Clarence M. Busch was personally liable on the said note. The supplemental bill prayed that the judgment against the Ostend Realty Co. be decreed to be a judgment against Clarence M. Busch personally; that he, Busch, be decreed to pay and that execution issue therefor. A demurrer to the supplemental bill was sustained. A final decree was entered in favor of the defendants.
The complainant, appellant, makes three assignments of error: first, that the Court erred in sustaining defendants’ demurrer to the supplemental bill of complaint; second, that the Court erred in sustaining certain exceptions to the Mas
ter’s report; and third, that the Court erred in rendering final decree in favor of the defendants.
As to the first assignment of error. The supplemental bill was based on the general proposition that an individual •cannot transact his personal business, or personally reap the benefits of a transaction, to the injury or detriment of a third person, and escape liability under a corporate cloak. And likewise that a corporation cannot escape liability under the •cloak of an individual. Holding that the courts look to the substance of the transaction and not to the form. In examining the cases holding to this doctrine we find the underlying principle to be the prevention of fraud. The leading case cited by appellant is the case of Donovan v. Purtell, 216 Ill. 629, 75 N. E. 334, 1 L. R. A. (NS) 176. In this case it appears that Donovan collected $1,200.00 belonging to Purtell. Donovan was the dominant and controlling stockholder in two corporations used by him in his business. He undertook to use the $1,200.00 and satisfy Purtell with inadequate security and obligations of the corporation. Purtell brought suit against Donovan for money had and received and the court sustained her action. In this case the Court said:
“The proof tends to show that, when appellant received appellee’s money, he was not conducting business under a bona fide corporate organization, but was using a corporate entity for the transaction of his private business, and, as he was, therefore, personally liable to the appellee for the repayment of her money, his promise was to pay his own debt, and not the debt of a third person.”
In examining cases holding to this doctrine we find that the courts grant relief in the particular case to prevent a fraud. We find that the relief is granted in a proper proceeding either in law or in equity.
The promissory note, which was the basis for the final judgment against the defendant, Ostend Realty Co., was given by the Ostend Realty Co., as evidencing the balance due for the purchase price for the lands described in Parcel No. 3, as set forth in the bill of complaint. The total purchase price to be paid for this parcel of land was $55,000.00. More than $18,000.00 of this amount was paid in cash. The conveyance to the land was made subject to three outstanding mortgages aggregating $21,250.00. The balance due of the purchase price, $10,416.67, as evidenced by the promissory note sued on, was secured by a purchase money mortgage on the lands so purchased and conveyed. We cannot see where any fraud was perpetrated, or undertaken tó be perpetrated, in this transaction.
If we admit that there was merit in the matter set up in the supplemental bill of complaint then the complainant, Biscayne Realty & Insurance Company, had three courses, or remedies available;
First, it could have pursued the remedy of obtaining judgment against Ostend Realty Co., it did pursue, or, second, it could have sued the defendant, Clarence M. Busch, doing business in the name of Ostend Realty Co., and have obtained whatever judgment the court found it entitled, or, third, it could have brought suit to foreclose its mortgage. In a suit to foreclose the mortgage, if the facts developed warranted, a supplemental bill might have been in order, or, a bill in the nature of a bill of review might have obtained if timely filed.
, Prior to the enactment of Chapter 5137, Acts 1903, (Sec. 5035 C. G. L. 1917) a creditors’ bill would not be entertained except on a final judgment and execution thereon returned
nulla "bona
Section 5035 C. G. L. now provides:
“A creditors’ bill may be filed in the courts of this State,
having chancery jurisdiction, before the claims of indebtedness of the persons filing the same shall have been reduced to judgment, but no such bill shall be entertained by such court, unless the complainants therein shall have first instituted suits in the proper courts at law for the collection of their claims; and no final decree shall be entered upon such creditors’ bill until such claims shall have been reduced to judgment.”
We have found no authority of law that would sanction the decreeing of a judgment, or the entry of a money decree, on a creditor’s bill such as was filed in this case.
After consideration it is our opinion that the second and third assignment of errors are not well taken.
Finding no error, the decrees appealed from are affirmed.
Davis, C. J., and Whitfield, Terrell and Buford, J. J., concur.