Bornstein v. Somerson

341 So. 2d 1043, 21 U.C.C. Rep. Serv. (West) 36
CourtDistrict Court of Appeal of Florida
DecidedJanuary 26, 1977
Docket75-813
StatusPublished
Cited by21 cases

This text of 341 So. 2d 1043 (Bornstein v. Somerson) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bornstein v. Somerson, 341 So. 2d 1043, 21 U.C.C. Rep. Serv. (West) 36 (Fla. Ct. App. 1977).

Opinion

341 So.2d 1043 (1977)

Jerome J. BORNSTEIN, Individually and As Trustee, Appellant,
v.
Herbert SOMERSON et al., Appellees.

No. 75-813.

District Court of Appeal of Florida, Second District.

January 26, 1977.
Rehearing Denied February 24, 1977.

*1044 Robert G. Petree, Orlando, for appellant.

Michael J. Freedman and Richard A. Hirsch of Levine, Freedman & Hirsch, Tampa, for appellees Herbert Somerson, Irving Weissman and Daniel Keidan.

Eugene W. Harris of Peterson, Carr, Harris & Seacrest, Lakeland, for appellee B.C. Cook & Sons Enterprises, Inc.

Robert E. Puterbaugh of Woolfolk, Myers, Curtis, Craig & Crews, Lake Wales, for appellees Robert E. and Edward H. Parker.

HOBSON, Acting Chief Judge.

In this mortgage foreclosure proceeding plaintiff/appellant, mortgagee, appeals the final judgment holding, inter alia, that the crop of citrus fruit was constructively severed from the mortgaged realty and that the proceeds from the sale of said fruit accrued to the benefit of the defendants, mortgagor and its caretaker, less expenses deducted for maintenance of the property during receivership. In the court below two cases[1] were consolidated and this appeal is taken from the final judgment entered in the consolidated cases following trial. We affirm.

In March of 1973 mortgagors, Somerson, Keiden, and Weissman [hereinafter Somerson], purchased a 330-acre citrus grove from mortgagee, Bornstein, evidencing a portion of the purchase price by a purchase money mortgage and note in the amount of $3,187,500. At the time of sale all that year's crop had been harvested by the mortgagee with the exception of some late bloom fruit which was excluded from that sale by specific reservation in the deed and in the mortgage. The mortgagee did not specifically reserve any lien or security interest on any future crops subsequent to July 1, 1973. The mortgage also provided that "... the property herein described is and shall be the sole security for any and all sums due the mortgagee . . and in the event of default, the mortgagee shall not be entitled to a deficiency judgment against the mortgagor ..." The mortgage contained a standard caretaking clause obligating the mortgagors thereunder and an habendum clause which provided,

"To have and to hold the same, together with the tenements, hereditaments and appurtenances thereto belonging, and the rents, issues and profits thereof, unto the mortgagee, in fee simple."

Somerson thereafter employed appellee, Parker Brothers, to caretake the grove and sell, as an agent, the fruit for the 1973-74 season. The fruit was sold by Parker Brothers for Somerson for that year. Thereafter on June 18, 1974 Parker Brothers, on behalf of Somerson, negotiated and entered into an agreement with appellee B.C. Cook and Sons, Inc., a fruit buyer, to sell the 1974-75 fruit crop. The effect of this agreement is sharply disputed by the parties and forms the basis of the judgment below.

This document, designated "Purchase Agreement and Contract" provided that the seller (Somerson-Parker Brothers) "does hereby bargain, sell and transfer unto the buyer (B.C. Cook) all the fruit that meets the standards for the use agreed upon or specified in this contract at the time of picking the fruit ..." The contract further provided that, "Price of fruit, harvesting and delivery charges and harvesting dates shall be mutually agreed upon between the BUYER and SELLER before the fruit is harvested." The document also contained a provision for a ten cents handling charge per box in the event the seller sold *1045 to another buyer.[2] In the same manner failure on the part of the buyer would result in retention by the seller of any advance made by the buyer as well as the voiding of the contract. No advance was made by Cook toward the sale of the crop at execution of this document.[3]

A supplemental contract was executed between the parties for tangerines (a variety mentioned in the June 18 agreement) on September 16, 1974 and a $5,000 deposit was paid by Cook to Parker Brothers at that time.[4]

On October 10, 1974 mortgagee Bornstein initiated the mortgage foreclosure action and a receiver was appointed by the court. The complaint sought foreclosure on the real property described in the mortgage including the citrus grove and all citrus fruit then growing. None of the 1974-75 crop had been harvested as of this date. The receiver, acting upon court authority, took control of the citrus grove and employed Polo Grove Service, Inc. to perform caretaking during the term of the receivership. The 1974-75 fruit crop was subsequently sold by the receiver for the aggregate sum of $113,868.34, with all the fruit, except the navels, going to Cook pursuant to court direction.[5] The proceeds of this sale were vested in the receiver.

On May 12, 1975 the lower court entered its final judgment specifically finding that the agreement executed on June 18 constituted a contract for the sale of the 1974-75 fruit crop which constructively severed the fruit from the realty so as to remove the proceeds from the sale of the same from the lien of the mortgage. The court directed that the proceeds from the sale and expenses of receivership would be apportioned as follows:

(A) Caretaking expenses ($28,798.45) incurred by the receiver. That portion attributable to the harvested fruit crop and thereby benefitting the mortgagor $11,797.29. The remainder paid to Polo are attributable to the grove (mortgagee) and are to be paid by the same.
(B) Employment of fruit price estimator ($100) charged to the mortgagor.
(C) Receiver's fee ($1,750) primarily of benefit to mortgagee to be paid by Bornstein.
(D) 1974 real estate taxes, paid by the receiver ($8,864.98), charged to mortgagee.
(E) All remaining proceeds of the sale to be paid to mortgagors and Parker Brothers.[6]

The final judgment further provided for the sale of the property encumbered by the mortgage being foreclosed. The sale was held on May 29, 1975, and the mortgagee Bornstein bid in the property for the sum of $330,000.

This appeal presents for determination several issues of vital significance to the citrus industry in Florida. These questions may be summarized as follows:

*1046 (1) Whether an agreement which facially purports to be a contract, but lacks any price, harvesting date and harvesting and delivery charge, and was executed without any deposit being paid, can operate to constructively sever a citrus crop from the mortgage on the underlying citrus grove to the benefit of a mortgagor in a mortgage foreclosure action; and
(2) Whether a mortgage on realty, with a standard reservation of lien on "rents, issues and profits," can defeat the operation of the doctrine of constructive severance so as to vest the proceeds of the sale of a fruit crop, sold during foreclosure proceedings, in the mortgagee as a "profit" of the realty.

For the reasons stated herein, we answer the first question in the affirmative and the second in the negative.

It is axiomatic that in Florida crops of fruit are in general parts of the realty until severed. Simmons v. Williford, 60 Fla. 359, 53 So. 452 (1910); Adams v. Adams, 158 Fla. 173, 28 So.2d 254 (1946); Peer v. Willson, 210 So.2d 495 (Fla.App.2d DCA 1968); 9A Fla.Jur., Crops § 3.

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Bluebook (online)
341 So. 2d 1043, 21 U.C.C. Rep. Serv. (West) 36, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bornstein-v-somerson-fladistctapp-1977.