Gables Racing Assoc., Inc. v. Persky

6 So. 2d 257, 148 Fla. 627, 1940 Fla. LEXIS 995

• Court: Supreme Court of Florida
• Decided: October 25, 1940
• Status: Published

Opinions

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] On May 3, 1932, Robert Persky filed a bill of complaint in the Circuit Court of Dade County, Florida, to enforce a mortgage lien against the Gables Racing Assoc., Inc. The mortgage was dated July 20, 1931, and given to secure the payment of a promissory note in the sum of $15,000.00 payable to Nator Holding Company, and the note fell due on or before May 1, 1932. The mortgage covered approximately twenty-five acres of land located in Dade County, Florida. On June 19, 1931, the Nator Holding Company was indebted to Simon Persky in the sum of $19,900.00 and executed its promissory note as evidence thereof and the same was payable to Simon Persky and became due on or before May 1, 1932. To secure the payment of the said indebtedness in the sum of $19,900.00 due to Simon Persky the Nator Holding Company assigned to him the Gables Racing Assoc., Inc., note and mortgage to the Nator Holding Company.

The note in the sum of $19,900.00 from the Nator Holding Company to Simon Persky was transferred by endorsement to Robert Persky, together with the note and mortgage given by Gables Racing Assoc., Inc., to Nator Holding Company to secure its indebtedness to Simon Persky, and each of said instruments were transferred or endorsed to Robert Persky before maturity.

The bill to enforce the mortgage lien filed under date of May 3, 1932, by Robert Persky was by an order of the Court amended. The Gables Racing Assoc., Inc., and the Nator Holding Company filed separate motions to dismiss the amended bill of complaint and thereby challenged the sufficiency of the amended bill as to the ownership of Robert Persky of the Gables Racing Assoc. note and mortgage and his right to maintain foreclosure proceedings. There was a motion to require the Gables Racing Assoc. to produce certain books and papers, and from an order overruling and denying the motion to dismiss the amended bill and the order requiring the Gables Racing Assoc. to produce certain books and papers alleged to be material to the litigation, an appeal was taken to this Court, and the order entered by the lower court overruling the motion to dismiss the amended bill of complaint was affirmed and the order requiring the Gables Racing Assoc. to produce certain books and papers was modified. See Gables Racing Assoc., Inc., v. Persky, et al., 116 Fla. 77,156 So. 392.

The Gables Racing Assoc., after the return of the mandate to the Circuit Court of Dade County, filed its answer to the amended bill of complaint in which it denied that the mortgage from the Gables Racing Assoc. to the Nator Holding Company, and transferred and endorsed to Robert Persky, was executed by the Gables Racing Assoc., and denied that the said alleged mortgage was an obligation of the Association or a lien upon the property described in the mortgage, but admitted that the Gables Racing Assoc., at the time of the filing of the answer, was in possession of the real estate described in the mortgage.

Testimony on the issues made by the pleadings was taken before the chancellor and a number of Exhibits were offered in evidence by plaintiff below, and many of the Exhibits and much of the testimony were admitted for the purpose of the record, and the court reserved its ruling thereon, subject to a motion to strike. Later the motion to strike certain of plaintiff's testimony and Exhibits was by the lower court overruled and extended argument on final hearing was had.

On June 5, 1936, the chancellor entered an order permitting or allowing the plaintiff below to amend the bill of complaint to conform to said proof, and in the same order the motion to strike certain testimony and Exhibits of the plaintiff was denied. From the order denying the motion to strike the testimony and Exhibits and allowing the filing of the amended bill to conform to proof and the order overruling the motion to dismiss, a second appeal was perfected to this Court. The order entered by the lower court: (a) denying the motion to dismiss; (b) denying the motion to strike testimony and Exhibits of plaintiff; and (c) allowing the filing of the amended bill so as to conform to the proof, was affirmed by this Court. See Gables Racing Assoc., Inc. v. Persky, 131 Fla. 842, 180 So. 24.

The Gables Racing Assoc., Inc., after the return of the mandate on the second appeal, filed its answer to the re-amended bill raising in part issues viz: (1) the note and mortgage sought to be foreclosed as the obligations of Gables Racing Assoc., Inc., were not its instruments but were forgeries; (2) that Samuel Kantor was not the President, or Rose Kantor, his wife, the Secretary, or officer or agents of Gables Racing Assoc., Inc., and were without authority to bind the Association or mortgage its real estate; (3) that Simon Persky and Samuel Kantor were joint adventurers; (4) that Samuel Kantor and Emmett Choate were joint adventurers; (5) that the money advanced by Persky was to Samuel Kantor, personally, and not to Gables Racing Assoc., Inc., (6) that Simon Persky never owned a lien against the real estate of Gables Racing Assoc., Inc., either as a conventional instrument or evidence of an equitable lien; (7) if Simon Persky was the owner of an equitable lien, the same was lost and is not now enforceable because they failed to assert their claim or record their lien or advise innocent parties then expending money upon the appearance and status of the record of Dade County, Florida.

The case came on to be heard on final hearing on the testimony previously taken and Exhibits offered by the plaintiff before the chancellor and the re-amended bill of complaint to conform thereto, and the testimony of the defendant and Exhibits in support of its answer to the re-amended bill. The chancellor below found the equities to be with the plaintiff and decreed that the plaintiff's note and mortgage were valid and enforceable as an equitable lien against the interests of the Gables Racing Assoc., Inc., in the race track property described in the mortgage; and further decreed that the property be sold to satisfy the unpaid principal, interest, attorneys fees, and court costs, and from the final decree the case makes its appearance here for the third time.

The assignments of error argued on this appeal are based on the different provisions of the final decree and the order dated May 25, 1939, overruling the petition of Gables Racing Assoc., Inc., for a rehearing. In the second appeal this court upheld the ruling of the lower court in permitting and allowing amendments to the amended bill containing a prayer to the effect that if the court shall find that the note and mortgage are unenforceable as formal conventional instruments that the court may decree that Robert Persky have an equitable mortgage lien upon the real property described in said note and mortgage.

The Court, in Gables Racing Assoc., Inc. v. Persky,supra, 131 Fla. text pages 846-47, said:

"The re-amended bill is rather verbose and contains matters that are not altogether necessary, but it does not appear that the chancellor erred in holding that 'and the court finds that the allegations of said proposed amendment to plaintiff's bill conform substantially to the proof heretofore submitted to the court herein, and that the plaintiff's said amendment to his amended bill should be permitted to be filed, to conform to the evidence taken before the court and the exhibits filed herein, in order to do justice between the parties and to avoid unnecessary litigation and in order that the entire matter may be disposed of in this suit;' etc. But changing the bill so that the court might enforce it as an equitable mortgage or lien and a prayer to that effect is not a new and different cause of action and the chancellor correctly allowed such an amendment in view of the fact that he allowed further pleadings on the part of the defendant.

"The court has examined the exhibits and testimony objected to by defendant in his motion to strike. We are inclined to agree with the chancellor below in saying, 'the plaintiff's testimony and exhibits are not wholly immaterial or irrelevant to plaintiff's bill and said amendments thereto.' " . . .

"Some of the grounds of the motion to dismiss, raise close and difficult questions, but it does not clearly appear that the chancellor's rulings were erroneous. We find therefore that the chancellor should be affirmed in his ruling on these two motions, and it is so ordered. Remanded for further proceedings not inconsistent with this holding."

The amended bill of complaint to conform to the testimony and exhibits offered by the plaintiff was fully approved by this Court in the case supra. On April 12, 1935, the Gables Racing Assoc., Inc., at the close of the taking of testimony in chief by the plaintiff below, filed a motion consisting of approximately 20 pages and containing 43 separate grounds, and said grounds possessed a number of subdivisions, and the motion was for the purpose of striking described testimony and exhibits offered by the plaintiff. It appears that the motion was directed to and applied to practically, if not all, of the testimony and exhibits offered in chief by the plaintiff. This motion was overruled and denied by the lower court and on appeal here was affirmed. See Gables Racing Assoc., Inc. v. Persky, 131 Fla. 842, 180 So. 24. It is necessary now to consider all the testimony and exhibits adduced on the part of Gables Racing Assoc., Inc., and then determine from all the evidence offered by the parties whether or not there is error in the record and final decree. The controversy here, as disclosed by the record, consists of disputed and conflicting issues of fact.

The testimony shows that H.J. Spurway, Receiver, on July 7, 1931, pursuant to an order of the Federal District Court, executed a deed to Gables Racing Association, Inc., conveying the land involved in this suit. The consideration for the property was $5,000.00 in cash and a purchase price mortgage in the total sum of $15,000.00. The mortgage and the two notes in the sum of $7,500.00 each were signed by Gables Racing Assoc., Inc., by Emmet C. Choate, president, and attested by R. Gordon, secretary. The check in the sum of $5,000.00 was signed by the same company and officers and dated July 8, 1931, and drawn on the First National Bank of Miami. The purchase price mortgage was recorded and subsequently paid. Samuel Kantor, on July 8, 1931, deposited to the credit of Gables Racing Assoc., Inc., the sum of $5,100.00 and the initial payment on the land was drawn on this account.

The basis of the suit at bar is a note in the sum of $15,000.00 and a mortgage securing the same, each dated July 20, 1931, and payable to the Nator Holding Company and signed by Gables Racing Assoc., Inc., by Samuel Kantor, president, and Rose Kantor, secretary, and a scroll used as a seal, and embraced the lands described in the conveyance from Spurway to Gables Racing Assoc., Inc. "The mortgage was not recorded until March 4, 1932." The mortgage was drafted by Miami attorneys representing Simon Persky and was to secure the payment of an indebtedness due him by Samuel Kantor, and it asserted that the money obtained by Samuel Kantor from Simon Persky financed in part the purchase of the twenty-five acres of land from Spurway, Receiver, to Gables Racing Assoc., Inc. The minutes of the Gables Racing Assoc., Inc., were written by Mr. Choate and retained in his office. The stock of the Company as issued was in the name of Rose Kanor and Choate. Application for a racing permit in behalf of the Gables Racing Assoc., Inc., through attorney Choate was made and ultimately issued.

The Bruen interests became interested in and later purchased the entire holdings of Gables Racing Assoc., Inc., and approximately $500,000.00 additional stock issued by the corporation and additional lands purchased and the track developed. The public records were carefully examined, the minute books and other papers of Gables Racing Assoc., Inc., were studied and investigated. The minutes of the corporation dated August 3, 1931, and identified as plaintiff's Exhibit No. 70, as prepared by Mr. Choate, were altered or changed by counsel for the Bruen interests. The Bruen interests, after the purchase of the Gables Racing Assoc., Inc., interests, continued to operate under the charter of the Gables Racing Assoc., Inc., and expended thousands of dollars in the completion of the racing plant and takes the position that it is inequitable to permit or allow the endorsement of the non-recorded mortgage given by the Gables Racing Assoc., Inc., through its officers Samuel Kantor, president, and wife, Rose Kantor, secretary. Several hundred pages of testimony was taken and the same has been carefully read, studied and considered by this Court. There is a presumption of the correctness of the ruling of the lower court and the burden of showing error rests on the party asserting that error was committed. See Britt v. State, 88 Fla. 482, 102 So. 761; State v. Merritt, 86 Fla. 164,99 So. 230; Hoodless v. Jernigan, 51 Fla. 211, 41 So. 194; Clements v. State, 51 Fla. 6, 40 So. 432; Stover v. Stovall,103 Fla. 284, 137 So. 249.

It is our conclusion that the testimony of the respective parties adduced at the trial presented purely conflicting and disputed questions of fact for the chancellor to determine. We cannot by a study and conscientious consideration of all the testimony and exhibits, say that the chancellor abused his discretion by entering the final decree assigned as error. We are not authorized under the law to substitute our views or conclusions on the facts for the findings of the chancellor in the absence of a showing of abuse of discretion. We cannot on this record hold that the chancellor misinterpreted the probative force or the weight of the testimony or was guided by considerations dehors the record.

The findings of a chancellor based on conflicting evidence will not be disturbed unless they are clearly shown to be erroneous. See Meola v. Sparks, 138 Fla. 364, 189 So. 408; Cuno Corporation v. Lamb, 138 Fla. 773, 190 So. 246; Durham v. Durham, 137 Fla. 506, 188 So. 609; Gross v. Hammond, 138 Fla. 20,188 So. 789.

The decree appealed from is hereby affirmed.

WHITFIELD, C. J., and CHAPMAN, J., concur.

BROWN, J., concurs in conclusion.

BUFORD, J., concurs in opinion and judgment.

Chief Justice TERRELL and Justice THOMAS not participating as authorized by Sec. 4637 Comp. Gen. Laws of 1927 and Rule 21-A of the Rules of this Court.

ON REHEARING