Opinion
April 15, 1952.
Morehead, Forrest, Brown Gotthardt, Miami, and Clarence E. Brown, Lake City, for petitioners.
Mitchell D. Price, Zaring Florence, Miami, for Carroll Bailey.
Jack R. Kirchik, Miami, for Selma Schwartz.
Goldstein, Klein, Burris Lehrman, Miami Beach, for Morris Gooler, William Jacobus and Earl Lehman.
Copeland, Therrel Baisden, Miami Beach, for Miami Beach First National Bank, for respondents.
Irving Nash, Milton Breger and David Becker, as lessors, in October, 1948, leased to Carroll Bailey the Churchill Apartment Hotel, with furniture, furnishings, linen and equipment. The term of the demised premises was for a period of three years, beginning December 1, 1948, and ending December 1, 1951, for the total rental of $81,000, which was due and payable viz.: $6,750 on December 28, 1948; $6,750 on February 10, 1949; $6,750 on March 1, 1949; $6,750 on March 10, 1949; $6,750 on December 28, 1949; $6,750 on February 10, 1950; $6,750 on March 10, 1950; $6,750 on January 10, 1951; $6,750 on February 10, 1951; $6,750 on March 1, 1951; and $6,750 on March 10, 1951.
In addition to the rent payments above specified the lessee shall pay the lessors the sum of $27,000. The total sum of $27,000 shall be security for the performance by the lessee of each and every article and stipulation of the lease and the return of the personal property by the lessee in as good condition when returned as when received, reasonable wear and tear excepted.
Paragraph 15 of the lease provides that in the default of the payment of rents as above set forth, or that the lessee violates any of the covenants of the lease, then the lessee shall become a tenant at sufferance and the lessors shall be entitled to enter and take immediate possession of the demised premises. Paragraph 16 provides that if the lease is cancelled by the lessors, for default of the lessee, at any time before the lessee becomes entitled to the return of said fund in accordance with the terms of this article, then the said security shall be and become the absolute and unconditional property of the lessors, who will retain it, not as a penalty, but as liquidating and agreed damages to the lessors accruing by reason of said default. Paragraph 20 provides for an assignment of the lease under certain terms, conditions and circumstances upon the written consent of the lessors.
The various covenants appearing in the lease as signed by the parties cover a broad field of activity and business relationships. No useful purpose will be served in setting out in extenso the several covenants of the lease. It appears that Carroll Bailey, lessee, took possession of the described property, complied with the several provisions of the lease, and in September, 1949, with the consent of the lessors, assigned the same to Morris Gooler, William Jacobus and Earl Lehman, who operated the hotel and possessed the personal property described in the lease until October, 1950, when they, with the approval of the lessors, assigned the lease to Selma Schwartz. In February 1951, Selma Schwartz defaulted in the payment of rent as stipulated in the lease. The lessors filed eviction proceedings against her and repossessed the hotel and other property described in the lease.
Bailey filed suit for a declaratory decree in the Circuit Court of Dade County against the lessors and others having operated the hotel under the lease by assignment, inclusive of Selma Schwartz, who defaulted in the payment of the rents in February, 1951, as provided for in the lease. Bailey alleged that the lessors then had in their possession and control the sum of $21,125 unrefunded of the original security deposit paid to the lessors under the terms and provisions of the lease. It was Bailey's contention that the lessors had the right under the terms of the lease to deduct from the $21,125 then in their possession the February, 1951, installment of rent in the sum of $6,750, leaving a balance in the sum of $14,375. Bailey further contended that the sum of $9,125 should be paid to him by the lessors and the sum of $5,250 should be paid to Selma Schwartz. The Court appointed a Receiver, who took over the hotel property and the bank account of Selma Schwartz. Prior to the Receiver's discharge he paid the amount of the bank account of Selma Schwartz into the registry of the Court, as directed so to do. It is not disputed that the lessors obtained a judgment of eviction against Selma Schwartz from the Churchill Apartment Hotel, and pursuant thereto were placed in the possession of the Churchill Apartment Hotel, with furniture, furnishings, linens and equipment under date of March 13, 1951. The Receiver was appointed March 1, 1951.
The defendants-petitioners (lessors) applied to this Court for an appropriate order in interlocutory certiorari quashing pertinent portions of a summary decree entered on motion of the parties to the cause. The decree is viz.:
"1. By reason of the actions taken by the lessors February 17, 1951, in sending to Selma Schwartz, among other, a written notice demanding immediate payment of the $6,750.00 rental payment due February 10, 1951 under the lease `* * * or possession of the premises within 5 days of the receipt of this notice, which is being served by registered mail and is authorized by Section 83.20 of the Statutes of the State of Florida [F.S.A.]' (said notice being attached as an exhibit in Dade County Civil Court of Record case number 47096): the actions taken by the lessors February 26, 1951, in instituting a landlord and tenant suit against Selma Schwartz as defendant for her removal from the Churchill Apartment Hotel premises: the recovery by said lessors on March 13, 1951 after a trial, of a judgment in said suit against said defendant, ordering the restoration of the premises to said lessors: the virtual simultaneous filing in this cause by the lessors March 1, 1951 of an answer to the plaintiff Carroll Bailey's complaint on the same date and the filing by said lessors of a cross-complaint herein, seeking a cancellation of the lease and praying the appointment of a receiver of the said premises: the entry by this Court during the forenoon of March 1, 1951 of an order appointing a receiver based upon the joint applications of the lessors and the original plaintiff Carroll Bailey and the dispossession from said premises of the said Selma Schwartz at the time of the appointment of said receiver: the entry of the orders of the Court discharging the receiver and the restoration of the premises by the receiver to the lessors at midnight, April 12, 1951; all constituted an election on the part of the lessors to recover and retake possession of the premises and by the operation of law constituted a waiver on the part of the lessors of the rights theretofore possessed by them under the lease to seek or recover against Carroll Bailey, the original lessee, Morris Gooler, William Jacobus and Earl Lehman, the original assignees, and Selma Schwartz, the last assignee, the unaccrued rental payments otherwise due and payable under the lease midnight, March 1, 1951, in the amount of $6,750.00, and midnight March 10, 1951 in the amount of $6,750.00; said March 1 and March 10 rental payments not being otherwise due and payable until midnight of said respective dates.
"2. As the time of the appointment of the receiver March 1, 1951 and at the present time of the original $27,000.00 security deposit on hand with the lessors under the terms of said lease, there still remains in the hands of said lessors unrefunded security deposit in the amount of $21,125.00. Of said sum the lessors are entitled to receive and deduct the accrued rental payment in the amount of $6,750.00 due midnight, February 10, 1951, which said sum was not paid to the lessors, leaving a net unrefunded security deposit in the hands of the lessors of $14,375.00. Said sum the lessors, regardless of the terms of the lease, cannot appropriate, either as a penalty or a forfeiture or under the guise of `stipulated and agreed damages', which is nothing more than a disguise for a forfeiture. Said sum of $14,375.00 the lessors are required to refund in the following fashion: the first amount of $9,125.00 to Carroll Bailey and the remainder thereof in the sum of $5,250.00 to Selma Schwartz.
"3. Immediately prior to the dissolution of the receivership herein, the receiver deposited into the Registry of this Court the total sum of $4,966.10. Of said amount $1,582.11 constituted the amount of money taken into possession by the receiver and transferred by him from the bank account of said Selma Schwartz theretofore on deposit with The Miami Beach First National Bank, Miami Beach, Florida. Said amount of $1,582.11 now on deposit in the Registry of the Court is money being the property of Selma Schwartz, upon which none of the parties herein, other than Selma Schwartz, has any right or claim thereto or interest therein and should, upon the disposition of this case, be returned to Selma Schwartz, subject to the further order of the Court. The remaining sum of $3,383.99 now in the Registry of the Court, deposited by the former receiver, represents the net operating profit of the receivership and should, upon the disposition of this cause, be returned to the lessors, subject to the further order of the Court."
The controlling question presented here for adjudication is whether the stipulations in the lease for the retention by the lessors of the security deposit paid to them pursuant to the terms, conditions and provisions of the lease, under all circumstances as reflected by the record, is for liquidated damages or is said security deposit so made a penalty or forfeiture? The answer to the question posed is our holding in the case of Stenor, Inc., v. Lester, 58 So.2d 673, written by Mr. Justice Hobson and adopted by this Court on December 11, 1951. See Smith v. Newell, 37 Fla. 147, 20 So. 249; Greenblat v. McCall, 67 Fla. 165, 64 So. 748, and similar cases; Pomeroy's Equity Jurisprudence (5th Ed.), Vol. 2, Chapter 2, pp. 203-326; 51 C.J.S., Landlord and Tenant, §§ 102 to 119, pp. 677 to 710; 32 Am. Jur. 447-452, pars. 540-547; Annotation of cases 106 A.L.R. 292-318.
The petition for interlocutory certiorari is hereby denied.
SEBRING, C.J., MATHEWS, J., and PARKS, Associate Justice, concur.