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AMERICAN NATIONAL BANK OF FLORIDA vs. OFFICE OF COMPTROLLER, 87-001240 (1987)
Division of Administrative Hearings, Florida Number: 87-001240 Latest Update: Sep. 08, 1988

The Issue Whether American National can litigate its entitlement to a documentary stamp tax refund pursuant to Section 120.57, Florida Statutes (1987)? If so, whether American National is entitled to a refund of some or all of the $5,475 it paid in recording the first modification and consolidation of notes, mortgages and assignment of leases and rents executed by American National and General Electric Credit Corporation (GECC) on July 11, 1986?

Findings Of Fact Real estate in Escambia County which petitioner American National now holds as trustee (the property) once belonged to U.S.I.F. Pensacola Corporation (USIFP). On September 1, 1969, USIFP gave Town and Country Plaza, Inc. (T & P) a note for $1,500,000 and executed a mortgage on the property in favor of T & P as security for payment of the note. A separate $300,000 note was promptly repaid. On July 5, 1973, U.S.I.F Wynnewood Corporation (USIFW), USIFP's successor in title, gave U.S.I.F. Oklahoma Corporation (USIFO) a note for $625,000, and executed a mortgage on the property in favor of USIFO as security for payment of its note. On July 8, 1982, shortly after Trust No. 0008 acquired the property, Jacksonville National Bank, as trustee, gave First National Bank of Chicago (FNBC) two notes, each secured by a separate mortgage. One note was for $767,481.98, and the other was for $2,000,000. These two notes, along with the two notes originally given to T & P and USIFO, which were both subsequently assigned to FNBC, were the subject of the July 8, 1982, consolidation, modification and extension agreement. Documentary stamp tax owing on account of these notes (the consolidated notes) was eventually paid in its entirety. All four mortgages with which the property was encumbered when petitioner American National succeeded Jacksonville National as trustee were duly recorded, intangible tax having been fully paid upon recordation. In January of 1984, FNBC assigned the consolidated notes and the mortgages securing their payment to VPCO Properties, Inc., which itself assigned them later the same month to VPPI TCH, Inc. In July of 1986, GECC, the present holder of the consolidated notes acquired the notes and became the mortagee on the mortgages securing their payment. As of July 11, 1982, when American National, as trustee of Trust No. 0008, borrowed an additional $1,150,000 from GECC, the outstanding principal balance on the consolidated notes aggregated $3,650,000. On that date, GECC and American National, as trustee, executed the so- called first modification and consolidation of notes, mortgages and assignment of leases and rents, Petitioner's Exhibit No. 1, which recited the parties' understandings both with respect to the new borrowing and with regard to the existing indebtedness the consolidated notes reflected. In addition to signing Petitioner's Exhibit No. 1, American National, as trustee, also executed and delivered to GECC a promissory note in the amount of $1,500,000. This note, which was not offered in evidence, has never been recorded, nor have documentary stamps ever been affixed to it. At GECC's insistence, American National paid a documentary stamp tax of $7,920 at the time Petitioner's Exhibit No. 1 was recorded in Pensacola. Of this sum, $5,475 was paid on account of the indebtedness the consolidated notes evidenced; $1,725 was paid on account of the new borrowing; and $720 was paid because of the provisions in Petitioner's Exhibit No. 1, contemplating an increase in the principal amount of indebtedness. Under the agreement certain interest payments can be deferred, not to exceed $480,000, any such deferments being added to principal. The agreement provides: Notwithstanding the foregoing, so long as Borrower is making all payments on this Note when due, without giving effect to grace periods or requirements of notice, if any, and is otherwise not in default, taking into account, applicable grace periods, if any, under the Mortgage and other Security Documents Borrower shall be entitled to defer payment, in any month, of interest in excess of interest computed at the "Applicable Base Percentage Rate" (hereinafter defined) so long as the total interest deferred under this paragraph ("Deferred Interest"), including any and all Deferred Interest which has been added to the principal balance hereof, as hereinafter provided, does not exceed the lesser of ten percent (10 percent) of the outstanding principal balance hereof, excluding any and all Deferred Interest which has been added to the principal balance hereof, or $480,000. Such Deferred Interest, including any and all Deferred Interest which has been added to the principal balance hereof, shall be due and payable when and to the extent that, in any subsequent month, the Contract Index Rate is less than the "Applicable Base Percentage Rate", with the balance of such Deferred Interest being payable as provided below or on the maturity hereof, whether by lapse of time, prepayment or acceleration. The "Applicable Base Percentage Rate" shall mean the following per annum rates of interest, computed as aforesaid, for the periods indicated: Applicable Base Period Percentage Rate Date of This Note June 30, 1987 10.0 percent July 1, 1987-June 30, 1988 10.5 percent July 1, 1988-June 30, 1989 11.0 percent July 1, 1989-June 30, 1990 11.5 percent July 1, 1990-Maturity Date (hereinafter defined) 12.0 percent Unless previously paid by Borrower, the outstanding balance of Deferred Interest not previously added to principal in accordance herewith, if any, shall be added to the principal balance hereof on the first day of each calendar quarter beginning with October 1, 1986, and shall accrue interest thereafter at the Contract Index Rate provided for principal, which interest shall be payable in the same manner as is applicable to interest on the original principal balance hereof. Notwithstanding the foregoing, Borrower may pay Deferred Interest at any time without penalty. Of the documentary stamp tax American National paid, $720 was on account of future advances that Petitioner's Exhibit No. 1 was designed to secure, in the event GECC made them.

Florida Laws (2) 120.5772.011
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FIRST NATIONAL BANK OF POMPANO BEACH vs. DEPARTMENT OF REVENUE, 77-000853 (1977)
Division of Administrative Hearings, Florida Number: 77-000853 Latest Update: Oct. 24, 1979

Findings Of Fact The parties in the person of their counsel have stipulated to the evidential facts which shall serve as the basis for the determination of the matters in dispute. The stipulation of facts and its attendant exhibits are attached to this Recommended Order and made a part thereof. As can be seen in the examination of the stipulated facts and supporting exhibits, the amount of $940.80 tax due and $940.80 for penalty is the total amount pertaining to certain notes, including notes in the names of Newth and Smith, copies of which notes appear as Exhibits C and D to the stipulated facts. A review of the total audit, Exhibit A in the stipulated facts, reveals that the amount in issue on the notes of Newth and Smith totals $885.75 alleged tax due and $885.75 alleged penalty due. The balance of the $940.80 documentary stamp tax and $940.80 in penalty pertaining to notes of other named individuals have been conceded by the Petitioner as due and owing and are not in controversy through this hearing process. The original notes on the accounts of Newth and Smith were issued in 1969. The Newth note was drawn on September 17, 1969, and the Smith note on April 14, 1969. At the time the notes were issued, national banks were immune from state and local taxes whose categories were not within the purview of Section 5219 of the Revised Statutes (12 USCA Sec. 548). Documentary stamp taxes were not one of the classes of taxes enumerated in Section 5219. Consequently, no documentary stamp taxes could be imposed against the notes drawn on accounts in the First National Hank of Pompano Beach because in 1969 it was a national bank, a status which it has continued to hold through the time of these proceedings. The prohibition against documentary stamp taxes being imposed by a state government on transactions between a national bank and its customers existed until December, 1969, at which point Public Law 91-156 was enacted, on December 12, 1969, and it amended Section 5219 of the Revised Statutes (12 USCA Sec. 548) and subsequent to that amendment, Title 12 USCA Sec. 3548 allowed state governments to tax national banks. In particular, the language of that latter provision provided: For the purpose of any tax law enacted under the authority of the United States or any State, a national bank shall be treated as a bank organized and existing under the laws of the State or other jurisdiction within which its principal office is located. This meant that transactions between the customers of a national bank and that bank with took place subsequent to the implementation of Title 12 USCA Sec. 3548 could be taxed pursuant to Chapter 201, Florida Statutes, by the process of a documentary stamp tax being levied. (The exhibits attached to the statement of facts show that Newth renewed his note with the Petitioner on April 20, 1971, and again on December 31, 1975. Smith renewed his note on June 12, 1973, and on December 31, 1975. Through the renewal process, documentary steep taxes were not paid on $683,000.00 involving the note of Newth and on $15,500.00 involving the note of Smith.) The Petitioner claims that it need not pay the documentary stamp tax and penalty on the Newth and Smith notes, because it is except from the payment of such tax. While the Petitioner agrees with the Respondent that Subsection 201.08(1), Florida Statutes, calls for the payment of documentary taxes on promissory notes and the renewal of those promissory notes, Petitioner believes that Section 201.09, Florida Statutes, exempts it from the necessity to pay documentary stamp taxes and related penalties in the matter of the renewal of the Newth and Smith notes which took place on December 31, 1975. The provision of Section 201.09, Florida Statutes, states: 201.09 Renewal of existing promissory note; exemption.--Then any promissory note is given in renewal of any existing promissory note, which said renewal note only extends or continues the identical contractual obligations of the original promissory note and evidences part or all of the original indebtedness evidenced thereby, not including any accumulated interest thereon and without enlargement in any way of said original contract and obligation, such renewal note shall not be subject to taxation under this chapter if such renewal note has attached to it the original promissory note with canceled stamps of fixed thereon showing full payment of the tax due thereon. Petitioner reads this provision to mean that the prohibition against the State of Florida levying taxes on the transactions that took place on the Newth and Smith notes in 1969, under the protection afforded by Section 5219 of the Revised Statutes (12 USCA Sec. 548); was tantamount to a declaration that full payment of the tax due thereon had been rendered and when the State attempted to impose the documentary stamp tax on the renewals which took place on December 31, 1975, Section 201.09, Florida Statutes, exempted the Petitioner from the payment of that tax. Under this theory, it was only necessary to attach the original promissory note issued in the Newth and Smith matters in 1969 to the renewal notes of December 31, 1975, and even though canceled stamps were not affixed to the 1969 notes, this could be analogous to attaching promissory notes with canceled stamps to renewal note documents. The analogy is supported in the mind of the Petitioner because both in the instance of the latter promissory notes with documentary stamp taxes attached and in the cases of Newth and Smith where original promissory notes were attached without canceled stamps attached; the key point was that under the hypothetical situation of documentary stamp taxes affixed to the original notes or the actual situation in the Newth and Smith cases, both had the real effect or effect in law of providing full payment of taxes due thereon. The perception of the Petitioner does not comport with the basis for the exemption created by Section 201.09, Florida Statutes. That exemption only applies when tax has actually been paid on the original promissory note, which did not occur here, and that failure to pay tax on the original promissory notes precludes any claim for exemption when the notes were renewed. There exists one further possibility open to the Petitioner in its efforts to resist the payment of the documentary stamp tax rate penalty on the notes of Newth and Smith. That possibility resides in the idea that the prohibition against taxing the notes when they were drafted in 1969, such prohibition appearing in the guise of Section 5219 of the Revised Statutes (12 USCA Sec. 548); it would continue to exist for the life of the note making all renewals exempt from taxation. That interpretation does not pass muster when viewed in the light of Title 12 USCA Sec. 3548, which removed future transactions from their exempt status and made them subject to tax by the Respondent. This change in position allowed Subsection 201.08(1), Florida Statutes, to be imposed on the renewals to the promissory notes, which occurred on December 31, 1975. In summary, Petitioner having failed to demonstrate its entitlement to the exemption set out in Section 201.09, Florida Statutes, it is liable in the lull amount claimed for the payment of documentary stamp taxes and penalties in a like amount in accordance with the provisions of Chapter 201, Florida Statutes, on all transactions addressed in the audit, which is Exhibit A to the statement of facts.

Recommendation It is recommended that the Petitioner, First National Bank of Pompano Beach, be required to pay documentary stamp taxes in the amount of $940.80 and penalties in the amount of $940.80 related to the transactions on these promissory notes set out in the stipulation of facts offered by the parties. DONE AND ORDERED this 15th day of June, 1979, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 1979. COPIES FURNISHED: Bruce Culpepper, Esquire 716 Barnett Bank Building Tallahassee, Florida 32301 Barbara Staros Harmon, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32301 John D. Moriarty, Esquire Department of Revenue Room 104, Carlton Building Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER =================================================================

Florida Laws (2) 201.08201.09
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EDWARD K. HALSEY, ET AL. vs. DEPARTMENT OF REVENUE, 76-000939 (1976)
Division of Administrative Hearings, Florida Number: 76-000939 Latest Update: Jan. 13, 1977

Findings Of Fact The stipulated facts are as follow: The Petitioners are purchasers of subleasehold interests in Ocean Club III, a condominium in Indian River County, Florida. All of the Petitioners purchased their subleasehold interests from Dye and Reeves Development Company in 1973, except the Petitioner Helen Bane, who purchased her subleasehold interest from the Petitioner Richard Long in 1974. The duration of the subleases was approximately 98 years, and they were paid for with present consideration consisting of cash and mortgages. The document included as Exhibit "A", entitled Unit Sublease, represents the conveyance by which each of the Petitioners acquired his or her subleasehold. No documentary stamp taxes or surtaxes were paid on these conveyances. Prior to closing with the Petitioners, the attorney for the Dye and Reeves Development Company requested William Stanley, Chief of the Documentary Stamp Tax Bureau, Department of Revenue, to give an opinion on whether the Unit Sublease, Exhibit "A", requires documentary stamp taxes and surtaxes. Stanley, in a letter dated July 3, 1973, stated his opinion to be that no documentary stamp taxes and surtaxes were due. A copy of this letter is attached as Exhibit "B." On November 13, 1974, the Attorney General released an official opinion, AGO 074-350, which reversed the position earlier taken by Stanley regarding taxability of conveyances of subleasehold interests. The Department of Revenue has adopted this ruling as its own. Based upon the letter from Stanley, the Dye and Reeves Development Company assured the Petitioners that no documentary stamp taxes or surtaxes would be required on the Unit Sublease. The Petitioners had knowledge of the letter or its contents at the time they closed the transaction, but at the time of closing nevertheless requested an Indemnification Agreement, Exhibit "C" herein, in which Dye and Reeves agreed to bear the cost of documentary stamp taxes due upon the Sublease. Exhibits "A," "B," and "C" represent all the relevant documents in this litigation. The Department of Revenue has issued Proposed Notices of Assessment against the Petitioners based upon an alleged documentary stamp tax and surtax liability under the Unit Sublease. The Department of Revenue has not assessed any penalties against the Petitioners. The Petitioners are unable to recover the sums alleged to be due as to taxes and surtaxes from the Dye and Reeves Development Company because the Company has no assets. Petitioners are also barred by limitations from recovering the money from the estate of Mr. Dye, who is deceased. The Petitioners and the Department of Revenue's Tax Examiner have held an informal conference, in which the two parties were unable to resolve their differences concerning the aforementioned assessment. If the Petitioners are found to be liable for documentary stamp taxes and surtaxes, the following amounts represent the proper computation of their liability: NAME TAX SURTAX TOTAL EDWARD K. HALSEY 106.50 10.45 116.95 HELEN C. BANE 117.60 43.45 161.05 W.B. WHITAKER, et ux. 165.00 16.50 181.50 JAMES N. SKINNER 115.50 11.55 127.05 MARY GLENNAN 98.40 36.30 134.70 JOHN F. McFEATTERS, et ux. 127.50 46.75 174.25 ALLEN TOUZALIN 121.50 14.85 136.35 RICHARD LONG, et ux. 117.60 11.00 128.60 HOWARD BAIN, et ux. 103.50 7.70 111.20 JOHN MYLES DEWAR, et ux. 126.00 46.20 172.20 JOHN S. STEPHENS, et ux. 99.00 7.70 106.70 PHYLLIS T. HERMAN 103.50 10.45 113.95 CHARLES W. CHRISS, et ux. 96.00 7.15 103.15 KATHRYN LOCKWOOD, et ux. 97.50 35.75 133.25 KATHRYN LOCOD, et ux. 163.50 59.95 233.45 KATHRYN LOCKWOOD, et ux. 100.50 36.85 137.35 The sums stated above do not include any interest which may have accrued on the alleged liability. Pursuant to stipulation of the parties, the testimony of Howard W. Bain, a Petitioner, was offered on behalf of all of the Petitioners in this case. He testified that he purchased a unit at Ocean Club III from Dye and Reeves Development Company in early June, 1973. Prior to the closing of that purchase, he was advised by his attorney that the latter expected to be provided by the developer's attorney a letter from the Department of Revenue that would state documentary stamps were not payable on the purchase of the condominium unit. Bain would not have closed the purchase if he had had to pay documentary stamp taxes on the transaction. It was his understanding that if any taxes did become due and payable they would be paid by the developer incident to the indemnification agreement. He was unaware at the time that Dye and Reeves Development Company might go out of business in the future. (Testimony of Bain).

Recommendation That Petitioners L.L. Lockwood and Kathryn H. Lockwood, his wife; Howard H. Bain and Mary C. Bain, his wife; Richard H. Long and J. Ann Long, his wife; Edward K. Halsey; Mary Glennan; W.B. Whitaker; Allen Touzalin; and John F. McFeatters and Emily J. McFeatters, his wife, be relieved from any liability from documentary stamp tax or surtax under Chapter 201, F.S. That Petitioners Helen C. Bane, James M. Skinner, John Myles Dewar, et ux., John S. Stephens, et ux., Phillis T. Herman, and Charles W. Chriss, et ux., be held liable for the payment of documentary stamp tax, surtax, and interest thereon, pursuant to Chapter 201, Florida Statutes, in the amounts set forth in the foregoing Findings of Fact. DONE and ORDERED this 9th day of December, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of December, 1976.

Florida Laws (2) 201.01201.02
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DIVISION OF REAL ESTATE vs. GEORGE F. REILLY, 79-000548 (1979)
Division of Administrative Hearings, Florida Number: 79-000548 Latest Update: Oct. 19, 1979

Findings Of Fact Respondent married Barbara Hannon on October 31, 1970. On November 5, 1975, Barbara G. Reilly, as she was sometimes known during her marriage to respondent, executed a petition for dissolution of marriage and other relief in which she alleged that she "wishe[d] to resume her former surname of HANNON." On January 14, 1976, the marriage between respondent and Barbara Hannon was dissolved. Petitioner's exhibit No. 4. Effective October 1, 1973 through October 4, 1975, inclusive, respondent was registered as a real estate salesman in the employ of King's Point Realty, Inc. From October 5, 1975, to March 31, 1977, respondent was registered as a real estate broker at the same office. By deed dated May 1, 1975, Harry and Evelyn Litwin conveyed "CONDOMINIUM PARCEL NO. 508, KINGS POINT BRITTANY K" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 14. This deed reflects payment of documentary stamp tax in the amount of $49.50 and of documentary surtax in the amount of $1.65. By deed dated June 20, 1975, "BARBARA HANNON, a single woman" conveyed the same parcel to Robert and Meredith Nisenbaum. This deed reflects payment of documentary stamp tax in the amount of $52.50 and of documentary surtax in the amount of $19.25. Petitioner's exhibit No. 14. By deed dated September 29, 1975, Dorothy I. Fox, an un-remarried widow, conveyed "CONDOMINIUM PARCEL NO. 702, KINGS POINT SAXONY `O'" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 15. This deed reflects payment of documentary stamp tax in the amount of $34.50 and of documentary surtax in the amount of $2.20. By deed dated November 6, 1975, "BARBARA HANNON, a single woman," conveyed the same parcel to B & M Realty Trust II. This deed reflects payment of documentary stamp tax in the amount of $45.00 and of documentary surtax in the amount of $6.05. Petitioner's exhibit No. 15. By deed dated October 31, 1975, Myron and Sonia Spergel conveyed "Condominium Parcel No. 237 of FLANDERS `E'" to "BARBARA HANNON." Petitioner's exhibit No. 16. This deed reflects payment of documentary stamp tax in the amount of $45.60 and of documentary surtax in the amount of $17.05. By deed dated March 12, 1976, "BARBARA HANNON" conveyed the same parcel to Harry and Evelyn Tuckman. Petitioner's exhibit No. 8. This deed reflects payment of documentary stamp tax in the amount of $57.00 and of documentary surtax in the amount of $4.40. Mr. and Mrs. Tuckman, who still lived in the condominium at the time of the hearing, dealt with respondent when they acquired the property. In conversations with respondent, a price was agreed upon. The Tuckmans did not know who the seller was at the time they agreed to buy. By deed dated June 10, 1976, Ida Ellman, a widow, conveyed "Condominium Parcel No. 202 of Valencia `I' CONDOMINIUM" to "BARBARA HANNON, a single woman." Petitioner's exhibit No. 17. This deed reflects payment of documentary stamp tax in the amount of $57.00 and of documentary surtax in the amount of $8.25. On this deed, the grantee's post office address is stated as "P.O. Box 994, Delray Beach, Fl. 33444." According to post office records, respondent George F. Reilly rented Post Office Box 994 at the Delray Beach Post Office from on or about November 4, 1975, until on or about June 21, 1977. By deed dated August 4, 1976, "BARBARA HANNON, a single woman" conveyed the same property to Natale and June V. Lisi. Petitioner's exhibit No. 9. This deed reflects payment of documentary stamp tax in the amount of $69.00 and of documentary surtax in the amount of $25.30. Respondent represented the seller when Mr. and Mrs. Lisi purchased the condominium. Respondent never disclosed to Mr. and Mrs. Lisi that he and Barbara Hannon had been married. By deed dated September 30, 1976, Sidney and Jean Kessler and Charles and Sandra Bondar conveyed "Parcel No. 159 of TUSCANY `C' Condominium" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 5. The grantee's address appears on this deed as "P.O. Box 994, Delray Beach, Florida 33444." This deed reflects payment of documentary stamp tax in the amount of $67.50 and of documentary surtax in the amount of $7.70. Respondent asked John W. Hooker, Jr., to handle the transaction from the Kesslers and Bondars to Barbara Hannon. Mr. Hooker received a cashier's check drawn on the Barnett Bank of West Delray Beach in the amount of $6,305.37, petitioner's exhibit No. 6, and closed the transaction by mail. He never met Barbara Hannon and only learned afterwards that she and respondent had been married. Respondent never disclosed to the Kesslers or to the Bondars that he had been married to Barbara Hannon; and he later admitted this to Floyd M. Stevens, an investigator in petitioner's employ. The money used to purchase the cashier's check given to Mr. Hooker, petitioner's exhibit No. 6, came from respondent's savings account at the Barnett Bank of West Delray Beach. Petitioner's exhibit No. 19. By deed dated December 16, 1976, "BARBARA HANNON, A SINGLE WOMAN" conveyed "Parcel No. 169, of TUSCANY `C' CONDOMINIUM" to John L. Schmieder and James A. Schmieder. Petitioner's exhibit No. 10. In anticipation of the conveyance, John Schnieder had placed a deposit with respondent in the form of a money order in the amount of $1,000, payable to "GEORGE REILLY-KING'S POINT REALTY." Petitioner's exhibit No. 21. The seller's closing statement prepared on December 15, 1976, contains the item: "Brokerage Commission Kings Point Realty . . . [$]1,000.00." Petitioner's exhibit No. 11. According to the same closing statement, the balance due seller amounted to $9,200.64. Id. On December 16, 1976, respondent deposited $10,200.64 (1,000.00 + 9,200.64) to his savings account at the Barnett Bank of best Delray Beach. Petitioner's exhibits Nos. 20, 21 and 22. According to the Bank's records, respondent's mailing address was "P.O. Box 994, Delray Beach, Fla. 33444." Respondent never mentioned to the Schmieders that he and Barbara Hannon were in any way related. Respondent deposited the money order he had received from the Schmieders to his own savings account on December 16, 1976; and never earlier deposited the money order to any escrow account. On October 14, 1976, The Keyes Company mailed a check drawn in favor of Kings Point Realty, Inc. (Kings Point) in the amount of $500, to the offices of Kings Point in Delray Beach. This check never reached Kings Point's supervisor of accounts payable and was not processed through Kings Point's ordinary banking channels, although it was paid.

Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner revoke respondent's registration as a real estate broker. DONE and ENTERED this 19th day of July, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1979 COPIES FURNISHED: Kenneth M. Meer, Esquire Post Office Box 1900 Orlando, Florida 32802 George F. Reilly 8671 Sunset Strip Sunrise, Florida 33322 George F. Reilly Post Office Box 4525 Old San Juan Station Puerto Rico 00905

Florida Laws (1) 475.25
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TIMBER RIVER, INC. vs. DEPARTMENT OF REVENUE, 83-000910 (1983)
Division of Administrative Hearings, Florida Number: 83-000910 Latest Update: Apr. 19, 1985

Findings Of Fact On or about August 15, 1979, Mead Timber Company and Scott Timber Company conveyed certain property located in Suwannee County, Florida (hereinafter referred to as the "Property"), to Tommy M. Faircloth, Sam L. Rudd, and Alvin C. Futch (hereinafter referred to as the "Original Conveyance"). The warranty deed for the Original Conveyance was recorded on August 15, 1979, at Official Records Book 187, page 444, of the Public Records of Suwannee County, Florida. In connection with said Original Conveyance the closing statement therefor showed a purchase price of Two Million Four Hundred Thousand Dollars ($2,400,000.00), said amount being the actual amount of the purchase and sale. In connection with the deed for said Original Conveyance, the closing statement indicated that Seven Thousand Two Hundred Dollars ($7,200.00) of documentary stamp taxes were paid based upon Thirty Cents ($.30) per One Hundred Dollars ($100.00) of consideration, and said Seven Thousand Two Hundred Dollars ($7,200.00) for documentary stamps was in fact paid. In connection with said Original Conveyance, a first mortgage and security agreement was given by Tommy M. Faircloth, Sam L. Rudd, and Alvin C. Futch, to the Mutual Life Insurance Company of New York, said mortgage dated and filed August 15, 1979, at Official Records Book 187, page 451, of the Public Records of Suwannee County, Florida (hereinafter referred to as "First Mortgage"). The mortgage secured a note with a face amount of Three Million Dollars ($3,000,000.00) dated August 15, 1979. The First Mortgage showed a face amount of Three Million Dollars ($3,000,000.00). In connection with the First Mortgage, pursuant to the loan commitment dated April 13, 1979, only One Million Eight Hundred Thousand Dollars ($1,800,000.00) was disbursed thereunder. The parties thereto anticipated that an additional One Million Two Hundred Thousand Dollars ($1,200,000.00) would be disbursed at some future date, subject to conditions precedent that (a) the Borrowers place all of the Property encumbered thereby into cultivation, after having first cleared and prepared same for cultivation, and (b) that the Borrowers install twenty (20) 12-inch irrigation wells which would be appropriately drilled and equipped, and (c) that the Borrowers install twenty (20) automatic center-pivot irrigation systems thereon. The aforementioned conditions precedent have not been accomplished to date. The time period during which the conditions precedent set forth in paragraph seven (7) above could be completed, and during which time period the Borrowers could require the First Mortgage lender to make the additional disbursement under the First Mortgage, has expired, and the Borrowers have no further legal right to require any additional disbursements under the First Mortgage. The Petitioner has waived any right to seek or obtain the additional One Million Two Hundred Thousand Dollars ($1,200,000.00) from the holder of the First Mortgage. In connection with the First Mortgage for the Original Conveyance, the Borrowers paid Four Thousand Five Hundred Dollars ($4,500.00) as documentary stamp taxes on the promissory note secured by the First Mortgage, and paid Six Thousand ($6,000.00) in intangible taxes. In connection with the Original Conveyance, a second mortgage was given by Tommy M. Faircloth, Sam L. Rudd and Alvin C. Futch to Mead Timber Company and Scott Timber Company in the original principal sum of Three Hundred Thousand Dollars ($300,000.00), said mortgage dated and filed August 15, 1979, at Official Records Book 187, page 461, of the Public Records of Suwannee County, Florida (hereinafter referred to as the "Second Mortgage"). On or about October 1, 1980, Tommy M. Faircloth, Sam L. Rudd, and Alvin C. Futch conveyed a portion of the Property to Timber River, Inc., a Florida corporation, by warranty deed which instrument was filed October 2, 1980, at Official Records Book 203, page 790, of the Public Records of Suwannee County, Florida (hereinafter referred to as the "Second Conveyance"). In connection with the deed for said Second Conveyance, only minimum documentary stamps in the amount of Forty Cents ($.40) were attached and affixed thereto. The Respondent herein has alleged that, since the Second Conveyance was subject to both the First Mortgage and the Second Mortgage, the taxable consideration should be Three Million Three Hundred Thousand Dollars ($3,300,000.00)(the face amount of the two [2] mortgages combined), and therefore the documentary stamps which should have been affixed to the deed would be Thirteen Thousand Two Hundred Dollars ($13,200.00), leaving an additional tax due in the amount of Thirteen Thousand One Hundred Ninety-nine and Sixty One-hundredths Dollars ($13,199.60). Timber River, Inc., the grantee of the Second Conveyance, is a corporation which was wholly owned by Tommy M. Faircloth, Sam L. Rudd, and Alvin C. Futch in equal proportions at the time of the Second Conveyance. Timber River, Inc., in consideration of Tommy M. Faircloth, Sam L. Rudd, and Alvin C. Futch conveying to said corporation the property described in the deed of the Second Conveyance, issued its common stock to said individuals in equal proportions. Timber River, Inc., took the Property subject to the First Mortgage and second Mortgage, and did not assume or agree to assume either the First Mortgage or the second Mortgage. Tommy M. Faircloth, Sam L. Rudd, and Alvin C. Futch, individually, have at all times been or are presently liable to the mortgagee, Mutual Life Insurance Company of New York, and are personally responsible for making all payments under said mortgage. All payments under said mortgage both prior to and subsequent to the Second Conveyance have been made by Tommy M. Faircloth, Sam L. Rudd, and Alvin C. Futch, individually.

Florida Laws (2) 201.01201.02
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AMI INVESTMENTS, INC. vs. DEPARTMENT OF REVENUE, 77-001842 (1977)
Division of Administrative Hearings, Florida Number: 77-001842 Latest Update: May 22, 1978

Findings Of Fact By warranty deed dated July 29, 1974 Marco Cove, Inc. conveyed certain property to the Barnett Bank of Naples, Florida as Trustee. At the time of these conveyances the properties were subject to a first mortgage dated September 14, 1971 in an original principal amount of $1,400,000 to AMI Investments, Inc. mortgagee and a second mortgage dated August 24, 1973 in the amount of $130,278 to Joseph R. Lynch, Inc. By quitclaim deed dated November 5, 1974 (Exhibit 8) Donald P. Landis conveyed his interest in Apartment Number C-3 in the condominium here involved to the Barnett Bank of Naples, Trustee. It appears that at the time of the conveyances here involved Marco Cove, Inc. was delinquent on both mortgages, owed materialmen's liens on the property, had sold some of the units to innocent purchasers without giving clear title, and had not placed in escrow the sums so received from these purchasers. Barnett Bank accepted title as trustee, so the various rights of the parties could be resolved without foreclosure proceedings. Although Petitioner contested that Barnett Bank was Trustee for AMI Investments, Inc., Exhibit 10, which was admitted into evidence without objection, clearly shows the bank understood they were trustees for AMI Investments, Inc. and accepted the deeds here involved. At the time of the conveyances the balance owned on the first mortgage was $63,356.16 and on the second mortgage $130,278. Respondent's third Notice of Proposed Assessment (Exhibit 3) assesses documentary stamp taxes and penalties in the amount of $59.25 on each of the three condominium units conveyed to the Trustee and documentary stamp tax and penalty in the amount of $547.88 on the conveyance of the entire condominium for a total tax and penalty of $725.63. No surtax is claimed. The conveyances to the Trustee did not extinguish the mortgages and the Trustee took title to the properties subject to these mortgages. Petitioner has subsequently sold its rights as first mortgagee to a third party for some $66,000.

Florida Laws (1) 201.02
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KURO, INC. vs DEPARTMENT OF REVENUE, 96-000937 (1996)
Division of Administrative Hearings, Florida Filed:Sarasota, Florida Feb. 22, 1996 Number: 96-000937 Latest Update: Oct. 23, 1997

The Issue The issue for consideration in this case is whether deeds by property owners which convey unencumbered real property to a corporation solely owned by them, are subject to a documentary stamp tax imposable under Section 201.021(1), Florida Statutes, and Rule 12B-4.013(7), Florida Administrative Code.

Findings Of Fact By Warranty Deed dated April 30, 1991, W. Dewey Kennell sold eight condominium apartments, units 1731, 1733, 1735, 1737, 1741, 1743, 1745 and 1747, in Baywood Colony Southwood Apartments IV, a condominium, to Kurt Rabau and Ronald Rabau, his son, residents of Germany. The Rabaus purchased the properties as an investment in rental property for income. At the time of the sale, the property was subject to mortgages totaling $250,000, which the Rabaus paid off on May 24, 1994. Sometime after the purchase, the Rabaus were advised to incorporate and hold title to the properties in a corporate capacity to protect themselves against personal liability. Thereafter, on September 14, 1994, the Rabaus formed Kuro, Inc., the Petitioner herein, to take and hold title to the properties, with Kurt Rabau and Ronald Rabau each owning 50% of the corporate stock. There were no other owners of stock in the corporation. On October 12, 1994, the Rabaus transferred all eight properties to Kuro, Inc. Kuro, Inc. had no assets other than the eight apartments, and did no business prior to the transfer of those apartments to it. Consequently, the stock of Kuro, Inc. was valueless prior to the receipt of the transferred apartments. The corporation’s federal tax form relating to transfer of property to a corporation, the “Corporation’s Statement on Transfer of Property Under Code Section 351” reflects that the Rabaus “transferred the jointly owned property [described therein] for which Kuro Inc. issued the stock”. From the evidence presented it is clear that the Kuro Inc. stock was issued in exchange for the contribution of the apartments to the corporation. Other documents in the corporation’s 1994 tax return indicate that the property was valued at fair market value at the time of transfer to the corporation, and the transferee’s, (corporation’s) adjusted basis was identical after the transfer. Each of the Rabaus received 500 shares of the corporation’s stock which was valued at $618,642. Of that amount, $617,642 was considered additional paid-in capital. There was no additional property received or possessed by the corporation. A minimal documentary stamp tax was paid by the parties at the time the eight Warranty Deeds for the apartments were transferred to the corporation. The consideration reflected on the face of each deed was “...the sum of $10.00 and other valuable consideration.” Subsequent to the transfer, the Department conducted an audit of the Clerk of Circuit Court in Sarasota County and, on November 10, 1994, issued a Notice of Intent to Make Documentary Stamp Tax and Discretionary Surtax Audit Changes, by which it indicated its intent to impose a documentary tax of $4,207.00 on the transfers, a 50% penalty of $2,103.50, and interest totaling $38.73 through November 10, 1994, with additional interest to accrue at the rate of 1% per month, prorated daily ($1.38), until date of payment. Thereafter, on March 27, 1995, the Department issued a Notice of Proposed Assessment to Kuro, Inc., and Petitioner timely filed a protest. Subsequent to that action, on January 11, 1996, the Department issued its Notice of Decision sustaining the proposed assessment, penalty and accrued interest, and Petitioner requested formal hearing.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a final order imposing a tax in the amount of $4,207.00 with interest from date of filing at 1 percent per month based on the amount of tax not paid to date of payment. DONE and ENTERED this 22nd day of April, 1997, in Tallahassee, Florida. ARNOLD H. POLLOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 1997. COPIES FURNISHED: C. Samuel Whitehead, Esquire 2199 Ringling Boulevard Sarasota, Florida 34237 James F. McAuley, Esquire Office of the Attorney General The capitol - Tax Section Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue Tallahassee, Florida 32399-1011

Florida Laws (5) 120.57120.80201.02201.1772.011 Florida Administrative Code (2) 12B-4.01212B-4.013
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KBC DEVELOPMENT CORPORATION vs. OFFICE OF THE COMPTROLLER AND DEPARTMENT OF REVENUE, 76-001596 (1976)
Division of Administrative Hearings, Florida Number: 76-001596 Latest Update: Jun. 15, 1979

The Issue The sole issue posed herein is: Whether or not the transfer to Petitioner by individuals Hugh P. Conser, Stewart L. Krug and Sidney Barbane1 of certain real property located in Pinellas County, Florida, on or about October 26, 1974, constitutes a conveyance subject to the Documentary Stamp Tax Act, pursuant to Chapter 201, Florida Statutes.

Findings Of Fact On or about October 26, 1974, the Petitioner received title to certain real property located Pinellas County, Florida, from Stewart L. Krug, Sidney Barbanel and Hugh P. Conser, the principals in KBC Development Corporation, which was recorded in Official Records Book 4229, page 1052, Public Records of Pinellas County, Florida. The only consideration, as evidenced by the deeds filed in the case, is that the conveyance was for "good and valuable consideration and ten dollars". This other good and valuable consideration, according to Petitioner and the other record evidence, consisted of the issuance of all one hundred shares of the authorized stock of KBC Development Corporation, Petitioner, as evidenced by the Minutes of the Shareholders Meeting of such corporation which was held on July 18, 1973. (See the minutes reflected in an attachment to Petitioner's Exhibit Number 1.) The issued stock had a par value of $5.00. The corporate entity, KBC, as Petitioner, was formed for the purpose of taking title to the property in question and, as evidenced by the record, had no other assets when the subject property was conveyed. On May 6, 1975, the Florida `Department of Revenue, Respondent, recorded in the office of the Circuit Court of Pinellas County, Florida, a warrant for collection of delinquent documentary stamp taxes in connection with the above-referenced transaction in the amount of $27,599.70, plus an identical amount of penalty, for a total sum of $55,212.40. Said warrant is recorded in O.R. Book 4286, page 31, Public Records of Pinellas County, Florida. Following a conference with the Department of Revenue, the taxes were paid by the Petitioner under protest. That payment set the stage for the Petitioner's filing of the claim for refund with the Respondent, the Comptroller of the State of Florida, pursuant to Florida Statutes section 215.26. The Petitioner argues that the only taxable consideration resulting from the subject conveyance was the par value of the stock, of which amount sufficient documentary stamps were affixed to the deeds in question. In support of this position, the Petitioner cites the fact that there are no income tax returns filed by the corporation, FIG; no business activities pursued by the corporation; no bank account of the corporation; and no assets held by the corporation, except as agents for the three individuals, Krug, Barbanel and Conser, all of which were acknowledged by all of the mortgagees. Additionally, the Petitioner urges that the bank and lending institutions involved regarded and held each individual personally liable for the indebtedness in connection with the loans advanced for the property in question. Finally, the Petitioner urges that, based on the conveyance in question, there was no shift in the economic burden to the corporation and, therefore, no taxable transaction occurred when the property in question was conveyed from the individuals, Krug, Barbanel and Conser, to FIG Development Corporation.

Conclusions The documentary stamp tax provided by Florida Statutes section 201.02 is an excise tax imposed on particularly described transactions, and in the case of instruments relating to realty, is based upon the total consideration involved in the transfer or conveyance. Thus, the key point in determining whether documentary stamps are to be affixed to an instrument transferring an interest in realty is in the presence or absence of consideration for the transfer. Rule 12A-4 .14, Florida Administrative Code, describes conveyances not subject to the documentary stamp tax as those "conveyances of realty without consideration, including. . .a deed to or by a trustee not pursuant to a sale . . . ." The facts of this case clearly do not illustrate an express or resulting trust relationship between KBC Development Corporation and its principals, Stewart L. Krug, Sidney Barbanel and Hugh P. Conser. When KBC took title to the property from Krug, Conser and Barbanel, the consideration was $10.00 and other valuable consideration and, based on the face of the instrument, the conveyance was not made to KBC subject to payment of any mortgages, etc., by KPC (Petitioner's Exhibit No. 1). Section 201.02(1), Florida Statutes (1975). See Florida Department of Revenue v. De Maria, 338 So.2d 838 (Fla. 1976). Additionally, the facts herein reveal that the banks and lending institutions involved in the transaction required the personal guarantees of the individuals, Krug, Barbanel and Conser. No evidence was introduced indicating that Petitioner, KBC Development Corporation, was anything more than an entity whereby the lending institutions had advanced funds for the primary mortgages to Continental Investment and Development Company, which was in no way related to the present corporation, KBC, and that the corporate entity was used to protect the lending institutions from any possible violations of usurious transactions. As stated, the personal endorsements and/or guarantees of the individuals, Barbanel, Krug and Conser, were required by the lending institutions before the primary mortgagee, Continental Investment and Development Company, would be released. Krug, Barbanel and Conser were no more nor less obligated to pay and perform under the obligation, after the conveyance than before. Although there was a change in the form of the obligation, there was no change in the substance. See e.g., Straughn v. Story, 334 So.2d 337 (Fla. 1st DCA 1976) cert. discharged 348 So.2d 954 (1977). (See Petitioner's Exhibits 2, 3 and 4.) For all of these reasons, it is the considered opinion of the undersigned that the Respondents have failed to demonstrate that the consideration for the conveyances in question were anything more than the par value of the stock and, accordingly, documentary stamp taxes should only be assessed in the amount of $4.10. Accordingly, I shall recommend that the excess assessments which Petitioner paid under protest be refunded.

Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby, RECOMMENDED: That the Petitioner be refunded the amount of taxes and penalties it paid to the Respondent, Department of Revenue, under protest, over and above the amount it should have paid on the par value of the stock of KBC Corporation when the abovedescribed conveyance was made during October, 1974. RECOMMENDED this 3rd day of April, 1979, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 101, Collins Building MAILING ADDRESS: 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Donald R. Hall, Esquire Goza, Hall & Peacock, P.A. 100 North Belcher Road Clearwater, Florida 33518 Cecil L. Davis, Jr., Esquire Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32304 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA, DEPARTMENT OF REVENUE TALLAHASSEE, FLORIDA KBC DEVELOPMENT CORPORATION, Petitioner, vs. CASE NO. 76-1596 GERALD LEWIS, as COMPTROLLER OF THE STATE OF FLORIDA, AND DEPARTMENT OF REVENUE, Respondents. / NOTICE TO: DONALD R. HALL, ESQUIRE ATTORNEY FOR PETITIONER GOZA, HALL & PEACOCK, P.A. 100 NORTH BELCHER ROAD CLEARWATER, FLORIDA 33518 CECIL L. DAVIS, JR., ESQUIRE ATTORNEY FOR RESPONDENTS ASSISTANT ATTORNEY GENERAL THE CAPITOL LL04 TALLAHASSEE, FLORIDA 32304 You will please take notice that the Governor and Cabinet, acting as head of the Department of Revenue at its meeting on the 12th day of June, 1979, approved the Respondent's Substituted Order, in lieu of the Division of Administrative Hearing's Recommended Order dated April 3, 1979. A copy of the Respondent's Proposed Substituted Order is attached. This constitutes final agency action by the Department of Revenue. JOHN D. MORIARTY, ATTORNEY DIVISION OF ADMINISTRATION DEPARTMENT OF REVENUE STATE OF FLORIDA ROOM 104, CARLTON BUILDING TALLAHASSEE, FLORIDA 32301 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Notice was furnished by mail to Donald R. Hall, Esquire, Goza, Hall & Peacock, P.A. 100 North Belcher Road, Clearwater, Florida 33518, Attorney for Petitioner; by hand delivery to Cecil L. Davis, Jr., Esquire, Assistant Attorney General, The Capitol LL04, Tallahassee, Florida 32304, Attorney for Respondents and James E. Bradwell, Esquire, Hearing Officer, Division of Administrative Hearings, Department of Administration, Room 530, Carrolton Building, Tallahassee, Florida 32304, this 14th day of June, 1979. JOHN D. MORIARTY, ATTORNEY Attachment STATE OF FLORIDA

Florida Laws (3) 120.57201.02215.26
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A. J. COYLE vs. DEPARTMENT OF REVENUE, 77-000426 (1977)
Division of Administrative Hearings, Florida Number: 77-000426 Latest Update: Jul. 11, 1977

Findings Of Fact The facts in this case are undisputed. On April l6, 1976, petitioner Arthur J. Coyle and his wife Katie Coyle, became the sole shareholders of Sara- Wolf, Inc., a Florida Corporation, whose assets consisted of an apartment building in Miami Beach, Florida. Thereafter, the Coyles decided to transfer the corporate assets to themselves as individuals. They were advised by their attorney that, in view of the 1975 decision of the First District Court of Appeal in Florida Department of Revenue v. DeMaria, 321 So 2d 101 (Fla. 1st DCA 1975) in a similar factual situation, no state documentary stamp tax would be due on the transaction. Therefore, relying upon that judicial decision, petitioner and his wife proceeded to execute a quit claim deed of the corporate real estate to themselves on May 13, 1976, and file the same in the public records of Dade County, Florida, on May 18, 1976, with payment of only nominal documentary stamp tax. The decision of the District Court of Appeal had been stayed by the Supreme Court on December 8, 1975. Subsequent to the decision of the Supreme Court in the DeMaria case on October 14, 1976, which quashed the lower court's decision, respondent issued a notice of proposed assessment of documentary stamp tax in the amount of $526.50 based on a taxable consideration of $175,500, less 30 cents tax paid, for a total tax due of $526.20 plus a like amount as a penalty, and $42.00 in interest, for a total asserted liability of $1,094.40. (Testimony of petitioner, Exhibits 1-3)

Recommendation That the proposed assessment of $1,094.40 against petitioner Arthur J. Coyle and Katie Coyle is valid and should be enforced. DONE and ENTERED this 31st day of May, 1977 in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Robert A. Glassman, Esquire 903 Biscayne Building 19 West Flagler Street Miami, Florida 33130 Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304

Florida Laws (2) 201.02201.17
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SAM GREENE AND MRS. SAM GREENE vs. OFFICE OF THE COMPTROLLER AND DEPARTMENT OF REVENUE, 77-002305 (1977)
Division of Administrative Hearings, Florida Number: 77-002305 Latest Update: Jul. 21, 1978

Findings Of Fact Petitioners were desirous of having a custom built home on a lot of their choice. During the course of this endeavor they met Jack Brolsma, President of Jack Brolsma & Associates (hereinafter called Brolsma) a builder, and also learned that a particular lot owned by Yanow in which they were interested was for sale at a price of thirty thousand dollars ($30,000) plus interest on mortgage. On July 17, 1977 the Greenes entered into a contract with Brolsma to construct a house on Lot 12, Plat IV, The President Country Club in West Palm Beach, Florida for one hundred thirty five thousand dollars ($135,000). Brolsma at all times here involved, was a builder of custom homes and not a land developer as that term is generally recognized. Jack Brolsma owned fifty percent of the corporation bearing his name. The contract provided that Greene would obtain a construction money mortgage and pay to Brolsma one hundred thirty five thousand dollars ($135,000) for the house and lot with the understanding that the lot would be deeded to Greene at cost to Brolsma plus a cost for de-mucking which previous testings had indicated would be required to provide a stable foundation. By Warranty Deed dated August 1, 1977 (Exhibit 10) Brolsma acquired title to Lot 12 from the Yanows. Documentary stamp taxes attached to this deed indicates that the total price was thirty one thousand nine hundred dollars ($31,900). By Warranty Deed dated August 1, 1977 (Exhibit 4) Brolsma deeded Lot 12 to the Greenes. This deed was recorded August 9, 1977. The Greenes qualified for a one hundred eight thousand dollar ($108,000) mortgage with Sun First National Bank of Delray Beach, and on August 8, 1977 executed a mortgage (Exhibit 7) and the transaction closed. Buyers and sellers closing statements are contained in Exhibit 3. At the closing on August 8, 1977 documentary stamps in the amount of four hundred five dollars ($405) and surtax of one hundred forty eight dollars and fifty cents ($148.50) was charged to buyer and affixed to deed. At closing buyers paid some twenty seven thousand five hundred dollars ($27,500) and the previous mortgage on the land was satisfied. Thereafter the construction was commenced with the mortgagee making disbursement to Brolsma per schedule (Exhibit 13). Prior to the time Lot 12 was purchased by Brolsma, Petitioners were aware of the ownership of this lot and that it was for sale for approximately thirty thousand dollars ($30,000). Since Brolsma was more familiar with acquiring land than were Petitioners he agreed to obtain the lot upon which Petitioners had contracted to have their house built.

Florida Laws (1) 201.02
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