Federal Land Bank of Columbia v. Godwin

• Citation: 145 So. 883,107 Fla. 537
• Parties: FEDERAL LAND BANK OF COLUMBIA v. GODWIN et al.
• Decision Date: 09 January 1933
• Court: United States State Supreme Court of Florida

145 So. 883

107 Fla. 537

FEDERAL LAND BANK OF COLUMBIA v. GODWIN et al.

Florida Supreme Court

January 9, 1933

En Banc.

On petition for rehearing.

Former opinion modified to extent indicated in opinion, and rehearing denied.

For former opinion, see 136 So. 513.

Appeal from Circuit Court, Taylor County; Hal W. Adams, Judge.

COUNSEL

W. B. Davis, of Perry, Waller & Pepper, of Tallahassee, and James H. Finch, of Marianna, for appellant.

L. W Blanton, of Perry, for appellees.

OPINION

TERRELL J.

The opinion filed in this cause August 7, 1931 (136 So. 513) quotes the bill of complaint as alleging that on July 13 1926, W. B. Godwin and wife executed a mortgage to the First National Bank of Perry to secure the sum of $1,200, and that on September 6, 1926, the same mortgagors executed a mortgage to F. G. Alderman to secure the sum of $1,100; the latter mortgage describing the same lands as the former one, except forty acres. The bill also alleges that on December 30, 1927, Godwin and wife executed a second mortgage to the First National Bank of Perry to secure the renewal of extension of the note and mortgage of July 13, 1926, said renewal mortgage covering the same lands as described in the first mortgage, and being in the amount of $1,631. The bill further alleges that on August 28, 1928, Godwin and wife executed to the Federal Land Bank of Columbia their mortgage in the sum of $1,600, to be paid on the amortization plan in thirty-five annual installments, with provision for acceleration of maturity in the event of failure to meet deferred payments promptly.

This suit was brought by appellant as complainant below to foreclose the mortgage of August 28, 1928. The bill prays that the mortgage to the First National Bank of Perry dated July 13, 1926, be foreclosed, and that complainant, if necessary, be subrogated to the rights of said bank. On this petition for rehearing, the main question presented is whether or not under the facts as stated the right of subrogation to the place of the First National Bank of Perry exists in favor of complainant as against Alderman, the holder of the intervening mortgage.

The mortgage to Alderman having been executed September 6, 1926, and the mortgage to the First National Bank of Perry having been first executed July 13, 1926, and renewed December 30, 1927, did the Alderman mortgage, as the result of such renewal, become a first mortgage or did the mortgage of the First National Bank of Perry still retain its position as a first mortgage?

The rule determining whether a renewal or substitution mortgage retains priority over intervening mortgages and judgments is stated in 5 Thompson on Real Property, § 4263, p. 353, to be as follows:

'Whether a second mortgage between the same parties and upon the same lands given upon the release or cancellation of the first is taken merely as a renewal or in payment and satisfaction of the first mortgage depends largely upon the intention of the parties. Where the intention of the parties is simply to make a renewal and extension of the old debt, and the satisfaction of the old mortgage and the taking of a new one are practically simultaneous acts or parts of the same transaction, the taking of the second mortgage is not considered an extinguishment of the first, but a renewal thereof, and does not give priority to intervening judgment or mortgage creditors of the mortgagor, especially where the renewal or substitution is made in good faith, without notice of the intervening lien and without any intention to release the original lien. The rule, however, does not apply where there is evidence of an intention to waive the lien of the prior mortgage, or to effect a payment thereof, neither is the rule applicable where the new mortgage is given to a different person from whom the debtor borrowed the money to pay off the old mortgage, nor where the new mortgage secures a distinct debt from the old, or an additional debt, the satisfaction in such cases operating as a complete discharge of the first mortgage.'

The record discloses that the mortgage and note of December 30, 1927, was given as a renewal or extension of the mortgage and note of July 13, 1926, and was so intended by the parties thereto. Both mortgages were between the same parties, covered the same lands, were for the same amounts, except as to accrued interest and cost, which were included in the new mortgage, and the giving of the new and the attempted discharge or satisfaction of the old mortgage were parts of the same transaction. Under such circumstances the renewal mortgage of December 30, 1927, was well within the rule as above announced, and retained its position of priority over the Alderman mortgage.

Since the renewal mortgage retains its position of priority over the Alderman mortgage, and this suit was brought to foreclose the mortgage of August 28, 1928, should the appellant be subrogated to the rights of the First National Bank of Perry as against Alderman, the holder of the second or intervening mortgage?

The doctrine of subrogation does not arise from statute or custom, but is...