Bobby Jones Garden Apartments, Inc. v. Connecticut Mut. Life Ins. Co.

• Decision Date: 08 September 1967
• Docket Number: No. 67-84,67-84
• Citation: 202 So.2d 226
• Parties: BOBBY JONES GARDEN APARTMENTS, INC., a Florida corporation, Sande Rocke and Mary A. Rocke, Appellants, v. The CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, a Connecticut corporation, Appellee.
• Court: Florida District Court of Appeals

Page 226

202 So.2d 226

BOBBY JONES GARDEN APARTMENTS, INC., a Florida corporation, Sande Rocke and Mary A. Rocke, Appellants, v. The CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, a Connecticut corporation, Appellee.

No. 67-84.

District Court of Appeal of Florida, Second District.

Sept. 8, 1967.

Millican & Trawick, Sarasota, for appellants.

Williams, Parker, Harrison & Dietz, Sarasota, for appellee.

HODGES, JOHN G., Associate Judge.

At a hearing on Plaintiff's Motion for Deficiency Decree in a suit, under Section 702.02, Florida Statutes, F.S.A., to foreclose a mortgage in the principal amount of $820,000, the defendants offered testimony as to value of the property involved. After entry of final decree, a sale had been properly held, certificate thereof duly filed and, no objection having been made, the Clerk's Certificate of Title had been issued according to law. The plaintiff had successfully bid in the property at the sale for $700,000.

The trial court refused to consider the evidence offered by defendants, basing its ruling that the foreclosure sale price was conclusive of the value of the property upon the decision of the Supreme Court in Southern Realty & Utilities Corporation v. Belmont Mortgage Corporation, 186 So.2d 24, and entered a deficiency decree, including interest and costs, for $185,707.60.

This interlocutory appeal is limited to the Chancellor's said ruling and poses for us the following precise question of law which is squarely before this Court for the first time:

DOES THE FORECLOSURE SALE PRICE CONCLUSIVELY ESTABLISH THE VALUE OF THE MORTGAGED PROPERTY SO AS TO BAR EVIDENCE OFFERED BY A DEFENDANT AGAINST WHOM A DEFICIENCY IS SOUGHT, UNDER SECTION 702.02, FLORIDA STATUTES, WHEN NO OBJECTION TO THE SALE HAS BEEN MADE?

The able and conscientious Chancellor understandably answered the question affirmatively but we cannot agree. Incidentally, he had answered in the negative before the Belmont case.

The legislative proscription, Section 702.02, Subsection (5), bearing upon the question, is as follows:

'VALUE OF PROPERTY.--The value of the property sold by the clerk Shall be conclusively presumed to be the amount bid therefor and for which the property was sold at the sale, unless objection thereto shall be filed in the cause within ten days after the filing of the clerk's certificate of sale. If any objections to said value be filed within such ten day period, such objections shall be considered by the court; provided, however, that the filing of objections to the value of the mortgaged property shall not in any manner affect or cloud the title of the purchaser at the sale to the mortgaged property. If no such objections be filed, the value as fixed herein shall have the same force and effect as if the court had decreed that the value of said property was the amount bid and for which the property was sold at the foreclosure sale.' Section 702.02(5), Fla.Stat. 1965. (Emphasis added.)

The plaintiff confidently asserts that the clear and distinct statutory language involved leaves no room for judicial interpretation. He further contends that when the quoted section was enacted by the 1953 Florida legislature it had before it a line of cases culminating in the Supreme Court decision of Penn Mutual Life Insurance Company v. Moscovitz, 119 Fla. 708, 161 So. 80, and that the statute appears to be nothing more than a legislative codification of the case law of Florida as it existed prior to its enactment. He avers that the decision was reaffirmed in Southern Realty and Utilities Corporation v. Belmont Mortgage Corporation, supra, upon which the trial Chancellor's ruling was based. In addition, he Corporation v. Belmont Mortgage Corporation, price as to value of the property was not a justiciable issue on appeal in the decisions of this court in Builders Finance Co., Inc., of St. Petersburg v. Ridgewood Homesites, Inc., 157 So.2d 551, and Weinstein v. Park Manor Construction Company, Inc., 166 So.2d 842, and argues that Southern Realty overruled the decision of the First District Court of Appeal in Kurkjian v. Fish Carburetor Corporation, 145 So.2d 523, and that of the Third District in Jonas v. Bar-Jam Corp., 170 So.2d 479, both of which enunciated that the sale price is not binding on application for deficiency decree.

Inasmuch as the cited District Court decisions exclusively gird the defendants' appeal, we are directly confronted with an interpretation of the two Supreme Court cases relied upon by the plaintiff and the legal effect, if any, they have upon the decisions advanced by the defendants. While attempting to judicially translate the meaning of the decisions which may appear to be confusing, largely because of the liberal use of the several courts of analogies and collateral conflicting observations not essential to determination of the specific issues involved, we should be permitted to take judicial cognizance of what is commonly known about mortgage foreclosures. In reaching a denouement, we should also keep in mind that the basic purpose of foreclosure is to fully subject the security pledged to the payment of the obligation involved and that thoughtful and sympathetic regard which finds support in established principles of fair play and equity as applied to the particular facts should not be overlooked.

The first Supreme Court case, Southern Realty and Utilities Corporation v. Belmont Mortgage Corporation, involved certiorari from a Third District proceeding wherein the mortgage holder sued to foreclose its mortgage but did not request a deficiency. Objections to the sale were filed on the grounds, among others, that consideration for the sale was inadequate and that it might be used as a deficiency in a later action at law. The trial court ordered a resale of the property and the mortgagee appealed. The Third District Court of Appeal reversed the trial court on the authority of the cases cited here by the defendants, holding, as to the first ground of objection mentioned, that the sale price in the case while it might have been inadequate Was not grossly inadequate and was not 'a sufficient ground for setting aside the sale in the absence of other circumstances tending to cause such inadequacy.' (Italics ours.) The Third District Court also said, with respect to the second ground of objection advanced:

'The amount bid at a foreclosure sale does not conclusively establish the value of the property for the determination of the equities upon an application for a deficiency decree.'

The Supreme Court, in assuming jurisdiction on certiorari taken by the mortgagor, observed:

'The statement of the District Court that: 'The amount bid at a foreclosure sale does not conclusively establish the value of the property for the determination of the equities upon an application for a deficiency decree' is the type of obiter dictum that...