Chase & Co. v. Little

• Decision Date: 27 September 1934
• Citation: 116 Fla. 667,156 So. 609
• Parties: CHASE & CO. et al. v. LITTLE.
• Court: Florida Supreme Court

156 So. 609

116 Fla. 667

CHASE & CO. et al. v. LITTLE.

Florida Supreme Court

September 27, 1934

Suit by J. B. Little against Chase & Co., a corporation, and another. Decree for plaintiff, and defendants appeal.

Affirmed. Appeal from Circuit Court, Seminole County; M B. Smith, judge.

COUNSEL

Hull Landis & Whitehair and D. C. Hull, all of De Land, for appellants.

E. W. &amp R. C. Davis, of Orlando, for appellee.

OPINION

BUFORD Justice.

The appeal in this case is from a final decree of foreclosure in a suit instituted by the appellee against the appellants. The facts disclosed are that the appellee, J. B. Little, negotiated the purchase of certain lands which were then subject to the mortgage here sought to be foreclosed. The lands were conveyed subject to that mortgage lien. Little directed the deed to be made to Ruth Stapler, his daughter. By inadvertence, the deed was made to J. C. Stapler, Ruth's husband. J. C. Stapler went into possession of the property. While in possession of this property, he became indebted to Chase & Co. While so indebted to Chase & Co., J. C. Stapler, joined by his wife, Ruth Stapler, reconveyed this property subject to the mortgage above referred to to J. B. Little, and J. B. Little, joined by his wife, then conveyed the property, subject to the mortgage to Ruth Stapler. J. C. Stapler defaulted in payments due Chase & Co., and Chase & Co. filed a creditor's bill to set aside and to have declared null and void the conveyance from J. C. Stapler and wife to J. B. Little and also the conveyance from J. B. Little and wife to Ruth Stapler. This was by way of a creditor's bill after suit at law had been filed against Stapler. Judgment was obtained in the suit at law, and thereafter decree was obtained in favor of Chase & Co. against all parties defendant in the suit instituted by way of creditor's bill.

There appears to have been no concealment by J. B. Little of his part in the several transactions involved. The record shows that he admitted that the conveyance from J. C. Stapler and wife to J. B. Little was made merely for the purpose of getting the title conveyed from J. C. Stapler to his wife, Ruth Stapler, and that no consideration passed for either of those conveyances. After Little had testified in connection with the creditor's bill suit, he purchased the mortgage and note which it secured from the mortgagee. The note was indorsed to him and the mortgage assigned to him. After prevailing in the suit by way of creditor's bill, Chase & Co. had execution levied on the property and bought it in. While Chase & Co. were the owners of the property, J. B. Little brought suit against the original mortgagor and the then owners, Chase & Co., to foreclose the mortgage.

The bill to foreclose contained all necessary allegations. Motion to dismiss and motion to strike certain allegations of the bill of complaint were properly denied. Answer was filed. The twelfth paragraph of the answer as amended set up as a defense that J. B. Little had theretofore filed a suit against the same parties on the same cause of action praying the same relief and that that suit was dismissed in so far as it related to, or in anywise affected, the defendant Chase & Co. The answer shows that the order dismissing the suit was in compliance with old rule 55 for failure of the complainant to set down a general demurrer which had theretofore been filed by defendant in the said cause.

Motion to strike was granted.

There are two contentions presented for our determination. The first is whether or not J. B. Little is judicially estopped from maintaining the suit on the mortgage because of the result and final decree in the suit by way of creditor's bill. It is contended that, when Little bought the note and mortgage, he was a party to the suit by way of creditor's bill, and that the decree against him in that case precluded his becoming owner of the mortgage with the right to foreclose.

We do not think the position is tenable. There could be no merger in Little of the title and the incumbrance, because at the instance of the defendant it was adjudged and decreed that Little was at no time the owner and holder of the legal title to the property. For merger to occur we find the rule stated in 41 C.J. p. 775, as follows:

'Ordinarily, the purchase or acquisition of the equity of redemption in mortgaged premises by the mortgagee results in a merger of the two estates, vesting the mortgagee with the complete title, and putting an end to his rights or title under the mortgage. But to constitute a merger, the two estates or interests must unite in the same person in the same right, and the estate acquired must be nothing less than the complete legal title in fee, unencumbered with conditions or restrictive agreements, and not liable to be defeated because of fraud or undue influence, or on other grounds. Furthermore, a merger will not be allowed where it would work injustice or violate well established principles of equity or the intention of the parties.'

And again the same author says:

'The conveyance of the mortgaged premises to the mortgagee if fairly and honestly made, where made in satisfaction or cancellation of the debt, extinguishes all right or equity of redemption on the part of the mortgagor, and where the legal title is regarded as vested in the mortgagee by the mortgage and default of the mortgagor, a conveyance taken by the mortgagee in lieu of a formal foreclosure has been held to cut off the rights of a subsequent mortgagee. The mortgagee's purchase of the equity of redemption results in the extinguishment of the mortgage debt, or in a cancellation of the mortgagee's claim under the mortgage, provided such extinguishment is in accord with the expressed or implied intention of the mortgagee, the mortgagee's intent being a question of fact for the jury. But the debt is not extinguished where the mortgagee secures no title to the land by his purchase, or where, at a public sale, the mortgagee buys the property subject to mortgage for less than the mortgage debt.'

In the case of Jackson v. Relf et al., 26 Fla. 465, 8 So. 184, this court said:

'A merger takes place when a greater estate and a less meet in one and the same person, in one and the same right, without any intermediate estate, the lesser estate being thereby merged in the greater; but merger is not a necessary result of the union of the two estates in the same person. The intention and interest of the party who unites the two estates in himself will determine whether or not a merger takes place.

'Where a mortgage incumbrancer becomes the owner of the legal title, or of the equity of redemption, a merger will not be held to take place if it be apparent that it was not the intention of the owner, or if, in the absence of any intention, the merger would be against his manifest interest. And a purchase of the mortgaged estate at a tax-sale by the mortgagee, to protect the mortgage lien, and save the property from being lost to him, does not effect a merger.'

In the instant case there was no pretended title in Little at the time he purchased the note and mortgage. So it cannot be maintained that merger resulted from his purchase of the note and mortgage.

The rule applicable to judicial estoppel is stated in 21 C.J. 1228 et seq., as follows:

'A claim made or position taken in a former action or judicial proceeding will, in general, estop the party to make an inconsistent claim or to take a conflicting position in a subsequent action or judicial proceeding to the prejudice of the adverse party.

'In order to work and estoppel the position assumed in the former trial must have been successfully maintained. In proceedings terminating in a judgment, the positions must be clearly inconsistent, the parties must be the same and the same questions must be involved. So the party claiming the estoppel must have been misled and have changed his position and an estoppel is not raised by conduct of one party to a suit, unles by reason thereof the other party has been so placed as to make it unjust to him to allow the first party to change his position. There can be no estoppel where both parties are equally in possession of all the facts pertaining to the matter relied on as an estoppel; where the conduct relied on to create the estoppel was caused by the act of the party claiming the estoppel; or where the positions taken involved solely a question of law. And in no event can estoppel be extended beyond the natural and reasonable import of the acts or...