Christie v. Highland Waterfront Co.

• Decision Date: 12 March 1934
• Parties: CHRISTIE et ux. v. HIGHLAND WATERFRONT CO.
• Court: Florida Supreme Court

153 So. 784

114 Fla. 263

CHRISTIE et ux. v. HIGHLAND WATERFRONT CO.

Florida Supreme Court

March 12, 1934

Rehearing Denied April 4, 1934.

En Banc.

Suit by the Highland Waterfront Company against George T. Christie and wife. From a final decree for complainant, and from an order denying defendants' motion to vacate the final decree, defendants appeal.

Affirmed.

On Petition for Rehearing.

Appeal from Circuit Court, Wakulla County; J. B Johnson, judge.

COUNSEL

W McL. Christie, of Jacksonville, and John L. Neeley, of Tallahassee, for appellants.

Francis B. Winthrop, of Tallahassee, for appellee.

OPINION

PER CURIAM.

A suit was brought July 23, 1931, to enforce a mortgage lien upon real estate given to secure the payment of three promissory notes aggregating $20,000 dated October 3, 1925, payable severally one, two, and three years after date with interest from date at 6 per cent. per annum, payable annually; the indebtedness being the balance due on the purchase price of the land mortgaged. The mortgage was assigned to the Lewis State Bank in April, 1929, and to the Highland Waterfront Company July 20, 1931. It appears that on July 28, 1928, a total of $4,227.66 had been paid on the principal of the $20,000 debt. On that date it was stipulated in writing under seal by the parties that the payment of the balance of the principal of the mortgage be extended for the period of two years from the 3d day of October, 1928, the mortgagor renewing the covenants of the mortgage except as to the time of payment of the balance of the principal of the mortgage debt, which time of payment was extended from October 3, 1928, to October 3, 1930.

A demurrer to the bill of complaint was overruled.

The answer contains the following: 'Further answering the said bill of complaint, these defendants say that subsequent to the due date of all of the notes secured by said mortgage and prior to the assignment thereof by the said Florence R. S. Phillips and the Lewis State Bank of Tallahassee to the complainant, and while the said Florence R. S. Phillips was the owner of said notes and mortgage, the said Florence R. S. Phillips agreed with the defendant, Geo. T. Christie, that she would not foreclose said mortgage but that the said defendant could go ahead with his planned improvements and operate said property and make such payments from time to time as he could upon said mortgage indebtedness; that said defendant, Geo. T. Christie, did continue with the improvements and operation of said property as aforesaid and did make certain payments to the said Florence R. S. Phillips as specified in the bill of complaint, and the said Florence R. S. Phillips never demanded the payment of said mortgage indebtedness thereafter, neither did the Lewis State Bank demand payment of said indebtedness and never did the said Highland Waterfront Company demand the payment thereof; that no communication has ever been received by said defendants, or either of them, from either of said parties above referred to demanding payment of said mortgage indebtedness, or electing to declare said mortgage indebtedness due and payable.'

Such quoted part of the answer was stricken on motion of the complainant.

It is argued that 'a demand for payment of the notes was necessary to mature them and that a notice of an election to foreclose the mortgage was necessary in order to ripen them for foreclosure.' Such contentions are predicated upon averments of the answer quoted above that subsequent to the due dates of the notes secured by the mortgage and prior to the assignment thereof, the owner of the notes and mortgage agreed with the mortgagor 'that she would not foreclose said mortgage but that said defendant could go ahead with his planned improvements and operate said property and make such payments from time to time as he could upon said mortgage indebtedness; that said defendant did continue with the improvements and operation of said property as aforesaid and did make certain payments' as specified in the bill of complaint, and the mortgagee and her assigns 'never demanded the payment of the said mortgage indebtedness thereafter.'

The quoted averments of the answer were stricken on motion of the complainant. This was not error because there was no consideration shown for the very indefinite parol agreement which it is claimed would modify the covenants of the mortgage. While the courtesy of notice of intended foreclosure might have accommodated the mortgagor without burdening the mortgage holder, the stated agreement was not effective to require a demand for payment to mature the notes and did not give the mortgagor a right to notice before foreclosure proceedings were instituted. In this case the foreclosure was not accelerated under the original covenants, and one extension of two years from the due date of the last note had been made by mutual covenants. This distinguishes the case from Kreiss Potassium Phosphate Co. et al. v. Knight, 98 Fla. 1004, 124 So. 751, and Jaudon v. Equitable Life Assur. Soc. of United States, 102 Fla. 782, 136 So. 517, cited by counsel for defendants, plaintiffs in error here.

A counterclaim was filed in which it is in effect alleged that the original mortgagee and the mortgagor 'agreed for valuable considerations to disregard maturities and covenants of defeasance and acceleration on condition that the' mortgagor 'would expend his personal money, first for improvements, greatly enhancing the value of the mortgagee's security and at the expense of the application of only such sums as he could pay upon the mortgage debt pending the installment of the improvements.' That the mortgagor 'in consideration of the said waiver expended approximately eleven thousand dollars for improvements and paid to the said mortgagee approximately six thousand dollars on the said indebtedness.' That the assignee of the mortgage 'was fully aware of the waiver hereinabove set forth and took the said mortgage as collateral securities with full knowledge of the said waiver.' That regardless of the waiver the mortgagee and the assignee of the mortgage 'sold the said mortgage and all of their rights, title and interests therein to the plaintiff who took it for' $15,000 and immediately undertook to 'enforce the defeasance covenants and the acceleration clause of the mortgage notwithstanding its knowledge of the waiver rendering the said covenants and acceleration clause void.' Defendants pray 'that they be allowed after an accounting * * * the full credit of the said' sums paid for improvements and on the indebtedness, to wit 'aggregating approximately seventeen thousand dollars and that the court decree the plaintiff entitled to only the difference between the same' and the $20,000 mortgage debt, viz., $3,000 plus the interest due on the said indebtedness.

Since at the time the suit was brought the acceleration covenants of the mortgage had by the passage of time ceased to be operative, the 'valuable considerations' alleged were the agreement 'to disregard maturities and covenants of defeasance,' on condition that the mortgagor would improve the property thereby increasing the security of the mortgagee and would make such payments as he could on the mortgage debt.

Even if there be a valuable consideration making the alleged agreement of the mortgagee 'to disregard maturities and covenants of defeasance,' binding upon the mortgagee and her assignee, the agreement fixes no limit for the forbearance, and it does not appear when the agreement was made. The first extension expired October 3, 1930, and this suit was instituted July 23, 1931. It...