Cragin v. Ocean & Lake Realty Co.

• Decision Date: 28 March 1931
• Citation: 101 Fla. 1324,133 So. 569
• Parties: CRAGIN et al. SAME v. OCEAN & LAKE REALTY CO. SAME v. PALM BEACH OCEAN REALTY CO.
• Court: Florida Supreme Court

133 So. 569

101 Fla. 1324

CRAGIN et al. SAME v. OCEAN & LAKE REALTY CO. SAME v. PALM BEACH OCEAN REALTY CO.

Florida Supreme Court

March 28, 1931

En Banc.

Error to Circuit Court, Palm Beach County; C. E. Chillingworth Judge.

Separate actions by H. Frances Cragin and another, as cotrustees under the last will and testament of Charles I. Cragin, deceased against the Ocean & Lake Realty Company, and against the Palm Beach Ocean Realty Company. Judgment in each case for the defendant, and plaintiffs in each case bring error. Cases were consolidated for the purpose of review by stipulation of the parties.

Judgment in each case affirmed.

See also, 97 Fla. 452, 121 So. 460.

Syllabus by the Court.

SYLLABUS

The statute and rule providing for the entry of deficiency decrees in suits in equity to foreclose mortgages is an extension of the generally accepted doctrine that, where a court of equity obtains jurisdiction of an action upon an equitable ground, it will retain such jurisdiction and administer full relief, both legal and equitable, so far as it pertains to the same transaction or the same subject-matter.

Under the ancient and well-settled doctrine of res judicata, where a competent court has acquired jurisdiction of the subject-matter and of the parties, the judgment or decree rendered is binding and will bar another suit on the same cause of action between the same parties or their privies and will not be set aside or annulled on collateral attack, even though there were errors or irregularities in the proceedings which would have afforded good ground for direct attack by writ of error or appeal.

Under the provisions of chapter 11993, Acts of 1927, being section 5751, Comp. Gen. Laws, as amended by Chapter 13625, of the Acts of 1929, where, as in this case, a suit is filed in equity by the holders of a purchase-money mortgage on real estate for the foreclosure thereof, against the original mortgagor and his grantee, and a deficiency decree is prayed for, and a decree for a portion of the deficiency existing after the application of the proceeds of the foreclosure sale to the mortgage debt was granted by the court, the mortgagee having been the purchaser of the property at the foreclosure sale, the deficiency decree so rendered is res judicata, and the mortgagee complainant has no right to sue such original mortgagor at law for any balance of the mortgage debt remaining after applying thereto the proceeds of the foreclosure sale and the portion of the deficiency decreed to him in the foreclosure proceedings.

The validity of the statute is not shaken by the fact that the court of equity may thereunder exercise a 'sound judicial discretion' in determining whether the complainant in mortgage foreclosure cases is entitled to a deficiency decree 'for any portion of a deficiency, should one exist.' The complainant is charged with knowledge of the existence of such power in the equity court, and, when he voluntarily invokes the exercise of such jurisdiction, his only remedy for any abuse of such discretionary power is by appeal.

The validity of the statute above referred to, vesting courts of equity with 'sound judicial discretion' in the rendition of deficiency decrees in mortgage foreclosure cases, is further sustained by the fact that the complainant has an election of remedies. If he desires to stand on his right in a suit at law to recover in full any deficiency that may exist after the foreclosure in equity, he may do so, but in such case he should in his foreclosure proceedings refrain from submitting the adjudication of that question to the equity court.

Under the statute of 1927 as amended by chapter 13625 of the Laws of 1929, the complainant in foreclosure proceedings is not barred from suing at law to recover any balance remaining due on the mortgage debt, after crediting the proceeds of the sale and any portion of the deficiency which might have been allowed him by the chancery court, except in cases which are fairly within the letter and spirit of the proviso contained in said statute as so amended.

The office of a proviso, as a general rule, is to restrain the enacting clause of a statute; to except something which would otherwise be within it.

Statutes should, when reasonably possible, be so construed as not to conflict with the Constitution or well-settled legal principles, but where, as here, the plain language of a statute cannot be given effect without encroaching to some extent upon the principle of res judicata, the courts should nevertheless give to such statute the operative effect manifestly demanded by the language used by the Legislature in enacting it, where no constitutional provision is thereby violated.

COUNSEL

Wideman, Wideman & Wardlaw, of West Palm Beach, for plaintiffs in error.

Henry J. O'Neill, of Palm Beach, for defendants in error.

OPINION

BROWN J.

The controlling question in both of these cases is whether or not a complainant in a mortgage foreclosure suit, who by his pleadings invoked the exercise of the chancery court's jurisdiction to adjudicate his alleged right to a deficiency decree and in whose behalf the court rendered a decree for a part of the deficiency claimed against the mortgagor and his grantee who covenanted in the deed to assume and pay the mortgage debt, can afterwards go into a court of law and obtain a judgment for the remainder of the claimed deficiency against said original mortgagor on the same cause of action, after applying the proceeds of the foreclosure sale and that portion of the deficiency allowed by the equity court to the obligation secured by the mortgage.

Plaintiffs in error brought two suits, one against each of the respective defendants in error, in the circuit court of Palm Beach county, in January, 1929, on three certain promissory notes for approximately $225,000 each, dated July 27, 1925, and due one, two, and three years after date, respectively, together with interest thereon and attorney's fees. The notes were purchase-money notes executed by the Ocean & Lake Realty Company and secured by mortgage. The Palm Beach Realty Company acquired title to the property on October 15, 1925, and by covenant in the deed assumed the payment of said notes.

The two cases have, by stipulation of the parties, been in effect consolidated for the purposes of appellate review, and come here under one transcript, showing the record in the case in which the Ocean & Lake Realty Company was defendant; it being stipulated here that the judgment of this court in that case shall control the judgment in the companion case. Similar pleas of res judicata were interposed and upheld by the trial court in each case. We will now proceed to consider the case in which the original mortgagor, Ocean & Lake Realty Company, is defendant in error.

The defendant Ocean & Lake Realty Company interposed a plea of res judicata, which set up, among other things, that the plaintiffs conveyed certain lands to said defendant on July 27, 1925, at which time defendant paid to the plaintiffs $500,000 in cash and executed and delivered to the plaintiffs certain notes and mortgage for the balance of the purchase price aggregating $672,529.50, being the notes described in the declaration; that thereafter on October 15 1925, the defendant, Ocean & Lake Realty Company, conveyed said lands to the Palm Beach Realty Company by warranty deed which contained a covenant by which the grantee assumed the payment of said mortgage; that the Palm Beach Ocean Realty Company went into possession of the land and expended upwards of $250,000 on an extensive system of improvements, which materially enhanced the value of said land; that on February 12, 1927, the plaintiffs as complainants, instituted suit in the circuit court for Palm Beach county to foreclose said mortgage and in its bill prayed for a deficiency judgment against both of said above-named realty companies; that the final decree in said suit, rendered February 2, 1928, ascertained the balance due on said notes and mortgage, including interest, solicitors' fees, etc., to be $1,058,044.81, and provided that in default of payment of such sum the property be sold as prayed in said decree; that upon such sale the property was sold to the complainants for $150,000; that the sale was confirmed and the property conveyed to the complainants; that complainants moved the court for the entry of a deficiency decree in connection with the confirmation of the special master's report, and acting upon said motion the court confirmed the report of the master and against both said defendants in the sum agaisnst both said defendants in the sum of $50,000, which decree was duly filed and recorded in the chancery order book, and remained valid and subsisting, in no way modified, abated, or reversed, and from which the complainants took no appeal; that in said chancery proceedings the plaintiffs in this common-law suit were parties complainant and the two realty companies above named were defendants, and that the same notes and mortgage, and the same covenant of assumption were fully set up and pleaded in said chancery cause, and that the cause of action sought to be enforced in the common-law action was decided by the decree rendered in said chancery cause. The court on motion struck certain portions of said plea of res judicata, which it was unnecessary here to set forth, but overruled the demurrer to the plea, and the suit went to final judgment in favor of defendant, on November 18, 1930. From the final judgments rendered in favor of the defendants in each of the cases, these two writs of error were taken. Plaintiffs in error have assigned as error the overruling of plaintiff's demurrer to defendant's first plea, the plea of res...