Downing v. First Nat. Bank of Lake City

• Decision Date: 17 June 1955
• Citation: 81 So.2d 486
• Parties: W. H. DOWNING and Anna B.Downing, his wife, Appellants, v. The FIRST NATIONAL BANK OF LAKE CITY, a banking corporation, Appellee.
• Court: Florida Supreme Court

Page 486

81 So.2d 486

W. H. DOWNING and Anna B.Downing, his wife, Appellants, v.The FIRST NATIONAL BANK OF LAKE CITY, a banking corporation, Appellee.

Supreme Court of Florida, En Banc.

June 17, 1955.

Rehearing Denied July 14, 1955.

C. A. Avriett, Jasper, for appellants.

W. H. Wilson, Jr., and A. K. Black, Lake City, for appellee.

DREW, Chief Justice.

Appellants, W. H. Downing and his wife, Anna B. Downing, in February, 1926, executed jointly to appellee bank a $4,000 note secured by a mortgage on property the title to which was in the wife.In June, 1939, $2,828 remained due on the note and to take the account out of 'past due status', the husband, alone, executed a new note to appellee for that sum payable July 1, 1939.Under the date of November 28, 1939, appellants jointly executed an instrument assigning to appellee all their right, title and interest in an insurance policy in the amount of $5,000 on the life of the husband, in which the wife was the beneficiary.In March, 1941, the bank was named beneficiary in the policy itself.

In February, 1946, the appellee brought suit to foreclose the original mortgage and note, attaching to the complaint copies of both instruments.In October, 1952, the complaint was amended to base the cause of action upon the new note signed only by the husband, alleging that without impairment of the original debt the husband by signing the note 'further bound the defendants to pay said amount of $2,828.00.'

In the amendmentappellee with reference to the insurance policy alleged that 'in order to keep said policy in effect payment of premiums was necessary; that defendants failed to pay the same as due and in order to protect the parties hereto', the plaintiff paid premiums amounting to $3,900, and that such payments were 'in truth and fact, in equity, a further advance on said original note and mortgage.'Recovery was also sought for costs and attorney's fees for services in foreclosure of the mortgage and for other alleged debts of the husband not here in question.

Hearings were held before a special examiner.At these hearings, the appellee did not introduce into evidence the original note and mortgage nor make any accounting for the failure to produce these instruments.However, the $2,828 note signed only by Mr. Downing was received in evidence.

The only witness was the cashier for the bank.With reference to circumstances surrounding execution of the $2,828 note, the cashier's testimony is not clear but he did state that this note was accepted by the bank under an agreement with Mr. Downing that the original $4,000 note and mortgage would be collateral for the note.In this connection, just how Mr. Downing could put up property of the bank, which the mortgage obviously was, as security for the note, we fail to see.

The insurance policy and its assignment to appellee also were received in evidence.Concerning these instruments, the cashier testified in part as follows:

'Q.It was your understanding then at that time that the policy was taken out and delivered to the Bank as a further security for the indebtedness that Mr. Downing had at the Bank at that time?(Italics added.)A.That's true.'

Later he testified about the insurance policy as follows:

'Q.Do you know whether or not this was intended to be as collateral for any debts and Mrs. Downing might owe the Bank?A.That was for either or both of them.

'Q.Was that agreement made with Mr. Downing?A.I don't know, I wasn't present.

'Q.Youdon't know whether or not she agreed to that or not?A.She signed it.

'Q.She signed what?A.Whatever you call it, the change of beneficiary.

'Q.Would you know whether or not in her agreeing to the change of beneficiary in the insurance policy that it was intended to be collateral for both her debts and Mr. Downing's debts, or just Mr. Downing's debts, or do you know?A.I wasn't present at the signing of this but my understanding was that it covered all the debts to the Bank by Mr. Downing or Mrs. Downing, that's what I presumed it to be.'

Pursuant to report of the special examiner, who made no findings of fact, the trial court, among other things, ordered that both Mr. and Mrs. Downing pay the sum of $2,828 principal and $6,996.05 accrued interest plus attorney's fees, and the sum of $3,476.27, being the amount of premiums on the insurance policy paid by the bank plus interest thereon in the amount of $1,885.07, but failed to allow appellants any credit for the cash surrender value of the policy held by appellee; and the court further ordered that all such sums were a lien upon the property of the wife and directed that such property be sold to satisfy said decree.

Appellants urge that the decree for the $2,828 plus interest is erroneous because there...