Edgerton v. Ballston Spa Nat. Bank

• Citation: 200 So. 919,146 Fla. 284
• Parties: EDGERTON v. BALLSTON SPA NAT. BANK et al.
• Decision Date: 25 February 1941
• Court: United States State Supreme Court of Florida

200 So. 919

146 Fla. 284

EDGERTON v. BALLSTON SPA NAT. BANK et al.

Florida Supreme Court

February 25, 1941

Rehearing Denied March 27, 1941.

En Banc.

Proceeding by Ina K. Edgerton, etc., against the Ballston Spa National Bank and others for decree declaring certain mortgage and note to be the complainant's individual property and ordering encumbered realty sold to satisfy her claim. From the decree, the complainant appeals.

Reversed with instructions to enter decree in accordance with opinion. Appeal from Circuit Court, Pinellas County; T Frank Hobson, judge.

COUNSEL

Fisher & Sauls and Lincoln C. Bogue, all of St. Petersburg, for appellant.

Cook Harris, Barrett, McGlothlin & Dew, of St. Petersburg, for appellees.

OPINION

THOMAS Justice.

The issues in this case were presented in the equity court by the initial pleading of Ina K. Edgerton and the answer of Ballston Spa National Bank, the answers of the other defendants not having offered any controversial matters which it is necessary for us to determine.

In the prayer of the bill of complaint and the subsequent amendment to it the complainant sought a decree of the court declaring a certain mortgage and note, which we will later describe, to be her individual property, and ordering the encumbered real estate sold by a special master to satisfy her claim. In the alternative, and in the event it was found that the mortgage had been satisfied, she asked the court to determine that the estate of Albert C. Kniskern held the property in trust for her use and benefit free of the lien of the defendant Ballston Spa National Bank.

This prayer was predicated on allegations that in the year 1928 the defendants Brugginks were indebted to complainant and A. C. Kniskern, her father, in the sum of $14,625, and to secure the debt executed one promissory note to these mortgagees 'or survivor,' secured by a mortgage with the customary provisions for defeasance, payment of taxes, and costs incident to foreclosure. It was averred further that in 1931 the father, the owner of an undivided interest in the single note and mortgage, for a valuable consideration assigned the same to the complainant, and that on the same day the mortgagors for a cash consideration, made, executed and delivered to Kniskern a warranty deed conveying the mortgaged property to him alone in exchange for surrender to the debtors of the original note and mortgage, all without the knowledge or authority of the complainant who was a co-owner of the mortgage. It was further asserted that in June, 1932, Kniskern delivered to the defendant, Ballston Spa National Bank, a mortgage on the identical property to secure an indebtedness of $10,000. Later in the same year Kniskern died leaving a last will and testament in which the complainant, Ina K. Edgerton, was named as sole beneficiary.

The factual situation established by the witnesses who testified for the various parties to this controversy is peculiar in many of its aspects. The original mortgagors were indebted to the father and daughter in the sum of $12,000 and $2,000, respectively, evidenced by separate notes secured by separate mortgages, on which total indebtedness interest of $625 had accrued. The mortgages securing these amounts were satisfied and in lieu thereof the one described in the bill of complaint was given, payable to both mortgagees or the survivor. This occurred in the year 1928.

Because of indifference on the part of the debtors in meeting the obligations of the instrument, Kniskern consulted an attorney with reference to the foreclosure of the mortgage and the liquidation of the debt. His daughter was in California at the time. Acting through his representative, J. H. Stephens, he proposed to the mortgagors that he would pay them $800 for the execution of a deed and for their interest in certain personal property situated on the premises, in return for which he would cancel the indebtedness. Accordingly, on the 20th day of May, 1931, the agent met with the debtors and their attorney, the money was paid and Kniskern surrendered the mortgage, and the promissory note on which there was written: 'Paid by Delivery of Deed and etc, May 20, 1931.' It does not appear that a satisfaction was given. Simultaneously, the representative received on behalf of Kniskern a warranty deed conveying the property to the principal. At the time of these negotiations the grantee of the deed, Kniskern, was not present and his spokesman on the occasion was J. H. Stephens. It is important to note here that no mention was made in the deed of the other mortgage holder and that she did not know the agent and, in fact, didn't become acquainted with him until the time of the trial. It was explained that the father, although in the city, was not actually present because he had had some difficulty with the debtors and it was thought that the matter might be closed with more harmony if he didn't appear. On the same day Kniskern met the agent, Stephens, to receive a report of the transaction, and when he was told of the manner in which it was handled, reprimanded him because he felt that the interests of his daughter had not been protected. Thereupon, the same day, he executed an assignment of the entire mortgage to his daughter, despite the notation on the note which we have described, the warranty deed which he had received through his agent and the surrender of the mortgage to the ones who executed it. The deed was filed for record June 2d, and the assignment, May 30, 1931.

After recordation of these instruments the bank, without making any investigation to ascertain the state of the title of the property, accepted a mortgage from Kniskern to secure a loan of $10,000.

The chancellor was of the opinion that by reason of the relationship between Ina K. Edgerton and A. C. Kniskern, and the possession of the note by the latter who had held the same and had undertaken the transaction toward the liquidation of the indebtedness, he was authorized to satisfy the mortgage by acceptance of the deed and to bind his daughter...