Etter v. State Bank of Florida

• Decision Date: 09 August 1918
• Citation: 76 Fla. 203,79 So. 724
• Court: Florida Supreme Court
• Parties: ETTER v. STATE BANK OF FLORIDA.

79 So. 724

76 Fla. 203

ETTER v. STATE BANK OF FLORIDA.

Florida Supreme Court

August 9, 1918

Appeal from Circuit Court, Duval County; George Couper Gibbs, Judge.

Suit by the State Bank of Florida against Samuel H. Etter. From a decree confirming the master's report of a sale of property under a decree of foreclosure and awarding a deficiency judgment against the defendant, he appeals. Reversed, with directions.

Syllabus by the Court

SYLLABUS

The entry of deficiency judgments against the mortgagee or one liable for the debt in foreclosure proceedings is a power exercised by the courts of equity in this state under rule No. 89 of Circuit Courts in Equity Actions.

As between the parties to the suit, the sum for which the mortgaged premises were sold must, so long as the sale stands, be taken as the conclusive test of their value.

Any defense that may be offered to a decree of foreclosure or against a personal decree for the debt should be presented in due course during the proceedings, or sufficient reason given for not doing so.

Where the mortgagor is not in possession nor has ever been in possession of the land mortgaged to secure the purchase money, he may set up the outstanding title as a defense to a bill to foreclose brought by the vendor for the unpaid purchase money.

An objection by the mortgagor to the entry of a deficiency judgment against him in a foreclosure proceeding brought by the vendor of the land for the purchase money may rest upon the failure of consideration for the mortgaged debt, when it appears that the facts constituting the defense were not known to the mortgagor in time to present the defense in the regular course of procedure, and that he used due diligence in presenting the same.

COUNSEL Cromwell Gibbons, of Jacksonville, for appellant.

Richard P. Daniel, of Jacksonville, for appellee.

OPINION

ELLIS J.

This is an appeal from a decree confirming the master's report of a sale of property made under a decree of foreclosure and awarding a deficiency judgment against the defendant below in favor of the complainant bank.

In July, 1915, the State Bank of Florida exhibited its bill in chancery against Samuel H. Etter and others to enforce a mortgage lien upon two lots or parcels of land located in Jacksonville, Duval county, Fla. It was alleged that Samuel H. Etter, hereinafter referred to as the 'appellant,' being indebted to the complainant bank, executed and delivered his promissory note to the bank for the amount of the indebtedness, and on the same day, in order to secure the payment of the note, executed and delivered to the bank a mortgage upon the two lots mentioned; that the mortgage was duly recorded in the public records of Duval county; that the indebtedness became due in October, 1910; but that the defendant Etter had failed to pay the same or interest upon the note since its maturity. It was also alleged that in May 1910, Etter and wife conveyed the mortgaged property to Louis H. Mattair. The bill prayed that the property might be sold and the proceeds of the sale be applied to the payment of the indebtedness, interest, attorneys' fees, and court costs and for a deficiency judgment against Etter in the event the property described should not sell for enough money to pay the indebtedness, interest, and charges.

In February, 1916, a decree of foreclosure was entered, which adjudged the equities to be with the complainant, adjudged the amount due from Etter to the complainant for principal interest, attorneys' fees, costs, and charges, decreed that the same be paid within a certain time, and in default thereof that the mortgaged property described in the bill be sold for cash and the proceeds of such sale be applied to the indebtedness mentioned. A special master was appointed to execute the decree.

It appears that the mortgaged property was sold under this decree in April, 1916, and Samuel H. Etter bid the highest price therefor; but, failing to pay the master the amount which he had bidden for the property, the sale was vacated and set aside by decree made in August, 1916, and another sale ordered to be made, the amount of the indebtedness ascertained, and Etter was decreed to pay the same to the complainant forthwith.

In September, 1916, the master made his report that the property was again sold in September, 1916; that the complainant became the purchaser at the same price which Etter had bidden therefor at the sale in April before; that the money had been paid over to the master who had applied it as the court had directed, which left a balance due to the complainant of $2,419.84.

To this report the defendant Etter filed objections, the substance of which is that the title to one of the parcels or lots of land is defective; that the lot was not in defendant's possession; that the property came through the agency of the complainant, viz. the president of the complainant bank; that because of the defective title to one of the lots the property did not sell for its fair value; that complainant knew of the defect in title before the decree of August 1916, was entered; and that the defendant Etter had filed his bill of complaint against the complainant bank in August, 1916, to obtain such relief as would remedy the defective title and avoid the damage resulting from a forced sale of the property, a nominal bid for the same by the complainant, and a deficiency judgment against the defendant Etter.

It is contended that, under the circumstances set forth in the objections filed to the master's report, the court should not have entered a deficiency judgment against the defendant in favor of the complainant.

The motion was supported by the affidavit of Etter and Richardson as to the defective title to one of the lots and its possession by strangers and by the affidavits of others as to the value of the property. An affidavit in behalf of the complainant was also filed as to the value of the property advertised and sold under the decree.

It was stated in the oral argument that upon the hearing of defendant's objections to the master's report of the sale under the decree of August, 1916, the defendant's bill for injunction and relief exhibited against the State Bank appellee in this case and referred to in the objections to the master's report was read. The chancellor by a special order directed the clerk of the circuit court for Duval county to transmit to this court the said bill of complaint, exhibited by Etter and others against the bank for injunction and relief, the order indorsed upon the original bill, and the amended bill.

In the conclusion at which we have arrived we have considered the bill for injunction and relief in connection with the defendant Etter's objections to the master's report. As the situation appears to us, the appellant, Etter, is protesting against the entry of a deficiency judgment against him in this cause, because he says that the title to a part of the property mortgaged by him to the bank is defective that the property was obtained by him from the bank through its president, that the mortgage was given to secure the purchase money, that one of the lots was incorrectly described, that Etter went into possession of one of the lots conveyed, and into possession of a lot which he supposed was covered by the description which is now claimed to be erroneous; that in 1910 Etter attempted to convey the lots to Mattair and executed a deed to him; that in 1915 the bank filed its bill against Etter to foreclose the mortgage; that the property was sold under a decree of the court in April, 1916, and Etter became the purchaser, after which he discovered the error in the description of one of the lots acquired by him from the bank through its president and failed to comply with the terms of sale; that the land described in that conveyance is occupied by strangers, except a small part of it, and is not the property of...