Federal Land Bank of Columbia v. Godwin
| Decision Date | 07 August 1931 |
| Citation | 136 So. 513,107 Fla. 537 |
| Parties | FEDERAL LAND BANK OF COLUMBIA v. GODWIN et al. |
| Court | Florida Supreme Court |
Commissioners' Decision.
Suit by the Federal Land Bank of Columbia against Bertha Godwin and others. From an order sustaining a demurrer to the bill complainant appeals.
Order reversed, and cause remanded.
Syllabus by the Court.
A general demurrer addressed to the entire bill of complaint should be overruled, if there is any equity in the allegations of the bill.
A demurrer to a pleading admits the truth of all essential matters of fact as are well and sufficiently pleaded.
A mere change of securities of equal dignity for a debt is not a novation of that debt or a payment or release thereof per se.
A second mortgage or deed of trust on the same property does not alone discharge the lien of the first. Whether the taking of the second mortgage amounts to an extinguishment of the first mortgage is one of intention between the parties.
A new mortgage in renewal of an old one takes precedence to the extent of the old mortgage debt over an intervening lien upon the property covered by the mortgage.
Where one is under no obligation to pay a note secured by a first mortgage on property, there can be no legal subrogation of such party to the rights of the holder of the first note and mortgage.
Conventional subrogation depends upon a lawful contract and occurs where one having no interest in or relation to the matter pays the debt of another, and by agreement is entitled to the securities and rights of the creditor so paid.
Where a party is under no duty legal or otherwise to pay a first mortgage debt, and has no interest in the property, loans money that is used to pay off such first mortgage, and takes a mortgage on the same or other property, with no agreement that the security of the first mortgage shall be kept alive for his benefit, the lender does not thereby become a conventional subrogee to the rights of the holder of the first mortgage.
When a first mortgage lien existing against real estate is paid off and the lien discharged, the lien of a second mortgage thereon becomes at once, by operation of law, a first lien on the property; and this first lien, and the right to enforce it as such, are vested rights. Appeal from Circuit Court, Taylor County; Hal W. Adams, judge.
W.B.Davis of Perry, for appellant.
L.W.Blanton of Perry, for appellees.
This case is here for the purpose of having a review of an order sustaining demurrer to a bill for the foreclosure of a mortgage.
The bill of complaint, among other things, alleges in substance and effect that on the 13th day of July, 1926, W. B. Godwin and wife executed a mortgage upon certain lands in Taylor county to the First National Bank of Perry, to secure the sum of $1,200; that on the 6th day of September, 1926, the said Godwin and wife purchased a tract of land and borrowed from G. G. Alderman the sum of $1,100 to pay for said land and for making improvements thereon, and gave to Alderman a mortgage which covered, with the exception of one 'forty,' the land embraced in the mortgage to the bank; that on the 30th day of December, 1927, the said Godwin and wife executed a mortgage to the said bank upon the same lands to secure the payment of $1,631 in the renewal, as it is alleged, of the mortgage dated September 6, 1926; that on the 28th of August, 1928, the said Goodwin and wife executed to complainant, the Federal Land Bank of Columbia, their mortgage to secure the payment of $1,600, and interest thereon to be paid on an amortization plan in 35 annual installments, with a provision therein for accelerating the maturity of deferred payments upon default being made by the mortgagors in making the payment of any installment of principal or interest; that, prior to securing the loan from complainant, the said Godwin delivered to complainant a written application of himself and wife for a loan for the following purposes:
'Two hundred dollars to repair houses; two hundred dollars to buy wire fencing; one thousand, five hundred dollars to pay mortgage to the First National Bank; one hundred dollars to pay for stock in National Farm Loan Association.'
That the mortgage to the said bank 'was all the incumbrances, all the mortgages, all liens against the land offered for security and also all accounts or amounts due on account of purchase money, notes or contracts covering purchase of said land; that it was the desire and proper intention of your orator to secure and obtain from the said W. B. Godwin all the interest and all the right, title, claim or otherwise that the said W. B. Godwin had in or to the said land or any part thereof, and that your orator took the mortgage aforesaid on the land above described from the said Warren or W. B. Godwin for the purpose of securing the said interest, the said right, the said title, the said claim of the said W. B. Godwin and of all other persons, that a copy of the instrument executed by the said W. B. Godwin is hereto attached and marked as your orator's exhibit 5, and prayed to be taken and considered as this your orator's bill of complaint.'
That, though the mortgage to the said Alderman was recorded, it was not shown on an abstract that was 'made and executed to the complainant'; that the said sum of $1,600 was not delivered by the complainant to Godwin, but was turned over to the agent of complainant for him to pay said bank so much of it as was due the said bank by the said Godwin; that the said sum of $1,600 was paid to the said bank, it being approximately sufficient to pay all that was due said bank by the said Godwin, 'for the purpose of obtaining and securing' from said bank the mortgage that was then held by it in order for complainant's mortgage to become a first lien on the land; that the said Godwin had defaulted in his payments, and that complainant had exercised its option to declare the entire amount due and payable; that the mortgages to said First National Bank of Perry have not been canceled of record; that the mortgage to Alderman has been paid as complainant is advised and believes, but that, if it has not been paid, the complainant has been subrogated to the rights of said bank to the security held by it. Complainant prays for the foreclosure of its said mortgage, or, in the event the court finds it necessary that the complainant be subrogated to the rights of the said First National Bank of Perry, that the mortgage of July 13, 1926, to the First National Bank of Perry be foreclosed. To the bill of complaint is attached as a part thereof of copy of the application made by the said Godwin to the complainant for a loan of $2,000 wherein he agrees to take a smaller amount as the complainant in its discretion may determine. In this application he lists the mortgage tot he First National Bank of Perry at $1,500. The defendant demurred to the whole bill.
It is an established rule here that a general demurrer addressed to the entire bill should be overruled if there is any equity in the allegations of the bill (Craft v. Craft, 74 Fla. 262, 76 So. 772; Downing v. Carlton, 76 Fla. 490, 80 So. 57; Leavine v. Belt Automobile Indemnity Association, 88 Fla. 553, 102 So. 768; also Stokes v. Victory Land Co., 99 Fla. 795, 128 So. 408, and cases there cited), and that such demurrer operates as an admission of all the allegations in the bill which are well pleaded. Reid v. Barry, 93 Fla. 849, 112 So. 846; Amos v. Gunn, 84 Fla. 285, 94 So. 615; Hotel Halcyon Corp. v. Miami Real Estate Co., 89 Fla. 156, 103 So. 403; Rawls v. City of Miami, 82 Fla. 65, 89 So. 351; Phifer v. Abbott, 73 Fla. 402, 74 So. 488; Holt v. DeLoach-Edwards Co., 56 Fla. 902, 48 So. 1039.
The bill in all essential requirements is sufficient as a basis for the foreclosure of the mortgage held by the complainant. If, on the coming in of an answer and the taking of testimony, it should appear that Alderman has an unsatisfied lien on the property superior to the lien of complainant, the contention of complainant that it should be subrogated to the rights and remedies of the First National Bank of Perry can be taken care of in the final decree.
The bill being not without equity, the order sustaining the demurrer thereto is hereby reversed.
Inasmuch as this cause will have to be remanded to the lower court for further proceedings, and the principal point of contention between the parties involves the right of the complainant, the Federal Land Bank, as subrogee, to foreclose the mortgage of July 13, 1926, to the First National Bank of Perry, it is appropriate for us to settle that controversy at this time.
We quote with approval from 19 R. C. L. 452, the following:
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