Gober v. Braddock

• Decision Date: 09 December 1930
• Citation: 131 So. 407,100 Fla. 1406
• Parties: GOBER v. BRADDOCK.
• Court: Florida Supreme Court

131 So. 407

100 Fla. 1406

GOBER v. BRADDOCK.

Florida Supreme Court

December 9, 1930

Commissioners' Decision.

Error to Circuit Court, Indian River County; Elwyn Thomas, Judge.

Action by F. E. Gober against W. C. Braddock, Jr. Judgment was entered overruling a demurrer to the plea of res judicata and plaintiff brings error.

Reversed and remanded, with directions.

COUNSEL Alto Adams, of Ft. Pierce, for plaintiff in error.

Vocelle & Mitchell, of Vero Beach, for defendant in error.

OPINION

DAVIS C.

In this case the plaintiff in error brought an action at law on certain notes which were secured by a mortgage which had been foreclosed and the property sold, and upon which sale the funds received from the property mortgaged had been insufficient to pay the said notes. The case is now here upon a writ of error to review a judgment entered overruling a demurrer to a plea of res judicata wherein it appears that the plaintiff had obtained a decree of foreclosure and sale of certain property that was mortgaged to secure the notes sued on, and that the court had denied a motion of the complainant for a deficiency decree for the balance due after applying the proceeds of the sale of the said property to the notes.

The question in the case is this: Where a complainant in a suit to foreclose a mortgage has been denied a deficiency decree has he a right under section 5751, Compiled General Laws of Florida 1927, to go into a court of law and obtain a judgment for any deficiency, after applying the proceeds of the sale of the mortgaged premises to the obligation secured by the mortgage?

Section 1 of chapter 11993, Acts of 1927 (section 5751, Compiled General Laws of Florida 1927), reads as follows:

'In all suits for the foreclosure of mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a deficiency, should one exist, shall be within the sound judicial discretion of the Court, but the Complainant shall also have the right to sue at common-law to recover such deficiency.'

This statute has been before this court upon a number of occasions, but in no case has the question under consideration been expressly ruled upon. Until the year 1919, there was no statute in this state authorizing the rendition of a personal decree or judgment in a foreclosure suit; but in 1873 the Supreme Court of Florida adopted rule 89 for the government of courts of equity, which rule was similar to rule 92 of the Supreme Court of the United States, and, as stated in Etter v. State Bank, 76 Fla. 203, 210, 79 So. 724, 726, 'under the rule adopted by the Supreme Court of this state, the power [to render a deficiency decree] has been constantly exercised by the courts of chancery.'

The purpose of the rule was to relieve parties to a foreclosure suit from the expense and vexation of two suits, one equitable and the other legal. Fagan v. Robbins, 96 Fla. 91, 117 So. 863, 868.

Until the adoption of equity rule 89, chancellors had no authority to enter deficiency decrees. Under the rule, the chancellor was empowered, but not required, to enter a deficiency decree. The exercise of this power rested in the sound judicial discretion of the court. Fagan v. Robbins, supra; Snell v. Richardson, 67 Fla. 386, 65 So. 592; Etter v. State Bank, supra; Realty Mortgage Co. v. Moore, 80 Fla. 2, 85 So. 155, 156.

Chapter 7839, Acts of 1919, apparently was intended in part to change the rule and to mandatorily require chancellors to enter deficiency decrees, but this court held that:

'To hold the act as being mandatory would require us to determine that the Legislature has attempted to coerce the judicial action of the courts and that in so doing it has invaded the province of the courts and passed an invalid act.' Fagan v. Robbins, supra.

The act was held to be valid upon the theory that it was directory and permissive, its purpose being to cover other liens besides mortgage liens and to authorize the entry of deficiency decrees against other obligors than the makers of the mortgage. Fagan v. Robbins, supra; Chase v. Sullivan (Fla.) 126 So. 359.

Chapter 7839, Laws of Florida 1919, was expressly repealed by chapter 12325, Laws of Florida 1927, page 1263, which repealing act went into effect on June 6, 1927. But, prior to the repeal of chapter 7839, Laws of Florida 1919, the Legislature enacted chapter 11993, Laws of Florida 1927, page 536 (section 5751, Compiled General Laws of Florida 1927), the same going into effect on May 7, 1927. Chapter 11993, Laws of Florida 1927, became a law prior to the rendition of the decision in Fagan v. Robbins, supra, and was, in the light of that decision, no more than a declaration of what the law had been since the adoption of rule 89, unless the law was changed by the last clause of section 1 of the act which reads as follows: 'But the Complainant shall also have the right to sue at common-law to recover such deficiency.' See authorities, supra.

As to the language last quoted from chapter 11993, Laws of Florida 1927, this court in Voorhis v. Crutcher, 98 Fla. 259, 123 So. 742, 743, said: It 'is at best only a restatement of the common-law and the law obtaining in this state prior to that enactment.'

In Webber v. Blanc, 39 Fla. 224, 22 So. 655, 656, we find that:

'The fact that a mortgage was taken to secure the note did not deprive the holder thereof of the legal remedy to collect it, nor is there any legal obstacle in the way of his suing at law for the balance due on the note after the sale under the foreclosure decree in equity, if no judgment for the deficiency was entered in such proceedings. * * *

'While a deficiency decree may be rendered in the foreclosure suit in equity, still, if none is asked for, and none is entered, the remedy at law for the balance remains, and resort to it may be had.'

In E. J. Sparks Enterprises, Inc., v. Christman, 95 Fla. 928, 936, 117 So. 388, 391, the court says:

'Under a proper construction, as we see it, the enactment of chapter 11993 [section 5751, Compiled General Laws of Florida 1927] was not intended to take away the right to enforce a debt secured by a mortgage by an action at law, nor to deprive the creditor of the right to enforce a deficiency after foreclosure in an action at law.'

But it may be said that it does not necessarily follow from the two decisions last cited that, when a deficiency decree is specifically denied, the complainant has a right to sue at law for any deficiency after applying the proceeds of the sale to a foreclosure decree. That is true, but those decisions point that way. When we consider that the failure of a court to make and enter a deficiency decree in a foreclosure where the proceeds of a sale of the property are not sufficient to satisfy the lien is an implied denial of such decree, and that under such circumstances the complainant has the right to sue at law for the deficiency (see authorities, supra), we fail to be impressed with the argument that suit cannot be maintained at law upon the debt ascertained beyond dispute, where there has been an express denial of the right to a deficiency decree upon foreclosure of the mortgage securing such debt.

Chapter 11993, § 1, Laws of Florida 1927 (section 5751, Compiled General Laws of Florida 1927), says that the 'entry [not denial] of a deficiency decree * * * shall be within the sound judicial discretion of the court'; but, if we should concede that the power to deny is thereby implied, the Legislature certainly did not say that the holder ...