Grace v. Hendricks
| Citation | 140 So. 790,103 Fla. 1158 |
| Parties | GRACE v. HENDRICKS et al. |
| Decision Date | 11 January 1932 |
| Court | United States State Supreme Court of Florida |
Rehearing Denied April 20, 1932.
En Banc.
Suit by L. C. Hendricks and another against John P. Grace, to foreclose a mortgage. From an order denying motion of defendant to vacate a deficiency decree, defendant appeals.
Reversed and remanded, with directions.
On Petition for Rehearing. Appeal from Circuit Court, Broward County Vincent C. giblin, judge.
Loftin Stokes & Calkins, of Miami, and M. Rutledge Rivers, of Charleston, S. C., for appellant.
Baxter & Walton, of Ft. Lauderdale, for appellees.
The circuit court of the Fifteenth circuit, sitting as court of equity in Broward county, rendered a money decree against the appellant, John P. Grace, for $97,280.77. This was the amount of the mortgage debt involved in a foreclosure suit brought by the appellees for the foreclosure of a mortgage made by the appellant to the appellees. The appeal here is from an order of the chancellor refusing to vacate and set aside the money decree which had been entered against appellant on July 19, 1928.
The bill for foreclosure was filed April 5, 1927. John P. Grace Ella B. S. Grace, his wife, and the city of Ft. Lauderdale were named defendants. The bill of complaint was in the usual form applicable to foreclosure cases, and prayed for foreclosure against the appellants and the city of Ft. Lauderdale, of their interests in the real estate described in the bill and its attached mortgage. The interest of the municipality in this property was not particularly set up, but it was alleged that, whatever it was, it was inferior to the mortgage lien being foreclosed.
Various proceedings were had in the course of settling the pleadings. Demurrers to the bill were overruled, and the separate answer of the appellant was in part stricken. An answer was filed by the city of Ft. Lauderdale, to which exceptions were disallowed. Finally, testimony was taken in the case, and a final decree was entered finding that complainants were due the amount of $88,107.63 for their mortgage debt, together with an attorney's fee of $8,500. Sale of the mortgaged property described in the decree was ordered, but the sale was later stayed upon motion by the city of Ft. Lauderdale. Thereafter the city of Ft. Lauderdale was given permission to amend its answer, and amendment to the answer was filed pursuant to such permission. Thereupon complainant filed motion for vacation of the order staying the foreclosure sale, and for entry of a deficiency decree.
The last-mentioned motion of complainants set up that, following the entry of the final decree of foreclosure, the special master had advertised the property for sale on February 6, 1928; that prior to the sale, however, the court had made its order in favor of the city of Ft. Lauderdale ordering the sale to be stayed and permitting an amended answer to be filed; that thereafter, while the stay order was in full force and effect, and on May 14, 1928, the city of Ft. Lauderdale, in a separate condemnation proceeding brought by it against John p. Grace, the mortgagor, and L. C. Hendricks and J. V. Audet, the mortgagees, had obtained judgment appropriating to the city of Ft. Lauderdale, under the power of eminent domain, a portion of the premises described in the final decree of foreclosure and ordered to be sold to satisfy the complainant's debt; that from this condemnation proceeding the complainants in the foreclosure suit had received $3,000 to apply on the debt mentioned in the final decree of foreclosure; that, while the stay was in effect, a superior mortgage lien against a part of the premises involved in the final decree of foreclosure in this case was foreclosed in a separate suit, and the property sold under the final decree entered in such separate suit; that the property, as sold under the decree in such separate suit, only brought $20,000, which amount was insufficient to pay the superior mortgage therein foreclosed; that by reason of the condemnation suit in favor of the city of Ft. Lauderdale, and by reason of the foreclosure proceeding in favor of Dupuis-Blais Company to foreclose the aforementioned mortgage, which was senior to that of movants, that complainants' mortgage lien no longer existed in this case, because the mortgaged premises covered by it had been entirely exhausted by the other proceedings; that the amount defendant, John P. Grace, was still due the complainants totaled $96,211.75; that the court still had jurisdiction of said defendant, John P. Grace, because he had entered his personal appearance in the cause and pleaded to the merits therein; that, by reason thereof, the complainant prayed that the stay order against the foreclosure sale be set aside, and that a deficiency decree against John P. Grace be entered for the said sum of $96,211.75.
The paper so filed was styled a 'motion.' Pursuant to such 'motion,' the chancellor entered a so-called deficiency decree against John P. Grace in the sum of $97,280.77 damages, together with $40.58 costs. The date of this decree was July 19, 1928, and on March 21, 1929, appellant, the judgment debtor named in it, filed his motion to vacate it.
As grounds for the motion to vacate, appellant set up that he had no knowledge of the entry of the decree and was unrepresented at the time of hearing the application therefor; that no notice was served upon appellant of such application or motion, although notice was given to the attorneys who had appeared for appellant in preceding steps in the cause, but that such attorneys did not appear for, nor represent, the appellant in regard to the application for said deficiency judgment; that the so-called deficiency decree was void and entered by the chancellor without authority, because, at the time of its entry, there was of record in the cause the unrevoked stay order, which had been previously entered by the court staying the foreclosure sale on February 6, 1928.
Another ground of the appellant's objection was that a court of equity in a foreclosure case is without authority to enter a common-law judgment against the mortgagor for the total amount of the mortgage debt, until the mortgaged property has first been sold under the final decree of foreclosure and the amount of the deficiency ascertained thereby; that the mortgaged property could, and would have been, regularly sold on February 6, 1928, as advertised by the special master under the final decree, but that the stay order entered by the chancellor on motion of the city of Ft. Lauderdale had prevented that being done, and that the subsequent proceedings had made the sale of the mortgaged property under the final decree of foreclosure impossible.
It was further set up by the appellant that all the proceedings complained of leading up to the so-called deficiency decree had been taken while appellant was unrepresented in fact; also that what had been done had been done without any knowledge or notice to him in fact; that, in consequence of this, it was not until long after the decree for $97,321.35 was entered; that he actually learned of the fact of the entry of such decree; that the property upon which the mortgage had been foreclosed against the appellant had been recovered by the original owner for the paltry sum of $20,000 under the mortgage which was foreclosed as superior to the one on which the $97,321.35 deficiency decree was entered; and that the complainants themselves had obtained moneys from the condemnation proceedings by the city of Ft. Lauderdale, and other sources out of the property, aggregating more than $12,000. That, as a result, appellant was left with a judgment based on a second mortgage foreclosure, amounting to $97,321.35 against him, which judgment it would be inequitable and unjust to allow to be executed because it had been entered without notice, or proper basis in the record, and without an opportunity to oppose it.
The chancellor heard the appellant's petition and denied it on April 22, 1929. In his decree, the particular reasons for this denial were given by the chancellor, and were to the effect that the court was without jurisdiction to grant such motion, because the entry of the deficiency decree on July 19, 1928, precluded its being set aside by appellant's petition filed March 21, 1929; that, even if the deficiency decree was erroneously entered, it was without a proper basis in the record in the form of a supplemental bill to support it, that such defect was a mere error or irregularity of procedure, which would not subject the decree to collateral attack after the time for rehearing or appeal from it had expired. Following this, appellant's present appeal was taken.
As has been pointed out, the so-called deficiency decree was entered on July 19, 1928. Appellant's petition to vacate and set aside was not filed until March 21, 1929, which was more than six months later.
Sections 5752-5754, Comp. Gen. Laws 1927, read as follows:
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