Guaranty Title & Trust Co. v. Thompson

• Decision Date: 04 May 1927
• Citation: Guaranty Title & Trust Co. v. Thompson, 93 Fla. 983, 113 So. 117 (Fla. 1927)
• Parties: GUARANTY TITLE & TRUST CO. et al. v. THOMPSON et al. (two cases).
• Court: Florida Supreme Court

113 So. 117

93 Fla. 983

GUARANTY TITLE & TRUST CO. et al. v. THOMPSON et al.(two cases).

Florida Supreme Court, Division A.

May 4, 1927

Suits by S. B. Thompson and others against the Guaranty Title &amp Trust Company and others.From a final decree of foreclosure defendantGuaranty Title & Trust Company appeals, and from an order confirming a judicial sale of certain lands the Guaranty Title & Trust Company and J. B. Dicus appeal.Appeals considered together.Decree from which first appeal was taken affirmed.

Appeal from order confirming special master's report of the sale dismissed.

Syllabus by the Court

SYLLABUS

As between trust deed in nature of mortgage and materialmen's or laborers' liens, generally, lien first in time is first in right (Rev. Gen. St. 1920, § 3495).As between a trust deed in the nature of a mortgage and statutory liens of materialmen or laborers which may attach to the premises, the general rule of priority is that the lien which is first in time is first in right.

Lien of materialmen or laborers of which no notice has been recorded in public records may be superior in time and right to that of recorded mortgage (Rev. Gen. St. 1920, § 3495).The statutory lien of materialmen or laborers in many cases attaches prior to, or even without, a recordation of the statutory notice thereof in the public records, so that the statutory lien of a materialman or laborer of which no notice has been recorded in the public records may be superior both in time and right to that of a recorded mortgage.

Generally lien of trust deed in nature of mortgage obtains priority over materialman's or laborer's lien as of time of filing for record or actual notice (Rev. Gen. St. 1920, § 3495).Ordinarily, as between a trust deed in the nature of a mortgage and the statutory lien of a materialman or laborer the lien of such trust deed attaches and attains priority as of the time it is filed for record in accordance with the statute, or actual notice thereof given to prospective claimants of such statutory liens.

Before trust deed in nature of mortgage is lien as against other lienors without notice, debt which it secures must be existent.At least as against other lienors without notice, before a trust deed in the nature of a mortgage can become effective as a lien, it is essential that the debt or obligation the payment of which is secured by such trust deed shall have come into existence between the parties either by the negotiation of some, though not necessarily all, the bonds thereby secured, or otherwise.

Generally, mortgage, consideration of which is subsequently paid to mortgagor, is potential lien for full amount mortgagee is obligated to advance; mortgage, consideration of which is later paid to mortgagor, takes priority as lien from date of its record for full amount of indebtedness in good faith secured, not exceeding maximum amount mortgagee must advance.In respect to mortgages executed to secure future advances and mortgages executed to secure the payment of a loan or other indebtedness created prior to or contemporaneously with the execution of the mortgage, the consideration for which mortgage, by agreement of the parties, is temporarily retained by the mortgagee but subsequently disbursed or paid over to the mortgagor, the general rule is that such mortgages are potential liens for the full amount the mortgagee is obligated to advance under the terms thereof, and such a mortgage takes priority as a lien from the date of its record, and not from the date of the disbursements by the mortgagee to the mortgagor, for the full amount of the indebtedness actually and in good faith incurred under and secured by the mortgage, not exceeding, however, the maximum amount the mortgagee is obligated to advance thereunder.

That debt secured by trust deed came into existence subsequent to acquisition of materialman's or laborer's lien held to give latter preference.When it is established by the evidence that although a trust deed in the nature of a mortgage was duly executed and recorded, the recited purpose of which was to secure the payment of a series of bonds therein described, the debt to be secured thereby did not, in fact, come into existence between the parties prior to the due acquisition of a statutory materialman's or laborer's lien on the lands in question, the ostensible lien of such trust deed cannot prevail over the duly acquired statutory lien, even though such statutory lien attached subsequent to the filing for record of the trust deed.

Purchaser at master's sale, to whom deed was executed, is necessary party to proceeding to vacate order of confirmation, including appeal.The purchaser at a master's sale of real estate, to whom a deed has been executed and which sale has been confirmed, is a necessary party to any proceeding instituted to set aside or vacate the order of confirmation, and is a necessary party to an appeal taken in such proceeding.

Appeal from Circuit Court, Pinellas County; M. A. McMullen, judge.

COUNSEL

Brandon & Gage, of Clearwater, for appellants.

Guss Wilder, of Clearwater, for appellees.

OPINION

STRUM J.

This suit in equity was instituted by the appelleesS. B. Thompson et al., as complainants below, to foreclose a statutory lien for materials furnished in the construction of a building upon described lands alleged to be owned by Joel B. Paine.The suit is brought pursuant to section 3495 et seq.,Rev. Gen. Stats. 1920.Besides the allegations of the amended bill of complaint pertaining to the lien claimed by the complainants, it is further alleged therein that divers other persons, all of whom are joined as defendants below, claim other statutory liens upon said lands for labor performed or materials furnished in the construction thereon of said building, all of which liens, as well as a mortgage lien claimed by People's Bank of Clearwater, another defendant, are alleged to be subordinate to complainants' lien.The Guaranty Title & Trust Company, a corporation, was also made a partydefendant to the amended bill of complaint, with respect to which defendant the following allegations appear in the amended bill:

'That there appears in Mortgage Record 40, page 101, Public Records of Pinellas county, Fla., a certain mortgage or trust deed given by said defendantsJoel B. Paine and Henrietta D. Paine, his wife, to the defendantGuaranty Title & Trust Company, dated November 1, 1921, and filed for record November 1, 1921, given to secure an issue of bonds aggregating $20,000.

'Upon information and belief, your orators say that said Guaranty Title & Trust Company and the persons who purchased such of the bonds as have been sold, to wit, $15,000, took the same with the notice and knowledge of the existence of your orators' lien hereby sought to be foreclosed.

'Your orators further show and represent unto your honor that, at the time of the making and execution of said trust deed, the said Sunset Point Tavern (the building hereinabove referred to) was in the course of construction and was not completed until more than three months thereafter.'

The amended bill also contains allegations concerning another purported trust deed between the same parties, dated September 26, 1921, and recorded on April 3, 1922, in Mortgage Record 40, page 135, of the Public Records of Pinellas county, which latter trust deed, it is alleged, 'was given by the grantors therein named to the grantee therein named for the purpose of examination only, and that the same was not satisfactory, whereupon the said Joel B. Paine, the grantor in both trust deeds and the owner of the lands in question, made and executed the trust deed first referred to, recorded in Mortgage Record 40, at page 101, Public Records of Pinellas county, but that thereafter the trust deed appearing of record in Mortgage Record 40, page 135, being the one first executed, but which was alleged to have been found unsatisfactory, was recorded by one of the defendants'without authority from the grantors therein (in the trust deed) named, and that the same is, in fact, a nullity.'The answer and supplemental answer of the defendantGuaranty Title & Trust Company deny all the material allegations of the amended bill, except the allegation as to the ownership of the land and the allegations above quoted with respect to the execution to said defendant, as the trustee, of the trust deed first above mentioned, recorded in Mortgage Record 40, page 101.The obligations which the trust deeds purport to secure do not appear to be purchase-money obligations.

In due course a final decree was rendered in favor of the complainants and other lien claimants, fixing the priorities between them, and decreeing the payment to them of the sums found to be due them on account of their respective liens, in default of which it was further decreed that the premises be sold to satisfy said liens.

By the final decree, it was further found and decreed:

'That the defendantGuaranty Title & Trust Company, a corporation, either as trustee or otherwise, has not established by the evidence in this cause any claim against the property embraced in this suit.'

A petition for rehearing having been denied, the defendantGuaranty Title & Trust Company, 'for and in behalf of itself and of' all other defendants below, naming them, appealed from the final decree of foreclosure.This appeal is case No. 526, Division A, in this court.

The sums found to be due to the divers lien claimants not having been paid, and no supersedeas having been perfected under the appeal from the final decree, a special master appointed by the court thereafter, and after notice proceeded to sell the lands involved.The master reported that he had sold the same to one ...