Hotel Management Co. v. Krickl

• Decision Date: 12 December 1934
• Citation: 158 So. 118,117 Fla. 626
• Parties: HOTEL MANAGEMENT CO. et al. v. KRICKL et ux.
• Court: Florida Supreme Court

158 So. 118

117 Fla. 626

HOTEL MANAGEMENT CO. et al. v. KRICKL et ux.

Florida Supreme Court

December 12, 1934

In Banc.

Suit by Charles A. Krickl and another against the Hotel Management Company and others. From an adverse order, the defendants appeal.

Affirmed. Appeal from Circuit Court, Dade County; H. F Atkinson, judge.

COUNSEL

Loftin, Stokes & Calkins, of Miami, for appellants.

Edward E. Fleming, of Miami, for appellees.

OPINION

DAVIS Chief Justice.

This is an interlocutory appeal from an order denying a motion interposed by two of the defendants below seeking dismissal of a second amended bill of complaint brought to foreclose a certain mortgage. The facts are as follows:

On April 1, 1924, T. W. Palmer and his wife executed and delivered to Charles W. Eaton ten promissory notes for $5,000 each, payable one a year for ten years, and a mortgage securing their payment incumbering a leasehold estate in certain land. Eaton died on July 8, 1925. Thereafter his duly qualified executors, pursuant to an order of the county judge of Dade county, Fla., indorsed the notes and assigned the mortgage to Lillian O. Eaton. She later married Charles A Krickl, who is joined with her in this suit. All except the last two notes have been paid.

On May 1, 1933, Charles A. Krickl and his wife filed a bill to foreclose the mortgage, making the appellants Enterprise Realty & Securities Corporation and Hotel Management Company parties defendant to the bill on an allegation that they claimed an interest in the land, the nature of which was unknown to the plaintiffs.

On May 11, 1933, the plaintiffs, without notice, obtained leave from the court to file an amendment to the bill of complaint, alleging that, because of the default in the payment of the note and interest falling due on April 1, 1933, and of the lack of payment within thirty days thereafter, the plaintiffs exercised the option contained in the mortgage to declare the balance of the debt due and payable. The appellants' appearance was filed on June 5, 1933, and on August 3, 1933, they filed motions to dismiss the bill and strike the amendments. These motions were granted. Plaintiffs filed an amended bill, a motion to dismiss it was granted, and plaintiffs filed a second amended bill. A motion to dismiss the second amended bill was overruled, and from that order the defendants, appellants here, appealed.

The mortgage sought to be foreclosed contained the following clause which appellees contend is an acceleration clause:

'7. If any sum of money herein referred to, or referred to in the notes or 99-year lease herein mentioned, or any of them, be not promptly and fully paid within thirty (30) days after same become due and payable, or if each and every stipulation, covenant, agreement and condition of said promissory notes, and this mortgage, and the said 99-year lease, or either of them are not duly, fully and completely performed, complied with or abided by, then, in any of such events the aggregate sum of money mentioned in the said notes as shall then be outstanding and unpaid, shall immediately without notice and demand, become due and payable to the same extent and in the same manner as though stipulated to be paid on that day, anything in the notes or herein contained to the contrary notwithstanding.'

Counsel for appellants, however, contend that the effect of the foregoing clause was to extend the time for payment of each note thirty days from the date thereof. But to so hold would mean that, if all of the notes except the last one had been paid, the mortgagee could not institute proceedings for its collection until thirty days after its due date on April 1, 1934, thereby making the clause serve as a hindrance rather than a benefit to the mortgagee in the premises, and incidentally changing the contract between the parties as evidenced by the language used in the notes.

The general rule is that, if there is a conflict between the terms of a note and mortgage, the note should prevail. 19 R. C. L. p. 493; Clark v. Paddock, 24 Idaho, 142, 132 P. 795, 46 L. R. A. (N. S.) 476 et seq. Effect should be given to both however, where there is no actual or necessary conflict. Here, it seems, there is in reality no conflict. The note was in default when it was not paid on April 1, 1933. So the mortgage was subject to foreclosure at any time thereafter for the collection of that note. Under the previously quoted clause, which we hold to be acceleration clause, the mortgagee could, after the lapse of thirty days from the day of default, elect to declare the remaining note due and institute proceedings by way of foreclosure for its collection.

The notes themselves provide for no grace period. Under section 6847, C. G. L. 1927, section 4761, R. G. S., they were payable on the due date named therein, without grace. On default in payment of any note, regardless of whether or not there was an acceleration clause permitting mortgagee to foreclose on the notes as yet not due, the mortgagee could foreclose the mortgage for the payment of that note. Land v. May, 73 Ark. 415, 84 S.W. 489; Pfeninghausen v. Shearer, 65 Mo.App. 348; Grattan v. Wiggins, 23 Cal. 16; Giles v. Lewis, 4 Del. Ch. 51; Boyer v. Chandler, 160 Ill. 394, 43 N.E. 803, 32 L. R. A. 113; Withrow v. Clerk, 2 Ind. 107; Adams v. Essex, 1 Bibb (Ky.) 149, 4 Am. Dec. 623; Central Trust Co. v. T. & St. L. Ry. Co. (C. C.) 23 F. 846; 19 R. C. L. p. 492; Curtis v. Cutler (C. C. A.) 76 F. 16, 37 L. R. A. 737, 40 U.S. App. 233.

The proposition that the mortgage could, on May 1, 1933, institute foreclosure proceedings on the note which fell due on April 1, 1933, is therefore correct.

This brings us to the question of the effect of the...