Jones v. Carpenter

• Decision Date: 24 October 1925
• Citation: 90 Fla. 407,106 So. 127
• Parties: JONES v. CARPENTER.
• Court: Florida Supreme Court

106 So. 127

90 Fla. 407

JONES v. CARPENTER.

Florida Supreme Court, Division A.

October 24, 1925

Suit by Morgan F. Jones, as trustee in bankruptcy of the Jacksonville Bread Company, bankrupt, against J. Weller Carpenter to establish and enforce a lien on certain property. From a final decree dismissing the bill of complaint, complainant appeals.

Reversed.

Syllabus by the Court

SYLLABUS

Equitable liens are necessary on account of absence of similar remedies at lw. The doctrine of equitable liens would never have come into existence if it were true that one who claims such a lien must first show a lien at law. Equitable liens become necessary on account of the absence of similar remedies at law.

Doctrine of equitable liens is a wide application in administering rights and remedies peculiar to equity jurisprudence. The doctrine of equitable liens is one of great importance and of wide application in administering the rights and remedies peculiar to equity jurisprudence, and there is perhaps no doctrine which more strikingly shows the difference between the legal and the equitable conceptions of the judicial results which flow from the dealings of men with each other from their express or implied undertakings.

Doctrine of equitable liens follows doctrine of subrogation; maxim 'Equality is equity,' applies to equitable liens. The doctrine of equitable liens follows the doctrine of subrogation. They both come under the maxim, 'Equality is equity,' and are applied only in cases where the law fails to give relief and justice would suffer without them.

Equitable lien exists independently of any express agreement vendor's lien included in equitable liens. An equitable lien exists independently of any express agreement, and equity enforces it on the principle that a person having gotten an estate of another ought not in conscience to keep it as between them. Included in this case of liens is the vendor's lien.

Sources from which equitable liens arise stated. Equitable liens arise from two sources, viz.: (1) A written contract which shows an intention to charge some particular property with a debt or obligation; (2) is declared by a court of equity out of general consideration of right and justice as applied to the relations of the parties and the circumstances of their dealings in the particular cases.

Equitable liens arise in case of expenditures by one joint owner of real or other property, or where one innocently and in good faith makes improvements on another's property. Equitable liens are necessarily based on the doctrine of estoppel, and usually arise in cases of expenditures by one joint owner on real and other property, or in case where a party innocently and in good faith makes improvements on the property of another. These are by no means the only instances in which they may arise.

Homestead provisions should be liberally construed, but not made instrument of fraud or imposition on creditors. The organic and statutory provisions relating to homestead exemptions should be liberally construed in the interest of the family home, but they should not be applied so as to make them an instrument of fraud or imposition upon creditors.

Homestead not exempt from sale to satisfy claims for labor and improvements on house claimed as homestead. Funds spent for labor and improvements on the house occupied and claimed by one as his home are clearly within the qualifications to the homestead as defined in section 1 of article 10, of our Constitution, and the homestead is not exempt from sale to satisfy claims for such labor and improvements.

Judgment founded on contract for money lent not enforceable against homestead; employee taking employer's funds and using them for labor and material to make improvement on homestead subjects home to payment or restoration of funds. A judgment grounded on contract for money loaned is not enforceable against one's homestead, but when a trusted employee while acting in a fiduciary capacity, without the knowledge or consent of his employer, take his (employer's) funds and converts said funds into labor and material to make substantial improvements on his (employee's) home, such home may be subjected to the payment or restoration of said funds.

Homestead cannot be alienated except as law directs; homestead cannot be employed as shield and defense after fraudulently imposing on others. A homestead in this country is for the benefit of the family, where it can be sheltered and live beyond the reach of financial reverses. It cannot be alienated except as the law directs, and when the parties are sui juris and dealing at arm's length it is notice to the world of all these facts and more, but it cannot be employed as a shield and defense after fraudulently imposing on others.

Appeal from Circuit Court, Duval County; George Couper Gibbs, judge.

COUNSEL

Frank E. Jennings and Marks, Marks & Holt, all of Jacksonville, for appellant.

C. M. Cooper and Chas. P. & J. J. G. Cooper, all of Jacksonville, for appellee.

OPINION

TERRELL J.

In February, 1919, J. Weller Carpenter, appellee here, entered into contract to purchase a certain house and lot in Jacksonville, Fla., making specified payments thereon, and he immediately entered into possession thereof by occupying the house with his family.

Said appellee Carpenter was president of the Jacksonville Bread Company, a corporation under the laws of this state, which was on July 5, 1921, adjudged to be a bankrupt; petition in bankruptcy having been filed against it December 27, 1920. At a meeting of the creditors of said Jacksonville Bread Company held October 1, 1921, appellant, Morgan F. Jones, was appointed trustee in bankruptcy.

Carpenter drew a salary of $10,000 per annum as president of the bread company, was one of its directors, and exercised the authority of drawing checks for and disbursing the funds of the corporation. It is admitted by Carpenter that his full salary for the year 1920 was paid by the company, and that he was entitled to receive no other funds whatever from the corporation for that year.

Notwithstanding Carpenter's full salary for the year 1920 was paid and he had no further claims against the bread company, in October and November of that year he as president checked out of and drew from the funds and assets of said company $160.59 to pay for paints, $205 to pay for labor, and $170.25 to pay for roofing and shingles, all of which paints, labor, roofing, and shingles were applied to the house purchased by appellee as already referred to in this opinion and constitute a valuable improvement to said house, which was and is the property of said Carpenter and was never claimed as an asset of the bread company.

It is shown that Carpenter has never paid to the bread company the foregoing amounts or any part thereof taken from its assets to pay for said valuable improvements to his property, that said amounts are long past due, that Carpenter is insolvent and unable to pay or return the same, that a judgment against him would be uncollectable, and that the liabilities of the said corporation far exceed its assets; and unless relief is given, the creditors of the corporation will be deprived of their assets so expended.

On the foregoing statement of facts appellant, representing the creditors of the said corporation, brought his bill in chancery praying that a lien be decreed in his favor upon the interest of said Carpenter in and to said property aforesaid, for the aggregate sum heretofore set out, that a decree may be entered requiring him, the said Carpenter, to pay the said sums to appellant within a time certain and that in default thereof the title and interest of said Carpenter in and to said property may be sold at a time and in a manner prescribed by the court.

Demurrer to the bill was overruled. Answer was filed admitting the essential allegations of the bill, but resisting the relief sought on the ground that the bread company did not furnish the labor or materials, and that they did not constitute a valuable improvement to the property, and that said property was the homestead of defendant below. On final hearing the chancellor found the equities to be in favor of defendant Carpenter and dismissed the bill of complaint.

Appeal is taken from the order dismissing the bill, and the sole question presented here for our determination may be stated as follows: Under the facts as above related, did appellant acquire an equitable lien in and to the property of appellee Carpenter that can be enforced against his (appellee's) claim for homestead exemption?

Appellant is not within any of the classes enumerated in sections 3496 and 3499 of the R. G. S. of Florida providing for statutory liens in certain cases, and in fact the parties who furnished the materials and performed the labor in question have been compensated out of the funds of the bread company, so any claim of appellant on the basis of a statutory lien, if there be such claim, is without merit; but the doctrine of equitable liens would never have come into existence if it were true that one who claims such a lien must first show a lien at law. Equitable liens become necessary...