Kurkjian v. Fish Carburetor Corp., D-349

• Decision Date: 25 September 1962
• Docket Number: No. D-349,D-349
• Citation: 145 So.2d 523
• Parties: M. H. KURKJIAN, Edward G. Wise, Trustee, Sattenig Lee and William Lee, a partnership trading as Petrochem Company, Appellants, v. FISH CARBURETOR CORPORATION, Appellee.
• Court: Florida District Court of Appeals

Page 523

145 So.2d 523

M. H. KURKJIAN, Edward G. Wise, Trustee, Sattenig Lee and William Lee, a partnership trading as Petrochem Company, Appellants, v. FISH CARBURETOR CORPORATION, Appellee.

No. D-349.

District Court of Appeal of Florida, First District.

Sept. 25, 1962.

Raymond, Wilson & Karl, Daytona Beach, for appellants.

William A. Spence, Daytona Beach, for appellee.

RAWLS, Judge.

The plaintiffs, Kurkjian, et al., filed an interlocutory appeal from an order denying their motion for a deficiency decree.

Defendant, Fish Carburetor Corporation, executed a note in favor of plaintiffs, Kurkjian, et al., evidencing its indebtedness to them in the principal sum of $14,000, and secured payment of same by a mortgage on certain real property ¹ owned by defendant. Defendant defaulted in the performance of the terms of the note and mortgage, and plaintiffs brought this action to foreclose. When defendant failed to file any defenses, a decree pro confesso was properly entered against it upon motion of plaintiffs. Subsequently, the chancellor entered a summary final decree of foreclosure, finding therein that defendant was indebted to plaintiffs in the total sum of $15,099.81. Upon defendant's failure to forthwith pay said sum, the chancellor directed the Clerk of the Circuit Court to sell the mortgaged property pursuant to the provisions of § 702.02(5), F.S.1959, F.S.A. ² The mortgaged property was sold by the clerk at public sale to plaintiffs for the sum of $10,000; no objections to the sale were made by defendant; and the clerk issued certificate of title to plaintiffs. After receiving the certificate of title, plaintiffs moved that a deficiency decree be entered against defendant in the sum of $5,120.27, this being the difference between the amount found due by defendant in the final decree and the sale price of the property. The chancellor directed that notice be given to defendant prior to hearing plaintiffs' motion for deficiency decree. Defendant filed an unverified pleading entitled 'Objections to Entry of Deficiency Decree and Motion to Set Aside Foreclosure Sale,' the gist of such pleading containing affirmative allegations that plaintiffs were the only bidders at the sale and that the sale price was grossly inadequate. Plaintiffs then moved to strike defendant's pleading and the court took said motion under advisement. Several months later and prior to disposition of plaintiffs' motion to strike, defendant filed another unverified pleading entitled 'additional Objections to Entry of a Deficiency Decree' in which it affirmatively alleged that plaintiffs agreed not to seek a deficiency decree. Three days later, the chancellor entered an order denying the deficiency decree and denying the motion to strike. Material points on this interlocutory appeal are:

1. Does a decree pro confesso entered in foreclosure proceedings preclude the participation of defendant in a hearing on the question of a deficiency being entered against it?

2. After mortgage foreclosure sale held under the provisions of § 702.02, F.S., has become absolute by the clerk's execution and issuance of certificate of title, is the value of the mortgaged property conclusively established by the amount bid at the foreclosure sale so that it may not be questioned on plaintiffs' motion for the entry of a deficiency decree?

3. Does the record support the chancellor's refusal to enter a deficiency decree?

Plaintiffs cite Hirschberg v. Marvin ³ and Cole v. Heidt ⁴ as their primary authorities in support of their position that the chancellor erred in requiring notice to be given defendant prior to setting a hearing on the deficiency proceedings and in permitting defendant to participate in the deficiency proceedings without first vacating the decree pro confesso. Each of these cases concerned the requirement of notice being given as a matter of law prior to the entrance of a deficiency decree, it appearing that the cole case specifically overruled Hirschberg by holding that such notice is jurisdictional and must be given where a deficiency decree is not prayed for in the complaint. We recognize that in the instant cause a deficiency decree was prayed for in the complaint and concede that the chancellor may have proceeded without requiring notice to defendant. However, that is not the question presented, for it seems that plaintiffs' primary complaint is that too much notice was required by the chancellor, and that they have been prejudiced because, the chancellor in his discretion, refused to hear them on the question of deficiency until the defendant was apprised of what was taking place. It would be a sad commentary on the theory of equitable principles to sustain such a proposition. A decree pro confesso precludes a party from subsequently filing affirmative defenses as to the allegations established in the cause of action, and is analogous to some extent to a default judgment in a common law action. It is elementary that the entrance of a default does not preclude the defendant from appearing at the trial of the cause and defending on the question of damages where the action is not founded on a liquidated demand. ⁵ A final decree in a foreclosure action...