Lambert v. Dracos

• Decision Date: 13 August 1981
• Docket Number: No. VV-77,VV-77
• Citation: 403 So.2d 481
• Parties: George W. LAMBERT, Jr., and Bill A. Corbin, Appellants, v. Theodore A. DRACOS, Appellee.
• Court: Florida District Court of Appeals

Page 481

403 So.2d 481

George W. LAMBERT, Jr., and Bill A. Corbin, Appellants, v. Theodore A. DRACOS, Appellee.

No. VV-77.

District Court of Appeal of Florida, First District.

Aug. 13, 1981.

Bill A. Corbin, Blountstown, for appellants.

Raymond L. Syfrett and Richard C. Trollope, Panama City, for appellee.

TILLMAN PEARSON, (Retired), Associate Judge.

The controlling question presented on this appeal is: May a mortgage foreclosure be maintained against one of two debtors who is a tenant in common with another without joining the second co-tenant who is also a co-obligor on the mortgage? We hold the co-tenants as co-obligors on the mortgage are indispensable parties and that it was prejudicial error to deny appellant/defendant's motion to dismiss on the ground of failure to join his co-tenant, co-obligor.

George and his wife, Clara Lambert, jointly executed a promissory note which was secured by a second mortgage on their jointly-held marital home. George and Clara were divorced and pursuant to the divorce decree, Clara was given the right to occupy the home with the children. The decree also required Clara to make payments on the first mortgage while it required George to make payments on the second mortgage. George experienced financial difficulties and the second mortgage came into default. He spoke with a bank officer of the bank that was the owner and holder of the second mortgage and was assured by the bank officer that he (the bank officer) would work with him insofar as his authority would permit. Thereafter Clara married Theodore A. Dracos. Because the bank was threatening foreclosure and in order to protect Clara's interest in the property, Mr. Dracos purchased the second mortgage from the bank by paying the balance due and taking an assignment of the note and mortgage. Dracos then brought the present mortgage foreclosure action. He named as defendants only George Lambert and one Bill A. Corbin. The complaint alleged that Mr. Corbin claimed some interest in the property and that his claim was subject to the second mortgage.

The defendants moved to dismiss the complaint on the grounds that plaintiff had failed to join an indispensable party, that is, Clara Lambert Dracos. The motion was denied. The cause came to issue upon defendant George Lambert's answer, which raised numerous affirmative defenses. After trial, George Lambert's interest in the mortgage property was sold at a judicial sale to Mr. Dracos for $100.00.

On this appeal, George Lambert and Bill A. Corbin present three points on appeal, only one of which we find has merit. First, George Lambert urges that the court committed error when it found that his affirmative defense of estoppel to declare an acceleration of the entire amount due was not proved. Our examination of the record convinces us that defendant, George Lambert, failed to prove an understanding or agreement with the bank, as owner and holder of the mortgage prior to assignment, not to accelerate or foreclose without further notice to him. The defense of estoppel to foreclose a mortgage requires a clear showing of action by the mortgagee which misleads the mortgagor so that he acts in a way that he would not have acted if he had known that the mortgagee would require performance under the strict terms of the mortgage agreement. See Flagler Center Building Loan Corp. v. Chemical Realty Corp., 363 So.2d 344 (Fla. 3d DCA 1978), cert. denied, 372 So.2d 467 (Fla.1979). The record shows no such action by the bank. The argument that the foreclosure was an unequitable scheme to defraud George Lambert fails for a similar reason. It was George Lambert's responsibility to make the mortgage payments and upon his failure, the purchase and foreclosure of the mortgage was a reasonable business practice by Mr. Dracos. Lambert's second point claiming procedural irregularities in the foreclosure sale is also without merit. However, we find merit to appellants' argument that the motion to dismiss for failure to join an indispensable party, i. e., Clara Lambert Dracos, should have been granted.

There is extensive authority in this state for the proposition that the owner of mortgaged property is an indispensable party to an action to foreclose a mortgage on that property. E. g., Berlack v. Halle, et ux., 22 Fla. 236 (1886); Oakland Properties Corp. v. Hogan, 96 Fla. 40, 117 So. 846 (1928); Davanzo v. Resolute Ins. Co., 346 So.2d 1227 (Fla. 3d DCA 1977). However, this authority is not so immutable when the holding in each case is examined.

Berlack v. Halle, supra, was an appeal of a final judgment in ejectment. The court stated that the owner of legal title is a necessary party to a suit for foreclosure of a mortgage. But the holding is that because of the defective foreclosure, the rights of the owner of the legal title and his assigns are unaffected. Because the appeal was not from a final decree of foreclosure, the court did not rule upon the effect on the rights of defendants who were made parties to the foreclosure.

Oakland Properties Corp. v. Hogan, supra, was an appeal from an order dismissing a complaint to reform a deed. The court stated that one who holds the legal title to mortgaged property is not only necessary, but is an indispensable party defendant in a suit to foreclose a mortgage. But the holding was that the foreclosure decree was void only as to that portion of the land owned by Oakland Properties Corporation which was not made a party to the foreclosure action.

In Davanzo v. Resolute Ins. Co., supra, the legal title holder appealed a final judgment of foreclosure of four of six mortgages on a certain property. The court stated:

One who holds legal title to mortgaged property is an indispensable party defendant in a suit to foreclose a mortgage and a court cannot properly adjudicate the matters involved in this suit when it appears...