Lisbon Holding & Inv. Co. v. Village Apartments, Inc., 69--656

• Decision Date: 16 June 1970
• Docket Number: No. 69--656,69--656
• Citation: 237 So.2d 197
• Parties: LISBON HOLDING AND INVESTMENT CO., Ltd., a Bahamas corporation, and Leslie Carpenter, Appellants, v. VILLAGE APARTMENTS, INC., a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

Page 197

237 So.2d 197

LISBON HOLDING AND INVESTMENT CO., Ltd., a Bahamas corporation, and Leslie Carpenter, Appellants, v. VILLAGE APARTMENTS, INC., a Florida corporation, Appellee.

No. 69--656.

District Court of Appeal of Florida, Third District.

June 16, 1970.

Rehearing Denied Aug. 4, 1970.

Shutts & Bowen, and Herbert L. Nadeau, Miami, for appellants.

Tobias Simon, Miami, for appellee.

Before CHARLES CARROLL, HENDRY and SWANN, JJ.

PER CURIAM.

This is an appeal by the defendants below from a final judgment entered against them by the Circuit Court of Dade County in an action on a promissory note executed by defendant Lisbon Holding and Investment Co., Ltd., and endorsed by defendant, Leslie Carpenter, the chief stockholder of Lisbon. The note was given to the plaintiff as part of the purchase price of an apartment house in Brevard County and was secured by a second mortgage.

The defendants answered the complaint by denying all of the allegations except those in paragraphs one and two, and by alleging: (a) lack of consideration for the endorsement; and (b) partial failure of consideration. As a further defense it was alleged that the suit upon the note constituted an election not to foreclose the mortgage and that this action resulted in a waiver of the security, thereby discharging the endorser.

The trial court, after trial, entered judgment in favor of the plaintiff and against both the maker and endorser of the note. It is from this judgment that the defendants have appealed.

The appellant's first contention is that the trial court did not properly apply the law to the facts at bar. The appellant contends that when the holder of a promissory note, which is secured by a mortgage, elects to sue solely on the note, that action constitutes a discharge of the endorser of the note. We cannot agree with this contention. It is uniformly held that a mortgage lien is not extinguished until the mortgage debt is actually satisfied. In the event that a judgment is recovered because of an action on the promissory note (as opposed to a foreclosure action on the mortgage) such judgment does not affect the mortgage or its lien, and does not preclude a subsequent foreclosure action. For a general discussion of the above stated principle, see 37 Am.Jur. Mortgages § 523. Moreover, in the recent case of Klondike, Inc. v. Blair, Fla.App.1968, 211 So.2d 41, the appellant had filed its complaint in the trial court to foreclose a mortgage upon which the appellee was obligated. At trial, the appellee plead that the appellant was barred because he had previously filed an action at law on the notes which were themselves secured by the mortgage, and moreover, that he had obtained a judgment in that action. The lower court granted the appellee's motion for summary judgment. On appeal, the decision was reversed and the District Court of Appeal stated as follows:

'In this case there was no satisfaction of the judgment obtained on the note; no execution was issued and no payment thereon. Thus, the question resolves itself down to whether or not the remedies of suit on the note and foreclosure of the mortgage are inconsistent. If they are, plaintiff (appellant) would be barred from now seeking foreclosure of the mortgage; if they are not, then suing on the note without...