Magill v. Sherman

• Decision Date: 04 November 1937
• Citation: 129 Fla. 797,176 So. 795
• Court: Florida Supreme Court
• Parties: MAGILL v. SHERMAN et al.

176 So. 795

129 Fla. 797

MAGILL v. SHERMAN et al.

Florida Supreme Court, Division B.

November 4, 1937

Suit by G. A. Sherman, a single woman, as trustee, and another against E. P. Magill, also known as Ted Magill, as successor-trustee. Decree for plaintiffs, and defendant appeals.

Affirmed. Appeal from Circuit Court, Dade County; Paul D Barns, Judge.

COUNSEL

W. F Parker, of Miami, for appellant.

Redfearn & Ferrell, of Miami, for appellees.

OPINION

CHAPMAN Justice.

The parties in this opinion will be referred to as they appeared in the court below as plaintiffs and defendants. On the 27th day of November, 1934, the plaintiffs filed in the circuit court of Dade county, Fla., their amended bill of complaint for the purpose of foreclosing a note and mortgage in the principal sum of $13,500 dated August 1, 1928, and given by the Marion Mortgage Company, a Florida corporation, to the Northern Investment Company, a corporation. The said mortgage encumbered lands situated in the city of Miami, Fla., upon which a hotel of approximately sixty-three rooms was erected or constructed during the year 1926. The title to the described lands at the time of the execution and delivery of the note and mortgage was in the Marion Mortgage Company, and on the 13th day of March, 1929, the title to the described lands by warranty deed was conveyed into the Trust Company of Florida, as trustee, subject, however, to the note and mortgage sought to be foreclosed.

The Northern Investment Company, on March 7, 1929, assigned, transferred, and set over the note, interest coupons, and the mortgage to George Allen, who, for value received, transferred, assigned, and set over to his said wife, Adolfina Lopez De Allen, an undivided one-half interest in the note and mortgage under date of December 19, 1932, and this suit is being maintained in the names of the true owners of the note and mortgage.

On the 26th day of November, 1931, the Trust Company of Florida, trustee, was declared insolvent by the Comptroller of the State of Florida, and J. H. Therrell appointed as liquidator, and upon his resignation M. A. Smith was duly appointed, M. A. Smith was removed as trustee, and E. P. Magill (Ted Magill) was appointed successor-trustee.

The amended bill is in approved form and sufficiently describes the interests of each party defendant and in law meets all requirements necessary to support a final decree. The amended bill prays for a final decree of foreclosure, sale of the property, allegations for the appointment of a receiver, and for an accounting.

E. P. Magill (Ted Magill), as successortrustee, filed an answer to the amended bill to foreclose in which he, among other things, charges that the Marion Mortgage Company was without authority to represent the beneficiaries under the trust; the Trust Company of Florida, as Trustee, was without authority to give to the Marion Mortgage Company power to act in its behalf; the deed from the Marion Mortgage Company to the Trust Company of Florida was insufficient to create a trust; that beneficial ownership certificates representing 94.8 per cent. of all bondholders was unauthorized. It is further stated in the answer that the Marion Mortgage Company's mortgage was void ab initio because the plaintiff was without authority in equity or in law to place a mortgage upon said property; it asserted that the plaintiff was not the owner of the note and mortgage sought to be foreclosed.

The plaintiffs filed a lengthy replication to the answer as set up by the successortrustee, in which they allege that the Marion Mortgage Company became the owner of the described land at a foreclosure sale on the part of the Trust Company of Florida, and refers to the entire pleadings in connection with said foreclosure.

It is not necessary to recite further the pleadings in behalf of either party to this suit for the purpose of reaching a conclusion.

An order of reference was made and all evidence taken before C. C. Youmans, special master, and his finding of facts and law as reported to the court below, among other things, contained the following:

'Findings.

'From the pleadings and evidence in this cause I find as follows:

'1. That the court has jurisdiction of the subject matter and of all of the parties to this cause.

'2. That the mortgage sought to be foreclosed and the note secured thereby are valid instruments in the hands of plaintiffs and that said mortgage constitutes a valid lien on the property described therein.

'3. That the placing of said mortgage was necessary and that the trust estate received the benefit of the full amount of said mortgage, and that the mortgage money was expended by the trustee in a reasonable manner and for purposes necessary for the protection and preservation and operation of the trust property.

'4. That while the note and mortgage are signed by Marion Mortgage Company and no reference is made in either of said instruments to show that it was acting in its capacity as trustee in the execution of said instruments yet the successor trustee by his answer makes Chancery Case #21874-D, which is the foreclosure of the original trust instrument a part of his answer by reference and by referring to said Chancery Case #21874-D and especially an additional motion for confirmation of sale, it is shown that the Marion Mortgage Company in bidding in the property and signing the note and the mortgage sued on in this cause was acting as trustee and for the benefit of the beneficiaries of the trust and I therefore find that the mortgage sought to be foreclosed in this action is binding upon the trust estate.

'5. That Walter Krouse by his answer claims to be the owner of certain personal property located in the hotel by Exhibit 'A' attached to said answer, and I find that said personal property should be decreed to be the property of the said Walter Krouse.

'6. That 94.8 percent of the bondholders accepted beneficial ownership certificates issued subject to the mortgage in question and thereby approved of said mortgage, and that 5.2 percent of the bondholders did not accept beneficial ownership certificates but never objected to said mortgage, and that all of the bondholders have acquiesced in said mortgage for about seven years, and are therefore estopped from contesting said mortgage and that the successor trustee holds under a deed given subject to said mortgage, and that the successor trustee is likewise estopped from denying the validity of said mortgage.

'7. That J. H. Therrell as Liquidator of the Trust Company of Florida as Trustee paid two interst installments on said mortgage and thereby approved said mortgage and acquiesced in the same, and that Ted Magill as successor trustee holds in the same right as that of J. H. Therrell as Liquidator.

'8. That there is due plaintiffs on account of said note and mortgage the principal sum of $13,500.00 together with interest at the rate of eight percent per annum from August 1, 1932, payable semiannually.

'9. That there is also due plaintiffs on account of said note and mortgage the sum of $1,500.00 solicitors fee, which I find from the evidence to be a reasonable sum to be allowed plaintiffs for their solicitors in this cause.

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