Phipps v. Watson

• Decision Date: 03 March 1933
• Citation: 108 Fla. 547,147 So. 234
• Parties: PHIPPS et al. v. WATSON.
• Court: Florida Supreme Court

147 So. 234

108 Fla. 547

PHIPPS et al. v. WATSON.

Florida Supreme Court

March 3, 1933

Rehearing Denied April 5, 1933.

En Banc.

Suit by Frank G. Watson, as executor of, and sole devisee under, the last will and testament of Jennie F. Watson, deceased against John S. Phipps and others. From an order overruling a general and special demurrer to the bill of complaint defendants appeal.

Affirmed. Appeal from Circuit Court, Palm Beach County C. E. Chillingworth, judge.

COUNSEL

Loftin Stokes & Calkins, of Miami, for appellants.

Crawford & May, of Jacksonville, for appellee.

OPINION

TERRELL Justice.

On three previous occasions different phases of this case have reached us for adjudication. Quinn v. Phipps, 93 Fla. 805, 113 So. 419, 54 A. L. R. 1173, Watson v. Phipps, 99 Fla. 568, 126 So. 778, and Phipps v. Quinn, 99 Fla. 1340, 128 So. 849. The record in all three cases is made a part of the record in this appeal which emanates from a suit to foreclose a vendor's lien arising from a mortgage executed by Quinn to Mrs. Watson covering the identical lands involved in the three appeals enumerated.

The mortgage executed by Quinn to Mrs. Watson was held to be null and void in Quinn v. Phipps, supra, as to the former on the theory that, when Quinn purchased the lands from Mrs. Watson on which the mortgage was executed, he was acting as the agent of Phipps and that consequently the transaction should have been consummated in the name of Phipps. The purpose of Quinn v. Phipps was to have Phipps decreed to be the owner of the lands described in the mortgage; that Quinn took them in trust for Phipps; and that Mrs. Watson be required to convey them to Phipps on his complying with the option agreement made between her (Mrs. Watson) and Quinn.

Quinn v. Phipps was instituted in the circuit court in April, 1922. In May following Mrs. Watson made the conveyance to Quinn as per terms of the option agreement, and Quinn in turn executed the mortgage to Mrs. Watson. In March, 1923, Phipps deposited $50,000 in the registry of the court to insure payment for the lands and in August, 1924, a final decree in the circuit court was entered in favor of Phipps. That decree was affirmed by this court in April, 1927, but in March previous the Farmers' Bank & Trust Company in which Phipps deposited the $50,000 was closed and Mrs. Watson died prior to the affirmance of the final decree. In April, 1927, Phipps deposited an additional $50,000 in the registry of the court.

In August, 1927, Phipps v. Quinn, supra, was instituted, seeking to recover from the clerk of the court the second $50,000 paid into the registry of the court, on the theory that it was paid on the advice of counsel, but that he later found that it was not necessary to protect his interest. The clerk and Phipps' attorneys, having been made parties defendants, replied to the rule to show cause setting up the facts of the deposit. Phipps moved to strike these replies but his motion was denied and on appeal to this court the cause was dismissed.

In September, 1927, Watson v. Phipps, supra, was instituted for the purpose of rescinding the deed from Mrs. Watson to Quinn. A demurrer to the bill was sustained and the cause was dismissed. Appeal was prosecuted to this court and the decree below was affirmed in March, 1930.

The instant suit was begun in April, 1930. The ultimate question presented for our adjudication is whether Mrs. Watson or Phipps should suffer the loss of the $50,000 deposited by Phipps in the registry of the court to protect his interest in the lands involved in the three suits. It is brought here on appeal from an order of the chancellor overruling a general and a special demurrer to the bill of complaint brought by the executor of Mrs. Watson against Phipps et al.

Appellant contends that the deposit by Phipps in the registry of the court was substituted for the land to secure the mortgage, that it was sanctioned by law and its application adjudicated by the court in its final decree of August 6, 1924, and hence became a fund in court, the loss of which fell on the party (Mrs. Watson) decreed to be entitled to it. It is also contended by appellant that all the rights of the parties were determined by the final decree of August 6, 1924, and that the affirmance thereof by the Supreme Court related back thereto, that by force of the statute (section 4952, Comp. Gen. Laws 1927) said decree was to all intents and purposes a conveyance of the lands to Phipps and an extinguishment of the mortgage thereon which cannot now be enforced against Phipps because it was given by Quinn after filing the notice of lis pendens in a suit (Quinn v. Phipps, supra) to which the mortgagee was a party and which resulted in a decree holding that Quinn never had any title or interest in the land and that the deed by which Mrs. Watson conveyed it to Quinn was null and void.

As against the contention of appellant, appellee contends that the alleged deposit in the registry of the court was not followed up and made good by profert in curia; that it was in fact no deposit; that said deposit was not substituted for the land; that the final decree of August 6, 1924, had no such effect as that contended for by appellant; and that the statute (section 4952, Comp. Gen. Laws 1927) had no application to this case.

In our view it becomes unnecessary to discuss the general contentions of appellant or of appellee. The question of whether Phipps or Mrs. Watson should suffer the loss of the fund paid into registry of the court by Phipps must turn on the fact of whether or not it was paid in under order or sanction of the court or was recognized by the court to be a fund in custodia legis subject to protection and disbursement solely by order of the court.

The rule is well settled that, when a party litigant, pursuant to court order, pays into the registry of the court as an unconditional tender a sum of money which he contends is due by him to his adversary litigant in a cause pending between them, the title to the sum passes irrevocably to the adversary though he does not accept it until the conclusion of the litigation or at some other time. If subsequent to payment into court or recognition by the court the sum is lost or stolen, the loss must fall on the litigant to whom title passes or for whose benefit it was tendered. The tender in other words becomes a fund in custodia legis subject to the order of the court or the pleasure of the depositee. Agoure v. Peck, 17 Cal.App. 759, 121 P. 706; Hammer v. Kaufman, 39 Ill. 87; Reinhold v. Hansson, 169 Ill.App. 334, 336; People v. McGrath, 279 Ill. 550, 117 N.E. 74; In re Brofer Coal & Mining Company (C. C. A.) 4 F. (2d) 353; Mann v. Sprout, 185 N.Y. 109, 77 N.E. 1018, 5 L. R. A. (N. S.) 561, 7 Ann. Cas. note 97, citing many cases; Dickinson's Adm'r v. Helms, 29 Grat. (70 Va.) 462; Taylor v. Lancaster, 33 Grat. (74 Va.) 1; Gill v. Barbour, 80 Va. 11; 26 R. C. L. 656. The rule is also settled by those decisions that, if funds are paid into the registry of the court by a stranger or one having no right to do so and without the court's knowledge or sanction or in such a manner that they may be withdrawn or their disposition directed at the will of the depositor, they do not become funds in custodia legis, and, if lost under such circumstances, the loss must fall on the one making the deposit.

In either event the determining criterion to...