Pierson v. Bill

• Decision Date: 25 April 1939
• Citation: 189 So. 679,138 Fla. 104
• Parties: PIERSON v. BILL et al.
• Court: Florida Supreme Court

189 So. 679

138 Fla. 104

PIERSON v. BILL et al.

Florida Supreme Court

April 25, 1939

Rehearing Denied June 22, 1939.

Suit by the Union Trust Company against Suzanne Pierson, a feme sole to have a mortgage declared void, wherein the defendant filed a counterclaim. Nathan D. Bill was substituted for the Union Trust Company as party complainant. Decree for complainant and defendant appeals.

Affirmed.

WHITFIELD and BUFORD, JJ., dissenting. Appeal from Circuit Court, Palm Beach County C. E. Chillingworth, judge.

COUNSEL

A. Melrose Lamar, of Fort Valley, Ga., Paty, Warwick & Mooney, of West Palm Beach, and Petteway & Gwynn, of Tallahassee, for appellant.

Williamson, Cain & Baugher, of West Palm Beach, and L'Engle & Shands, of Jacksonville, for appellee.

Wm. H. Rogers, of Jacksonville, amicus curiae.

OPINION

TERRELL Chief Justice.

In December, 1933, Appellee Nathan D. Bill became interested in the purchase of lots 484, 486, 488, 490, and 492, Ponciana Park Second Addition to Palm Beach, Florida. He learned through D. F. Goodell and Robert E. McNeill, officers of Central Farmers Trust Company, and designated as his agents to negotiate the purchase, that said lots were owned by A. Madeleine Carey and that they were encumbered by a first mortgage in favor of Central Farmers Trust Company, a second mortgage in favor of Harry F. Shriver, besides numerous past due and unpaid municipal, county, and state tax liens, all amounting to approximately $35,000. Both mortgages and some of the tax liens were then in process of forclosure.

Mrs. Carey agreed to sell that lots including the appurtenances, subject to the first and second mortgages and the tax liens for $3,500, making a total consideration of $38,500. Bill placed his check for $39,000 in the hands of Goodell and McNeill with instructions to purchase the property and secure cancellation of the mortgages and tax liens. Bill did not want to be known in the transaction so McNeill purchased the lands from Mrs. Carey by deed executed in his name, dated January 2, 1934, and recorded two days later in the clerk's office in Palm Beach County. After he acquired title to the lots, McNeill discharged the two mortgages and the tax liens and on January 10, 1934, by special warranty deed conveyed them to Union Trust Company of Springfield, Massachusetts, which was acting as trustee for Bill in other matters. The latter deed was executed as directed by Bill and was duly recorded January 11, 1934.

On January 13, 1934, two days after the recordation of the deed from McNeill to Union Trust Company, there was filed for record in Palm Beach County a mortgage from Frederick Foster Carey to Suzanne Pierson, dated October 13, 1925, securing the payment of $24,000 and encumbering the same property described in the deed from McNeill to Union Trust Company. It will be observed that the latter mortgage was withheld from record eight years and three months from date of execution and was recorded two days after the deed from McNeill to Union Trust Company was recorded, neither McNeill nor Union Trust Company knowing anything of its existence.

In May, 1934, Union Trust Company commenced this suit by bill in equity in which Suzanne Pierson, the mortgagee in latter mortgage, was named defendant. The bill of complaint prayed that the mortgage from Frederick Foster Carey to defendant be decreed to be void as against Bill and his trustees, McNeill and Union Trust Company. Suzanne Pierson filed her answer, counterclaim, and motion to dismiss the bill of complaint. On the joint motion of Bill and Union Trust Company, Bill was substituted for Union Trust Company as the party complainant and an amended bill of complaint was permitted to be filed by him. The reason for this substitution of parties was that Bill was the real party in interest and that Union Trust Company had at all times acted as trustee for him.

The amended bill of complaint deraigned Bill's title from Frederick Foster Carey and proffered as defense to the Pierson mortgage his title acquired through McNeill and Union Trust Company, the resulting trust vested in McNeill and Union Trust Company in his favor, the long delayed filing and recording of the Pierson mortgage, and the status of Bill as an innocent purchaser for value and without notice. It prayed that the Pierson mortgage be decreed to be null and void as against Bill, that it be quieted as a cloud on his title and for relief not essential to recite.

The answer of Suzanne Pierson challenges the material allegations of the amended bill of complaint and contends that the resulting trust vested in McNeill and Union Trust Company in favor of Bill is invalid and unenforceable, that the deed from McNeill to Union Trust Company is void and that the title acquired by them through it is invalid because Union Trust Company was at the time a foreign corporation and has never qualified in this State and that McNeill and Bill are not innocent purchasers for value and without notice of the Pierson mortgage.

The counter claim of Suzanne Pierson prayed among other things that her mortgage be foreclosed against Bill, McNeill and Union Trust Company. Union Trust Company also filed an answer in which it admitted the allegations of the Bill of Complaint. We deem it unnecessary to refer to other pleadings and proceedings. On the issues thus made testimony was taken, and final decree was entered in favor of Bill, from which this appeal was prosecuted.

The essential facts involved in this case are not disputed. Only questions of law are presented. It is first contended that the deed from McNeill to Union Trust Company is void in its inception and the title conveyed thereby invalid because Union Trust Company was a foreign trust company and not qualified to do business in this State.

Sections 6026 and 6145, Compiled General Laws of 1927 define the duties of foreign corporations and trust companies with reference to qualifying to transact business in this State but both acts except from the duties so required the right to acquire, hold, and dispose of property on the part of such companies or corporations. Neither are they precluded from defending title to property held by them. It is not shown or contended that Union Trust Company did more than this. Brecht et al. v. Bur-Ne Co., 91 Fla. 345, 108, So. 173; Girard Trust Company v. Tampashores Development Co., 95 Fla. 1010, 117 So. 786; Ocean & Lake Realty Co. v. Cragin et al., 97 Fla. 452, 121 So. 460; Pape, Inc., v. Finch, 102 Fla. 425, 136 So. 496; Hogue v. D. N. Morrison Construction Co. of Virginia, 115 Fla. 293, 156 So. 377, 95 A.L.R. 357.

In this case, Union Trust Company being the foreign trust company in question is not the plaintiff and is not attempting to maintain the suit. The mere fact that McNeill executed the deed to it would not vitiate or adversely affect its title. It has done nothing that the law does not in clear terms warrant.

It is next contended that the resulting trust vested in Union Trust Company in favor of Bill cannot be proven by parol and if it could, it cannot be enforced in equity because it is not based on an instrument in writing.

In this case, Union Trust Company repeatedly admitted the resulting trust held by it in favor of Bill and McNeill has never denied it. This is sufficient affirmative proof of the trust involved here. It has little if any relation to the Pierson mortgage and it is not disclosed that Mrs. Pierson has any basis on which to question it but if she has, the proof by parol of the existence of and the enforcibility of such trusts has frequently been approved in this State. It is not essential that they be based on a written instrument. Dewhurst et al. v. Wright, 29 Fla. 223, 10 So. 682; Murrell v. Peterson, 59 Fla. 566, 52 So. 726; Lofton v. Sterrett, 23 Fla. 565, 2 So. 837; Booth v. Lenox, 45 Fla. 191, 34 So. 566; Sorrells v. McNally, 89 Fla. 457, 105 So. 106; Quinn v. Phipps, 93 Fla. 805, 113 So. 419, 54 A.L.R. 1173; Walker v. Landress, 111 Fla. 356, 149 So. 545.

The concluding and real question with which we are confronted being the one on which the Chancellor disposed of the cause is whether or not Bill acquired his title through McNeill and Union Trust Company as an innocent purchaser for value and without notice of the Pierson mortgage.

Bill contends that McNeill and Union Trust Company, his trustees, acquired the legal title to the lots in question as innocent purchasers for value and without notice actual or constructive of the Pierson mortgage which was recorded two days after the recordation of the deed from McNeill to Union Trust Company, it being at the time eight years and three months old. Bill acquired his equitable title through said trustees and invokes the protection afforded him by the recording statute, Section 5698, Compiled General Laws of 1927, as follows:

'No conveyance, transfer or mortgage of real property, or of any interest therein, nor any lease for a term of one year or longer, shall be good and effectual in law or equity against creditors or subsequent purchasers for a valuable consideration and without notice, unless the same be recorded according to law; nor shall any such instrument made or executed by virtue of any power of attorney be good or effectual in law or in equity against creditors or subsequent purchasers for a valuable consideration and without notice unless the power of attorney be recorded before the accruing of the right of such creditor or subsequent purchaser.'

This act has been the law of this State for more than one hundred years. It makes recordation according to law of any mortgage or deed a prerequisite to validity against creditors or subsequent purchasers for value unless they are shown to have had notice thereof from...