Schechtman v. Grobbel, 68--414

• Decision Date: 13 August 1969
• Docket Number: No. 68--414,68--414
• Parties: Philip SCHECHTMAN and Rose Schechtman, Appellants, v. Gerard L. GROBBEL et ux., et al., Appellees.
• Court: Florida District Court of Appeals

Page 1

226 So.2d 1

Philip SCHECHTMAN and Rose Schechtman, Appellants, v. Gerard L. GROBBEL et ux., et al., Appellees.

No. 68--414.

District Court of Appeal of Florida, Second District.

Aug. 13, 1969.

Clyde H. Wilson, Jr., of Wilson & Wilson, Sarasota, for appellants.

A. Lamar Matthews, Jr., of Williams, Parker, Harrison, Dietz & Getzen, Sarasota, for appellees.

McNULTY, Judge.

Appellants brought suit to foreclose a purchase money mortgage executed by appellees-mortgagors. The entire dispute herein arose out of the provisions of a 'rider' attached to the standard mortgage form which was used by the parties. This 'rider' provided as follows:

'In order to provide an Escrow for the payment of County and City Taxes, mortgagors shall pay Together with and in addition to the regular monthly payment a sum equal to one-twelfth (1/12th) of Current annual taxes, which said Payment shall be based upon the amount of the previous year's taxes until the amount of the current tax can be ascertained at which time any necessary adjustments in the escrow figure shall be made; upon making payment of the said taxes, the official document, such as the tax receipt or said paper officially endorsed or certified, shall be placed in the hands of the said mortgagors within ten (10) days next after payment; and in the event that any taxes are not paid, satisfied and discharged, the said mortgagors may, at any time, pay the same or any part thereof, and the full amount of each and every such payment shall be immediately due and payable by the mortgagees, and shall bear interest from the date thereof until paid at the rate of ten percent (10%) per annum.' (Italics supplied)

The mortgage agreement was entered into in September of 1967 and mortgagors made all payments of principal, interest and escrow tax monies until December, 1967. Thereafter, until just prior to this suit in April, 1968, the mortgagors paid only the monthly principal and interest installments to appellants, and they paid the escrow tax monies into a special tax account which they opened in a Sarasota bank. Appellants objected to this arrangement and, after an abortive, compromise settlement of the matter, brought this suit to foreclose the mortgage. The trial judge entered a final summary judgment dismissing the foreclosure action with prejudice; denied appellant's prayer for attorney's fees; and ordered that future escrow tax monies be paid through the registry of the court unless 'by separate agreement, equal in dignity to the original mortgage', the parties make other arrangements. We affirm the denial of foreclosure, but reverse as to the remaining portions of the decree set forth above.

In denying the foreclosure, the trial judge predicated his conclusion on the theory that the provisions of the 'rider' to the mortgage created an ambiguity; and he resolved such ambiguity, as a matter of 'conscience', against a 'forfeiture or foreclosure'. His conscience was apparently persuaded by his specific findings that at no time were the principal and interest payments in default, and that at no time was the security under the mortgage in jeopardy. We think that the learned trial judge came to the proper conclusion in denying the foreclosure, but we would suggest somewhat different bases therefor.

First of all we think that the provisions of the 'rider' are not ambiguous. The obvious purpose of the 'rider' was to build up an escrow fund to the credit of the mortgagors for the fulfillment of their obligation to keep the security free of tax liens. ¹ The provisions thereof clearly require that such fund be built by monthly payments which are to be paid 'together with and in addition to' the regular monthly payments of principal and interest, which are, of course, payable to the mortgagees. This is clear; and clearly written provisions of contracts entered into by ordinary men should be construed in the light of common understanding. Reasonable men, considering the provisions of the 'rider' in this case in the light of the entire mortgage contract, cannot differ on its meaning: i.e., All monthly payments are to be paid to the mortgagees.

Further, there is nothing wrong with such a 'rider'. The parties were dealing at arms length; the purposes thereof are not unlawful or against public policy; and, in view of the entire mortgage transaction, it was fully supported by consideration. It is thus enforceable. The mortgagees had a right to its benefits, such as they may be, and the mortgagors had a duty to comply. But notwithstanding, the pleadings and affidavits in support of the motion for summary judgment show, without material dispute, that the mortgagors were in default of these obligations. Therefore, appellants had a legal right, if they so chose, to such redress as the principles of equity would support as meet and just.

We would agree, foreclosure does indeed seem harsh in this case. But it must also be conceded that harshness or hardship alone will not defeat a foreclosure. ² On the other hand, foreclosure of a mortgage will be denied when the breach of the mortgage contract is merely a technical one and such breach does not place the security in jeopardy. ³ The trial judge found as true and undisputed that at no time was the security in jeopardy. The record supports such conclusion. Furthermore,...