Stewart v. Gaines
| Decision Date | 02 June 1931 |
| Citation | 137 So. 794,103 Fla. 268 |
| Parties | STEWART et ux. v. GAINES.[*] |
| Court | Florida Supreme Court |
Suit by C. L. Gaines against James W. Stewart, Sr., and wife. Decree for the complainant, and the defendants appeal.
Reversed with directions.
Syllabus by the Court.
A complainant who, in a bill to foreclose a mortgage, omitted to foreclose such mortgage by his first bill of complaint against one or more defendants who claimed to have some right, title, or interest in and to the property covered by the mortgage, junior to the right, title, and interest of the complainant, may file another bill of complaint in chancery and in the same court to foreclose his mortgage against such parties as may have been inadvertently omitted in his first bill of complaint.
The holder of a mortgage or the purchaser at a foreclosure sale may, where the foreclosure proceedings are faulty, void, and of no effect foreclose by a suit de novo such mortgage against the holders of any junior right, title, or interest in and to the mortgaged property.
The equity of a purchaser of a parcel as against his grantor, the owner of a tract subject to a lien, rests on the ground that where one who is bound to pay a debt confers on others rights in any portion of the property subject to the lien of the debt, retaining other portions himself, it is unjust that he should be deprived of his rights so long as he has property covered by the lien out of which the debt can be made.
A mortgagee who held a mortgage on sixteen lots of land which contained a clause permitting the mortgagor to sell the lots and obtain releases so long as the mortgagor was not in default, brought a foreclosure suit against the mortgage without making a purchaser of one of the lots a party defendant to the suit for foreclosure; the lot purchaser was in actual possession under an unrecorded contract of purchase given him by the mortgagor; the circumstance of possession was such as to charge the mortgagee with notice of the adverse claim and occupancy even though the contract was not recorded; the mortgagee obtained a foreclosure decree against all the lands, including the lot of the contract purchaser who was not bound by the decree because he was not a party to the suit. Held that, where the first foreclosure sale did not produce the full amount of the mortgage debt, upon a subsequent foreclosure the mortgagee will be deemed to have elected to have deliberately omitted the contract purchaser as a party to the first suit under the circumstance of this case, and therefore to have elected to foreclose his mortgage against the contract purchaser for the difference only between the amount realized on the first sale and the mortgage debt evidenced by the final decree against the mortgagor. Appeal from Circuit Court, Clay County; De Witt T. Gray, judge.
L. E. Wade, of Green Cove Springs, for appellants.
E. J. L'Engle and J. W. Shands, both of Jacksonville, for appellee.
In this cause Mr. Justice WHITFIELD, Mr. Justice ELLIS, and Mr. Justice TERRELL are of opinion that the decree of the circuit court should be affirmed, while Mr. Chief Justice BUFORD, Mr. Justice BROWN, and Mr. Justice DAVIS are of opinion that the decree should be reversed. When the members of the Supreme Court are sitting six members in a body and, after full consultation, it appears that the members of the court are permanently and equally divided in opinion as to whether the decree should be affirmed or reversed, and there is no prospect of an immediate change in the personnel of the court, the decree should be affirmed. Therefore it is considered, ordered, and adjudged under the authority of State ex rel. Hampton v. McClung, 47 Fla. 224, 37 So. 51, that the decrees of the circuit court in this cause be, and the same is hereby affirmed.
On Rehearing.
C. L. Gaines, the appellee, was complainant in the court below and was the owner and holder of a mortgage on lands in Clay county, Fla., given by T. C. Gilbert and Alice J. Gilbert, his wife, to secure the sum of $12,000, secured by mortgage dated June 16, 1626, and recorded in the public records of said county on June 18, 1926.
The mortgagors defaulted in the payments provided for by the mortgage, and the complainant filed his bill for foreclosure on October 19, 1927. The defendants named in the bill were the mortgagors, and several other defendants. James Stewart, Sr., and Adel Stewart, his wife, the appellants, were not made parties to that suit.
Thereafter the original cause proceeded to a final decree of foreclosure and sale in favor of the complainant, and the lands covered by such mortgage were sold pursuant to such decree to the complainant on May 7, 1928, for the sum of $10,000. This sale was duly confirmed by the court.
Thereafter the complainant discovered that James Stewart, Sr., and Adel Stewart, his wife, the appellants here, claimed to have some right, title, or interest in one of the lots covered by the complainant's mortgage. Upon ascertaining this fact, the complainant in the first foreclosure suit, who had brought in the property at the foreclosure sale in that suit, filed his supplemental bill of complaint in this cause against Stewart and his wife to forclose the mortgage against the interests claimed by them.
In the trial of this last suit it was established that the defendants, Stewart and wife, claimed an interest in a part of the lands covered by the complainant's mortgage by virtue of a contract to sell one lot included in the lands covered by the complainant's mortgage, which contract had been made by the original mortgagors to Adel J. Stewart under date of November 9, 1926.
This contract was admittedly never recorded in the public records of Clay county, Fla., but it was established beyond question that the vendees in the contract, the Stewarts, entered into the visible, open, and notorious possession of the lot covered by the contract and proceeded with the occupancy of a dwelling house erected thereon.
The secound foreclosure, based upon the supplemental bill of complaint, was concluded by a sale of the lands held on September 2, 1929, which sale was duly confirmed by the circuit court.
The decree and foreclosure sale were affirmed by this court by an equal division of the court on June 2, 1931, and a rehearing has been granted as to whether or not the mortgagee, who had already obtained a credit of $10,000 under the first sale, should be allowed to have a foreclosure under the second sale for the full sum of $13,711.92 realized from the second sale, or whether or not the second foreclosure under the circumstances of this case should have been allowed only for the difference between the amount which had been received under the first foreclosure and the amount of the debt foreclosed.
We have already made reference to the fact that at the time complainant started his foreclosure suit in the first instance the defendants James W. Stewart, Sr., and Adel Stewart were in actual, visible, and notorious possession and were occupying a dwelling house situated on one of the sixteen lots embraced in the complainant's mortgage. This occupancy and possession were under a written contract of sale which had been obtained by the Stewarts from the original owner and mortgagor, although subsequent to the making and recording of the mortgage. The mortgage itself contained a release clause under which any one of the sixteen lots could have been released upon compliance with the condition of the mortgage and while the mortgagors were not in default. In the decree which...
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