Summerlin v. Orange Shores, Inc.

• Decision Date: 28 May 1929
• Citation: 97 Fla. 996,122 So. 508
• Parties: SUMMERLIN v. ORANGE SHORES, inc., et al.
• Court: Florida Supreme Court

122 So. 508

97 Fla. 996

SUMMERLIN v. ORANGE SHORES, inc., et al.

Florida Supreme Court, Division A.

May 28, 1929

Action by A. Summerlin against the Orange Shores, Inc., Flesch Bros., and others to foreclose a mortgage. From orders denying complainant's motion to strike the answer of defendant last named and allowing such defendant to enter upon the land and gather the fruit crop, complainant appeals.

Reversed.

Syllabus by the Court

SYLLABUS

Lien of real estate mortgage attached to citrus trees and fruit thereon growing on mortgaged premises. Real estate mortgage executed before enactment of Comp. Gen. Laws 1927, § 5741 permitting valid mortgage liens to be created upon agricultural, horticultural, or fruit crops, became lien upon citrus trees located upon land and fruit thereon which had not been severed; trees and fruit passing as part of realty.

Chattel mortgage will not take priority over earlier real estate mortgage as to fruit not yet begun in maternal flower (Comp Gen. Laws 1927, § 5741). Valid chattel mortgage cannot be given upon fruit under Comp. Gen. Laws 1927, § 5741, for indefinite period of time so as to give superior lien over prior mortgage upon the lands, where fruit has not yet begun in its maternal flower.

Crop mortgage can attach only to mortgagor's interest in crops when they come into being. Mortgage on crops, if valid, can only attach to such interest as mortgagor has in crops at time they come into being.

Foreclosure decree transfers mortgagor's title at date of mortgage. Foreclosure decree under real estate mortgage operates to transfer mortgagor's title to purchaser at the sale, and the title acquired relates back to the date of the mortgage.

Holder of mortgage on land containing citrus groves, on showing necessity for receiver to conserve crop, had right to fruit superior to that of creditor given option by mortgagor to apply future crop to his indebtedness (Comp. Gen. Laws 1927 § 5741). Holder of prior real estate mortgage on land containing citrus groves, on showing necessity for receiver to preserve mortgage security while fruit was still upon the trees, in order to realize a sufficient amount from sale of land to pay mortgage debt, had right to fruit superior to that of another creditor given option by mortgagor to apply future crop to his indebtedness, claiming mortgage under Comp. Gen. Laws 1927, § 5741, where the fruit was not in existence at the time the alleged chattel mortgage was given and did not come into existence until after default in real estate mortgage.

Agreement to market fruit through creditor and give option to creditor to apply subsequent crops until indebtedness was paid held not to create mortgage lien (Comp. Gen. Laws 1927, § 5741). Instrument whereby owner of citrus groves agreed to market all crops for particular season through creditor, and further agreed that creditor should have option of applying agreement to crops grown during subsequent seasons until all indebtedness was fully paid, held not to constitute chattel mortgage under Comp. Gen. Laws 1927, § 5741, and as to subsequent crops there was a mere executory agreement to give option to take possession of corp, which, would create no lien but merely afford remedy in damages for breach.

Landowner cannot create lien on fruit superior to earlier real estate mortgage by mortgaging nonexistent fruit which comes into existence only after default in real estate mortgage and foreclosure proceedings thereon (Comp. Gen. Laws 1927, § 5741). Owner of fruit, before default in payment of debt secured by real estate mortgage, may give chattel mortgage upon fruit in existence under Comp. Gen. Laws 1927, § 5741 but owner cannot create lien on fruit superior to first mortgage lien upon the land by attempting to mortgage fruit not yet in existence and which does not come into existence until after default in the real estate mortgage and institution of proceedings for foreclosure.

Appeal from Circuit Court, Polk County; H. C. Petteway, judge.

COUNSEL

E. C. Wimberly, of Winter Haven, for appellant.

Johnson, Bosarge & Allen, of Bartow, for appellees.

OPINION

ELLIS J.

J. A. Dugger and wife, Winifred, owed $35,000 to George M. Peabody for part of the purchase price of certain lands in Polk county and gave him three promissory notes for $11,666.67 each, dated April 18, 1925, and payable respectively one, two, and three years after date.

To secure the payment of those notes they executed a mortgage to Peabody upon the land purchased, by the terms of which the Duggers agreed to pay the notes and interest accruing thereon and all costs and attorney's fees which Peabody might be required to pay in collecting the notes by foreclosure or otherwise. The mortgage contained covenants to the effect that the mortgagor would pay the notes and interest when due; pay all taxes assessed upon the lands; keep the citrus groves located upon the land in firstclass condition by proper working, spraying, fertilizing, and plowing; and that upon failure to observe any of the covenants the mortgagee should have the option of declaring the entire debt to be due.

The first note was paid and interest upon the other two to October 18, 1926. The second note, which became due in April, 1927, was not paid, nor was interest paid upon either note after October 18, 1926.

In May, 1927, Peabody sold and transferred to A. Summerlin the two notes and mortgage. Summerlin brought his bill to foreclose the mortgage lien in June, 1927, against Orange Shores, Inc., a corporation, John and Katherine Seidenschmidt, Midlakes Realty Corporation, and Flesch Bros., also alleged to be a corporation.

It is alleged that the mortgage was duly recorded on May 22, 1925. Before the first note became due Dugger and wife conveyed the land to Hartridge-Cannon Company, a Florida corporation, the latter assuming the mortgage debt. Hartridge-Cannon Company conveyed to Orange Shores, inc., a Florida corporation, the latter assuming the mortgage debt. The corporation last named paid the first note and interest due in April, 1926.

The lands mortgaged were described as: Lots 7, 8, and 17 of Blount & Whitledge's subdivision of government lots 2, 3, and 4, of section 18, township 28 south, range 26 east, as shown of record in Plat Book 5, p. 3, of the public records of Polk county, Fla.

The bill alleges that the Orange Shores, Inc., subdivided lots 7 and 8 into lots and blocks and there has been released from the lien of the mortgage lots 11, 12, 13, 14, 15, and 16 of block 1, lots 10, 20, and 22 of block 2, lots 1, 2, 3, 16, 17, 18, and 22 of block 3, and lots 1, 2, and 20 of block 4.

John and Katherine Seidenschmidt, Midlakes Realty Company, and Flesch Bros. are made parties defendant because they are alleged to have some interest or claim on the lands. The bill contains the usual prayer for an accounting, payment of the debt, and sale of the premises if necessary, deficiency judgment, subpoena, and general relief.

Three months after the bill was filed the defendant Flesch Bros., a corporation, answered averring that it held a mortgage on all the fruit grown on the 'Orange Shores Addition to the Town of Winter Haven' and 'Lot 17 of Blount & Whitledge's Subdivision of Government Lots 2, 3, and 4, of Section 18, Township 28 South, Range 26 East.'

This is part of the land covered by the mortgage held by the complainant. It is averred that the mortgage was given on November 3, 1926, to secure a note for $3,000 due six months thereafter. The mortgage contained a clause that, if the net proceeds of the sale of the crops during the season of 1926-27 should not be enough to pay the debt, the mortgage should be held to apply upon subsequent crops until the indebtedness was fully Paid. It was averred that the fruit crop of 1926-27 only sold for $1,024.04, thus leaving a balance due of $2,155.96, and that Flesch Bros. has a right to 'pick and mortgage' the fruit on the said grove because it says its lien upon the fruit crop is superior to that of the complainant's mortgage.

A few days after the answer of Flesch Bros. was filed the complainant amended his bill by alleging the existence of a large citrus grove upon the lands; that it was being neglected; that there was a large crop of fruit on the grove which would soon be in condition for marketing; and that, unless the citrus crop was conserved and applied to the reduction of the complainant's mortgage, he would not be able to realize a sufficient amount from the sale of the land to pay the debt. There was a prayer for the appointment of a receiver to care for the citrus grove, gather and market the fruit, and an injunction to restrain others from going upon the property and gathering the fruit.

On the date the answer of Flesch Bros. was filed the complainant moved to strike it. The point presented is that Flesch Bros.' mortgage upon the crop of citrus fruit is subordinate to the complainant's mortgage lien on the land, and the answer therefore is no defense to the relief sought by the bill of complaint. The motion was denied on the same day, and Flesch Bros. submitted a petition to be permitted to enter upon the lands and gather, market, and sell the fruit and apply the proceeds to its mortgage given by the Orange Shores, Inc. The petition alleged that a receiver had been appointed at complainant's request to take charge of the grove. This petition was granted by an order made on the same date. The complainant appealed from both orders, the one denying the motion to strike the answer of Flesch Bros., and the one allowing it to enter upon the land and gather the fruit crop.

In denying the first motion, that is to say, the motion to strike the answer, the chancellor wrote an elaborate opinion which we have...