Sunrise Sav. and Loan Ass'n of Florida v. Giannetti

• Decision Date: 06 April 1988
• Docket Number: Nos. 4-86-1787,4-86-2718,s. 4-86-1787
• Citation: 13 Fla. L. Weekly 882,524 So.2d 697
• Parties: 13 Fla. L. Weekly 882 SUNRISE SAVINGS AND LOAN ASSOCIATION OF FLORIDA, Appellant/Cross Appellee, v. Silvio GIANNETTI and Mary Giannetti, Appellees/Cross Appellants, and Timothy E. Graham and Oceanside Development Corporation, a Florida corporation, et al., Appellees. SUNRISE SAVINGS AND LOAN ASSOCIATION OF FLORIDA, Appellant, v. Timothy E. GRAHAM and Oceanside Development Corporation, a Florida corporation, et al., Appellees.
• Court: Florida District Court of Appeals

Page 697

524 So.2d 697

13 Fla. L. Weekly 882

SUNRISE SAVINGS AND LOAN ASSOCIATION OF FLORIDA, Appellant/Cross Appellee, v. Silvio GIANNETTI and Mary Giannetti, Appellees/Cross Appellants and Timothy E. Graham and Oceanside Development Corporation, a Florida corporation, et al., Appellees SUNRISE SAVINGS AND LOAN ASSOCIATION OF FLORIDA, Appellant, v. Timothy E. GRAHAM and Oceanside Development Corporation, a Florida corporation, et al., Appellees.

Nos. 4-86-1787, 4-86-2718.

District Court of Appeal of Florida Fourth District.

April 6, 1988.

Rehearing Denied June 3, 1988.

Larry Klein and Julie Farina of Klein & Beranek, P.A., and Kingcade & Campbell, West Palm Beach, for appellant/cross appellee.

Sally R. Doerner, Scott D. Sheftall and Gary S. Betensky of Floyd Pearson Richman Greer Weil Zack & Brumbaugh, P.A., Miami, for appellees/cross appellants Silvio and Mary Giannetti.

GLICKSTEIN, Judge.

This appeal reviews the trial court's determination of priority, as between two competing mortgages. We appreciate the attention which the trial court gave to the case. Nevertheless, we are compelled to conclude that it misconstrued the legal effect of the evidence; and we hold, on the authority of United Service Corporation v. Vi-An Construction Corp., 77 So.2d 800 (Fla.1955), and Jones v. Lally, 511 So.2d 1014 (Fla. 2d DCA 1987), that appellant's mortgage was entitled to priority. Accordingly, we reverse the second amended final judgment and final decree of foreclosure.

The facts reflect that appellee Giannetti was victimized by the misconduct of a lawyer, John P. Fitzgerald, who had induced appellee into a joint venture, then had repeatedly misled him as to what was and was not happening. His misconduct included preparation of a satisfaction of mortgage, on which appellee's signature was forged. Appellant relied, to its detriment, on the forged satisfaction.

The circumstances which should have made appellee, a very successful businessman, suspicious and which make him a more blameworthy victim than appellant included the facts that he never was asked for money for payments on the two mortgages except the very first time each fell due, or for contributions to taxes on the partnership property; that for about three months after Fitzgerald told him (after the actual sale) that the property was in process of being sold, and that he would get money after the closing, no money arrived; that when he finally inquired and was told there was no cash, just a note, he did nothing; that when he saw the property and could see the progress already made on the construction project belied the supposed closing time, and someone told him there was a note, he still did nothing; and that he let things drag on for almost a year longer, after learning about three mortgages, two of which were entirely a surprise, and while Fitzgerald avoided him, before hiring counsel to investigate.

The trial court indicated it was perplexed because of the possibility appellee had been negligent, but found appellee had not been negligent to the degree that he would be estopped from asserting his prior claim. It based its conclusion on Northup v. Reese, 68 Fla. 451, 67 So. 136 (1914) ("[A]n unauthorized cancellation on the record of a mortgage does not destroy the lien of the unsatisfied mortgage or affect the rights of a bona fide holder for value who does nothing to mislead or deceive subsequent purchasers or mortgagees."); and Sempf v. Ruhlman, 415 So.2d 759 (Fla. 2d DCA), review denied, 422 So.2d 843 (Fla.1982) (father who took back a note and mortgage when selling property to his son, who never received any of the monthly payments the son was supposed to make to him, and who had actual knowledge, several months prior to the son's resale of the property, that the son might attempt to forge a satisfaction of the mortgage, but apprised the county clerk of that and was told there would be a legal remedy if it happened, was not negligent and was entitled to reinstatement of his mortgage). It may be surmised that the senior Sempf's notice to the county clerk made the difference in that case. Appellant observes, convincingly, as to Northup, that Northup's result is predicated on the fact that as between the two "innocent" parties the subsequent mortgagee was more at fault. The holder of the cancelled mortgage continued to receive payments on the mortgage, so there was no reason for her to be suspicious, whereas there were signs that should have caused the subsequent mortgagee to be suspicious of the satisfaction of the first mortgage, and should have investigated.

The general rule is that a fraudulent or mistaken satisfaction is undone when no third party has subsequently in good faith acquired an interest in the property, without notice of the fraud or mistake. However, as Sempf shows, such satisfactions have also been undone where an innocent third party has acquired an interest. The key question is, what are the criteria on which such a decision is based.

The Vi-An court quoted older case law, when explaining estoppel in the context of that case, that one who was silent when he had a duty to speak will not be permitted to speak when in justice he...