Van Eepoel Real Estate Co. v. Sarasota Milk Co.
| Decision Date | 01 August 1930 |
| Citation | 100 Fla. 438,129 So. 892 |
| Parties | VAN EEPOEL REAL ESTATE CO. v. SARASOTA MILK CO. et al. |
| Court | Florida Supreme Court |
On rehearing.
Former judgment vacated and decree appealed from affirmed.
For former opinion, see 120 So. 841.
Syllabus by the Court.
Subsequent purchasers or creditors for value and without notice of a prior unrecorded deed or mortgage to a third person are not affected thereby.
The registry statute does not operate to convey title or to create a lien upon property; but records made under such statute may operate as an estoppel where persons without actual knowledge and without circumstances to put them upon inquiry reasonably may have taken substantial steps relying upon the record; and those who by their conduct or neglect in permitting the record to mislead others must bear any consequent loss, rather than the one who in good faith may have acted with reference to the record as being in accord with actual facts.
The owner of land executed and delivered a purchase-money mortgage on November 25, 1925. The mortgage was recorded April 21, 1926. Meanwhile, and while the mortgage was withheld from record, a mechanic, without notice of the mortgage, performed work on the property in privity with the owner, commencing the work on April 12, 1926, and completing same on April 16, 1926. Notice of the mechanic's lien for the purpose of acquiring a lien as against creditors and purchasers pursuant to section 5380, Comp. Gen. Laws 1927 was filed in the clerk's office July 7, 1926. Thus the mechanic, without notice of the mortgage, commenced and completed his work after delivery of the mortgage but before its recordation. The mortgage was recorded after the mechanic's work was completed but before the mechanic filed his notice of lien in the clerk's office. The mortgagee had no notice of the mechanic's lien when the mortgage was filed. Held, that the mortgagee is estopped to claim priority over the mechanic's lien, the conflicting priorities being occasioned solely by the voluntary omission of the mortgagee to record the mortgage, thus permitting the mechanic to subsequently deal with the property under such circumstances, so far as the record disclosed, as would afford the mechanic a first lien upon the property.
The doctrine announced in Axtell v. Smedley, 59 Fla 430, 52 So. 710, that the act of filing notice of a mechanic's lien in the clerk's office pursuant to section 5380, Comp. Gen. Laws 1927, has no retroactive effect upon the intervening rights of innocent purchasers or creditors acquired after the completion of the work and before record of the notice of lien, is adhered to.
Although a purchase-money mortgage, made simultaneously with the conveyance to the mortgagor, takes precedence over any prior or existing lien arising through the mortgagor and in the creation of which the mortgagee did not acquiesce nevertheless it is as much the duty of a purchase-money mortgagee, as of any other mortgagee, to promptly record his mortgage if he would preserve his priority over the rights of innocent creditors arising subsequently to the delivery of such mortgage, and when such a mortgagee elects to withhold his mortgage from record and permits others to innocently deal with the property in ignorance of his unrecorded mortgage, the same rules of estoppel apply to a purchase-money mortgagee as to any other mortgagee.
There being no fraud or duress, a notary's certificate of acknowledgment in the form prescribed by law, when the notary acts within his jurisdiction, is conclusive of the facts and acts recited, and cannot be questioned collaterally. Appeal from Circuit Court, Sarasota County; Paul C. albritton, judge.
Jackson, Dupree & Cone, of Tampa, for appellant.
Early & Arnest, of Sarasota, for appellees.
This is a contest for priority between a mortgagee and a mechanic's lien claimant asserting liens upon the same land.
The mortgage was executed by the owner of the property November 25, 1925. It was recorded April 21, 1926.
The mechanic's lien claimant dealt directly with, and was therefore in privity with, the owner. The mechanic's work was commenced on April 12, 1926, and completed on April 16, 1926. Notice of the mechanic's lien was filed in the office of the clerk of the circuit court on July 7, 1926.
The following statutes are pertinent to the controversy:
'No conveyance, transfer or mortgage or real property, * * * 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. * * *' Section 5698, Comp. Gen. Laws 1927.
The statute just above quoted is usually referred to as the recording statute.
The following statutes are found in the chapter relating to the acquisition and enforcement of mechanics' liens:
'Liens prior in dignity to all others accruing thereafter shall exist in favor of the following persons, upon the following described real estate, under the circumstances hereinafter mentioned, to wit.' Section 5349.
The follows provisions affording liens to persons performing labor upon or furnishing materials in the construction or repair of buildings. Sections 5350, 5353, Comp. Gen. Laws 1927.
'As against purchasers and creditors of such owner without notice, such lien shall be acquired upon real estate only from the time of the record in the office of the clerk of the circuit court of the county where the real estate lies of a notice of such lien. * * *' Section 5380, Comp. Gen. Laws 1927.
The chancellor held that the mechanic's lien was superior. That decree was originally reversed by this court (120 So. 841). Upon further consideration it appears that the chancellor's ruling was correct, and should be affirmed.
The lien of the mortgagee was not created, nor did it arise, during the progress of the mechanic's work, so as to charge the mortgagee with notice on that account.
The mechanic commenced and completed his work after the execution of the mortgage but before its recordation, without knowledge or notice of the existence of the mortgage. Neither does it appear that the mortgagee had notice, either actual or constructive, of the mechanic's claim when the mortgage was recorded.
The mortgage came into existence and was a valid lien as between the mortgagor and the mortgagee upon its execution and delivery on November 25, 1925, several months prior to the time the mechanic commenced work. It was of no effect, however, as 'against creditors or subsequent purchasers' for value and without notice, until recorded, which recording occurred on April 21, 1926. Meanwhile, and while there was no mortgage of record, the mechanic commenced and completed his work, thereby acquiring a statutory lien upon the property as against the owner. Thus the mortgagee and the mechanic each held valid and effective liens upon the property so far as the interest of the mortgagor-owner was concerned, the lien of the mortgagor dating from November 25, 1925, the date of the delivery of the mortgage, and the statutory lien of the mechanic dating from April 12, 1926, the date of the commencement of the work, so that, as against the owner, the lien of the mortgage was first in point of time. On April 16, 1926, when the mechanic's work was completed, neither the mortgagee nor the mechanic held a lien good as against the other, since neither had recorded his lien in the public records, and neither had actual notice of the other's lien. Up until April 21, 1926, when the mortgage was recorded, and which was five days after the completion of the mechanic's work, the liens of the mortgagee and of the mechanic, as between themselves as creditors, were merely in posse. On that date, however, the mortgage was recorded, and thereby became first in time of recording as against the mechanic's lien, notice of which was not recorded until July 7, 1926.
Section 5380, Comp. Gen. Laws 1927, provides that 'as against purchasers and creditors of such owner without notice' a mechanic's lien upon real estate shall be 'acquired' only from the time of the record in the clerk's office of a notice of such lien. The mechanic acquired a lien as against the owner from the commencement of the work, but at the time the notice of such lien was recorded the mortgage had been executed, delivered, and previously recorded, and was fully effectual both as against the mortgagor and against creditors and purchasers. In the absence, therefore, of an estoppel operating against the mortgagee under the circumstances stated, the mortgage would constitute a prior lien, being first in time of execution and of recording. See Guaranty Trust Co. v. Thompson, 93 Fla. 983, 113 So. 117; Annotation, Ann. Cas. 1912A, 194. In a contest between persons having only equitable interests, however, priority of time is the ground of preference last resorted to. If one has on different grounds a better equity than the other, priority of time is usually subordinated to other equitable considerations. Myers v. Van Buskirk, 96 Fla. 704, 119 So. 123.
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