Voorhis v. Crutcher

• Decision Date: 30 July 1929
• Citation: 123 So. 742,98 Fla. 259
• Parties: VOORHIS v. CRUTCHER et al.
• Court: Florida Supreme Court

123 So. 742

98 Fla. 259

VOORHIS v. CRUTCHER et al.

Florida Supreme Court, Division B.

July 30, 1929

Action by Virgil H. Voorhis against W. E. Crutcher and others. To review the judgment, plaintiffs bring error.

Affirmed.

Syllabus by the Court

SYLLABUS

Statute does not authorize suit at common law to recover on chancellor's findings as to balance due after foreclosure sale, where chancellor refuses to enter deficiency decree (Acts 1927, c. 11993). Acts 1927, c. 11993, relating to foreclosure of mortgages and authorizing complainant to sue at common law to recover deficiency, does not authorize a suit at common law to recover upon the findings of a chancellor as to the balance due upon a debt after applying proceeds of a foreclosure sale, where chancellor has refused to enter a deficiency decree.

Appeal from Circuit Court, Lee County; George W. Whitehurst, judge.

COUNSEL

Sheppard & West, of Ft. Myers, for plaintiff in error.

Campbell & Campbell, of Ft. Myers, for defendants in error.

OPINION

BUFORD, J.

In this case the plaintiff in error sued W. E. Crutcher, John A Hall, and Clara W. Angell, and alleged as his cause of action a finding of the chancellor, contained in an order of confirmation of sale incident to foreclosure proceedings, in effect that there was due from the defendants to the plaintiff, after the application on the proceeds of the sale on the original debt, the sum of $15,758.25.

The defendant Crutcher demurred to the declaration, and the demurrer was sustained, and a judgment was entered thereon. Writ of error was sued out.

The question before this court is whether or not the plaintiff stated a cause of action in attempting to base his suit on the findings of the chancellor as contained in the order of confirmation of sale under foreclosure.

The defendant Crutcher contended that plaintiff's action was on the note to secure the payment of which the mortgage was executed for such balance as remained unpaid after crediting the proceeds of the sale of the mortgaged property.

We find no statutory authority in this state authorizing suit at common law to recover upon the findings of a chancellor as to the balance due on a debt after applying the proceeds of a foreclosure sale in a case where the chancellor has refused as he did in this case, to enter a deficiency decree.

Chapter 11993, Acts of 1927, provided: 'That in all suits for the foreclosure of mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a deficiency should one exist, shall be within the sound judicial discretion of the Court, but the complainant shall also have the right to sue at common-law to recover such deficiency.' The latter part of the above-quoted section, 'but the complainant shall also have the right to sue at common-law to recover such deficiency,' is at best only a restatement of the common-law and the law obtaining in this state prior to that enactment, and it cannot be construed to authorize a suit to be filed based upon the findings of the chancellor in such cases. The findings of the chancellor might be admissible in evidence to prove the amount of the deficiency after crediting the proceeds of the mortgage foreclosure on the debt. But the right of action is not on such findings, but is on the original obligation, whether it be a note or bond for the balance remaining unpaid after crediting the proceeds of the foreclosure sale. In Wilson & Herr v. Hayward, 6 Fla. 171, this court say:

'In case of a mortgage to secure notes payable at different periods the note which first falls due has the prior right to be satisfied out of the mortgaged property, unless there is some peculiar equity attached to the notes of subsequent date, and so as to the other notes.'

This enunciation was affirmed in Polk County National Bank v. Darrah, 52 Fla. 581, 42 So. 323, and in Kissimmee Everglades Land Co. v. Carr, 88 Fla. 387, 102 So. 335.

As notes secured by mortgage may be held by different individuals, and the sale of mortgaged property might satisfy the notes in the hands of some holders and not satisfy those of a later maturity date in the hands of other holders, the findings of the chancellor as to the general balance unpaid would be in many cases indefinite and uncertain as to the legal liability of the maker of the notes. In Scott v. Taylor, 63 Fla. 612, 58 So. 30, 31, this court say:

'A mortgage executed as security for the payment of a negotiable promissory note is a mere incident of an ancillary to such note. When it comes to the payment thereof, the rights of the parties thereto, as well as of third persons, are governed by the rules relating to negotiable paper; in other words, payment to anyone other than the holder of the negotiable instrument is at the risk of the payer, and is binding upon the holder of the paper only where express or implied authority to receive such payment is established by the person making the same. Hence, payment of a negotiable note secured by mortgage by the mortgagor or his grantee, where made to the original mortgagee who is not in possession of the note and mortgage, is not binding upon an assignee thereof before maturity who was in possession of the papers at the time of payment, unless he had expressly or impliedly authorized such payment. * * *

'The duty of a maker of a negotiable note to see that the person to whom he pays it has it in his possession before making the payment is not affected by the fact that the note was on its face made payable at the office of the person to whom he makes the payment. * * *

'The maker of a negotiable promissory note can satisfy it only by payment to the owner at the time of such payment, or to such owner's authorized agent. If the recipient of the money is not actually authorized, the payment is ineffectual unless induced by anambiguous direction from the owner or...