Watson v. Vafides, I-146

• Decision Date: 18 June 1968
• Docket Number: No. I-146,I-146
• Citation: 212 So.2d 358
• Parties: P. L. WATSON, Trustee, Appellant, v. John VAFIDES and Julius Carpene, Appellees.
• Court: Florida District Court of Appeals

Page 358

212 So.2d 358

P. L. WATSON, Trustee, Appellant, v. John VAFIDES and Julius Carpene, Appellees.

No. I-146.

District Court of Appeal of Florida, First District.

June 18, 1968.

Rehearing Denied Aug. 7, 1968.

Thomas H. Anderson and Karl Hart of Shutts & Bowen, Miami, for appellant.

Alfred E. Hawkins, Daytona Beach, for appellees.

RAWLS, Judge.

The intervenor in a mortgage foreclosure suit has appealed from an amended final decree entered by the Circuit Court for Volusia County.

The principal question presented for our determination in this appeal is whether the chancellor erred in the said decree in setting aside the sale of the mortgaged property to the intervenor at the foreclosure sale under the circumstances set forth below.

The propriety of foreclosing the said mortgage is not before us for adjudication. The original final decree ordering such foreclosure was appealed to the Supreme Court of Florida, which dismissed the appeal. After remand and the foreclosure sale, the chancellor entered the amended final decree appealed from herein.

Briefly stated, the basic facts shown in the record and pertinent in the present consideration are the following:

The appellee, Julius Carpene, filed a complaint in the Circuit Court against the appellee John Vafides seeking to foreclose a mortgage executed by the latter. Later the appellant, P. L. Watson, Trustee, filed a motion to intervene and his answer as intervener, asserting therein that he was an owner and holder of two judgments against Vafides. The court granted the motion to intervene.

On August 30, 1965, the court entered its original final decree, holding that the mortgage sued upon was in default and that Carpene was entitled to recover the amount of $29,911.28 as principal and interest, costs, and attorney's fees. The decree further provides that unless Vafides should, within three days after the entry of the decree, pay to Carpene the said sums, the clerk of the court shall sell the mortgaged property at public sale on September 15, 1965, in the manner prescribed by Section 702.02, Florida Statutes, F.S.A., upon the terms and conditions provided in the decree.

Vafides did not pay the sums stated in the decree, so at the time and place as advertised, that is, at 11:05 a.m. on September 15, 1965, the clerk of the court held a public sale of the subject mortgaged property. The parties and several others evidencing an interest in the property were present. A number of bids were received, but the highest and best bid was that of defendant Vafides in the sum of $50,000.00. The clerk then invited Vafides to come into his office and conclude the transaction. When Vafides informed the clerk that he did not presently have the funds available but that a relative in Europe had wired the money to a New York bank, he was advised that he would be required to produce the amount of his bid within the legal hours of the sale. The advertised hours for sale were between 11:00 a.m. and 2:00 p.m., and Vafides was given until 1:45 p.m. to complete his purchase or the property would again be offered for sale.

When Vafides failed to produce the money, the clerk again offered for sale the mortgaged premises which were knocked off to Watson on his bid of $30,000.00.

Prior to confirmation Vafides filed his objections stating several grounds, one being that the sale was invalid and that the highest and best bid was that of Watson made at the first sale in the sum of $41,000.00.

The chancellor entered the amended final decree appealed from herein. This decree set aside the sale and ordered a resale upon the finding:

'* * * the sale held by the Clerk of the Circuit Court on September 15, 1965, was not properly conducted in that when the Defendant, John Vafides, did not deposit with the Clerk the amount of the successful bid within a reasonable time, that the Clerk should have resumed the bidding at the amount of the bid of the previous bidder prior to the successful bid of the Defendant, John Vafides.'

The authority of the chancellor to refuse to confirm and to order a resale is set forth in Southern Realty & Utilities Corporation v. Belmont Manufacturing Corporation, ¹ to wit:

'It should be noted that this was not a case of the chancellor's being asked to set aside a sale which he has already confirmed, which carries with it a presumption of regularity, but of his refusing to confirm and ordering a new sale. It is both the right and duty of the chancellor to supervise the process in his court and to protect all the parties thereto from unfairness as well as fraud in its execution. Macfarlane v. Macfarlane (50 Fla. 570, 39 So. 995). Since the foreclosure sale is not complete until it is confirmed, and carries no presumption of regularity, it should not take as strong a showing to justify a chancellor's exercise of his discretion to refuse confirmation as it does to set aside a confirmed sale. His discretion is broader in the one case than in the other.'

At common law, a mortgage was regarded as passing the legal title to the estate pledged to the mortgagee, and if the debtor failed to pay or perform at the stipulated time, he ceased to have any interest in the estate. At an early date equity recognized the right of the mortgagor, even after default, to maintain a bill in equity to redeem; this right was oftentimes referred to as 'equity of Redemption.' The mortgagor's equity of redemption has also been defined as his residium of interest in the mortgaged property, and as such is measured by the balance remaining after the debt is discharged from the mortgaged property. ²

Florida has long recognized that the mortgagee has only a lien, and foreclosure is only or the purpose of enforcing it. ³ The strict common law type foreclosure has never been permitted in this state, but the equitable remedy of the mortgagee is a sale of the property to pay his debt. ⁴ Although the general statement most often quoted is, 'The essential purpose of such a suit (foreclosure of a mortgage) is to have the mortgaged property applied to the debt secured,...