Waybright v. Turner

• Decision Date: 22 September 1937
• Citation: 129 Fla. 310,176 So. 424
• Parties: WAYBRIGHT v. TURNER.
• Court: Florida Supreme Court

176 So. 424

129 Fla. 310

WAYBRIGHT v. TURNER.

Florida Supreme Court, Division B.

September 22, 1937

On Petition for Rehearing Oct. 28, 1937.

Proceeding by D. W. Turner against Edger W. Waybright. From an order entered therein, the defendant appeals.

Affirmed and remanded for further proceedings consistent with opinion.

On Petition for Rehearing. Appeal from Circuit Court, Alachua County; H L. Sebring, judge.

COUNSEL

Carlton C. Arnow, of Jacksonville, for appellant.

W. E Baker and Baxter & Clayton, all of Gainesville, for appellee.

OPINION

PER CURIAM.

Waybright appeals from an order striking all of his answer to D. W Turner's petition, claiming part of a surplus fund held in the court's registry and arising from foreclosure of a mortgage on certain property herein referred to as the 'Waybright property,' except that portion of the answer alleging that the price bid at the foreclosure sale of certain other property known as the 'Colclough property,' which sale price had been confirmed by the court, was not the fair market value of said property at the time and place of said sale, and further ordering the parties to appear at a certain time to present their evidence on the latter point.

After a first mortgage held by the Connecticut General Life Insurance Company on certain property referred to in this opinion as the 'Waybright property' had been foreclosed and satisfied in full, there remained in the registry of the court a surplus of $10,481.43. The chancellor on August 3, 1935, entered an order requiring that Lucille Colclough Vairns, as administratrix of the estate of Olive C. Colclough, deceased, file within ten days her bill of complaint setting forth her claim, if any, to the surplus fund, and that D. W. Turner and Edgar W. Waybright plead to the bill of complaint within ten days thereafter.

The record does not show whether or not the bill of complaint of Lucille Colclough was ever filed, or, if filed, what became of it.

The next proceeding in the cause, as shown by the record, was the amended petition of D. W. Turner, filed June 12, 1936, praying that he be paid from the surplus in the registry of the court, resulting from the foreclosure of the mortgage in the case of Connecticut General Life Insurance Co. v. Plaza Theatre Co., the sum of $9,923.99.

The petition alleged that, in pursuance of certain orders or decrees of the court dated May 1, 1936 (neither of which appears in the record), petitioner claimed the surplus accruing from the foreclosure sale together with interest; that petitioner was a defendant in said foreclosure because he was the owner and holder of a mortgage made by Olive C. Colclough and the Plaza Theatre Company, dated November 6, 1929, to W. R. Thomas, covering certain lands owned by Olive C. Colclough (known as the 'Colclough property') as a first mortgage, and covering certain lands owned by the Plaza Theatre Company (known as the 'Waybright property') as a second mortgage, which mortgage was assigned to petitioner by W. R. Thomas, on March 6, 1930, for value, before maturity and without notice of any infirmities; that on September 12, 1934, the Connecticut General Life Insurance Company, the owner and holder, by assignment from the Baldwin Mortgage Company, of a first mortgage on the 'Waybright property,' filed its bill to foreclose said mortgage, and petitioner as owner and holder of a second mortgage on said lands was made a defendant; that said foreclosure suit was prosecuted to final decree and said property was sold at the foreclosure sale for $35,800; that the amount of the final decree was $26,469.87, which left a surplus of $10,481.43, which surplus was then in the registry of the court; that, after institution of this foreclosure suit, petitioner filed his bill of complaint to foreclose his first mortgage on the 'Colclough property'; that he obtained final decree of foreclosure against said property; that thereafter on the first Monday in June, 1935, said property was sold at foreclosure sale to petitioner for $3,250, being the best bid therefor, said amount being credited on the amount of the final decree, and said sale being confirmed by the court; that there is still due petitioner under said mortgage the sum of $9,923.99, with interest thereon, which sum is secured by the lien of petitioner's second mortgage on the property formerly held and owned by the Plaza Theatre Company (the 'Waybright property'), which lien is superior to all other liens against said property and the rights of the holder of the equity of redemption; that said lien has been transferred to the surplus fund arising from foreclosure of the first mortgage thereon; that petitioner is entitled to have $9,923.99, with interest, which is still due and owing to him under his mortgage, satisfied out of said surplus fund now in the registry of the court; that petitioner was entitled to have an order directing the clerk to pay him this sum.

Motion to strike portions of the amended petition and motion to dismiss the amended petition were made.

The court denied the motion to dismiss, and granted the motion to strike an immaterial part of the amended petition which was not necessary to establish the claim to the surplus fund.

Edgar W. Waybright answered the petition, alleging that he owned in fee simple the 'Waybright property,' free from all encumbrances except a mortgage to the Connecticut General Life Insurance Company, which mortgage was fully paid out of the proceeds from the sale of said property on foreclosure before the surplus was paid into the registry of the court; that he (Waybright) was entitled to the surplus because Turner's mortgage was satisfied before the surplus arose; that the deficiency on Turner's note and mortgage does not amount to $9,923.99; that Turner did not receive his note and mortgage without notice of the infirmities in the title of the assignor; that said note and mortgage had been executed to W. R. Thomas to secure him against loss because of his indorsement upon a note for approximately $8,500, at the Phifer State Bank, the proceeds of which had been used to pay off a prior existing mortgage of Olive C. Colclough upon the 'Colclough property'; that said note at the Phifer State Bank was fully paid and discharged and W. R. Thomas did not suffer any loss by reason of his indorsement thereon; that the amended petition is based upon the mortgage and not upon the note, and the mortgage is subject to all defenses which might have been asserted against it in the hands of W. R. Thomas, regardless of whether or not Turner had notice of the infirmities in the title of Thomas; that Turner did not pay $10,000, but only $8,500 for said note and mortgage, and, even though he be protected as a bona fide holder for valuable consideration, it would be only to the extent of the consideration paid for the same; that Turner, the petitioner, in foreclosing his mortgage on the 'Colclough property' prayed for a deficiency decree, but neither Edgar W. Waybright, the Plaza Theatre Company, or the Trio Realty Company were made parties to said suit; that final decree was rendered in said suit and the property ordered sold; that petitioner bid in said property at said sale, but he bid it in at a price which did not represent its true value; that it is worth much in excess of said bid, being worth $14,000, and defendant is not bound by said bid; that, if the real value of said property was credited upon the indebtedness, petitioner would not have been entitled to a deficiency decree in any amount; that the confirmation of sale did not contain any deficiency decree as prayed for in the bill of complaint; that this was an act that would discharge a simple contract, and it thereby discharged said indebtedness.

The answer concluded with a prayer that Edgar W. Waybright be paid the entire sum of $10,481.43, being held in the registry of the court, together with his costs expended in the matter.

Motion to dismiss and motion to strike the answer of Edgar W. Waybright were filed.

The court granted the motion to strike all of Waybright's answer except that part alleging that the price bid at the sale of the 'Colclough property,' which was later confirmed by the court in a proceeding to which Waybright was not a party, was not the fair market value of said property at the time and place of said sale; and ordered that D. W. Turner and Edgar W. Waybright appear before the court on August 7, 1936, at 10 o'clock a. m., and produce evidence, if any they had, concerning the value of said property at said time and place.

From this order of the chancellor, Edgar W. Waybright took an appeal. Without taking a cross-appeal D. W. Turner cross assigned as error that portion of the order allowing the remaining portion of said answer to stand and requiring the parties to produce their evidence.

It is contended in the first three questions presented that because of the absence of a deficiency decree in the proceedings foreclosing the mortgage on the 'Colclough property,' the final decree and the confirmation of sale had the effect of a final judgment upon the claim of indebtedness, rendering any further action on the indebtedness res adjudicata; that the payment of the $3,250 thereon fully satisfied the liability of all parties on the indebtedness and thereby destroyed the lien of the mortgage on any other property; that because of such fact, it also destroyed the lien of the mortgage on the surplus fund.

In his bill to foreclose the mortgage on the 'Colclough property,' D. W. Turner prayed for a deficiency decree but the court did not render one. Instead, the chancellor decreed that, if the price of the...