MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., APPELLANT,
v.
PETER A. GEORGE, J. TRACY ROOKS, CONTROL DATA BUSINESS CENTERS, INC., AND LOUIS F. POWELL, TRUSTEE FOR LOUIS F. POWELL, M.D., P.A., DEFINED CONTRIBUTION PENSION PLAN, APPELLEES

Fla. 4th DCA | 1987-12-16
No. 4-86-1117
WALDEN, J., and WEBSTER, PETER D., Associate Judge, concur.
516 So. 2d 1068 Florida District Court of Appeal, Fourth District (1987) Positive Treatment
Cited by 2 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

Merrill Lynch appealed a summary judgment foreclosing mortgages and granting an equitable lien in favor of George for maintenance and operation costs of property owned as tenants in common with Rooks. The court affirmed George's priority for the second mortgage but reversed regarding the equitable lien, holding that George's judgment lien has priority over the equitable lien for pre-recording expenses, and the second mortgage judgment lien has priority over the equitable lien for post-recording expenses.


Holding

George's lien for the second mortgage is superior to the judgment lien because of his valid assignment of the mortgage. However, the judgment lien has priority over the equitable lien for maintenance costs expended before the judgment was recorded, and the judgment lien also has priority over the equitable lien for costs expended after the judgment was recorded. Foreclosure is appropriate, but George is entitled to priority only for sums related to the second mortgage.


Headnotes

[1] An assignee of a mortgage takes the mortgage subject to the priority of a judgment lien recorded after the mortgage but before the assignment.

[2] A co-tenant's disproportionate payment for the preservation of the tenancy may support an equitable lien for contribution.

Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.

Join FLexlaw to unlock all legal intelligence

Key Quotes

“We affirm that aspect of the judgment which provides that George's lien for the amount of the second mortgage is superior in right to the lien of the subsequently recorded judgment. The numerous cases cited by the parties dealing with sub-rogation are not necessary to our determination which rests upon the existence of a specific, express and valid assignment of the promissory note and mortgage.”

Establishes the court's holding that a valid assignment of mortgage provides priority over subsequently-recorded judgment lien without need for subrogation analysis.

Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.

Join FLexlaw to unlock all legal intelligence

Facts & Procedural History

George and Rooks owned an office building as tenants in common. George paid for maintenance and operations while Rooks failed to contribute his share.…

The full statement of facts, procedural history, and disposition for this case are member content.

Join FLexlaw to unlock all legal intelligence

© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.


Opinion of the Court
HERSEY, Chief Judge.

HERSEY, Chief Judge.

The final summary judgment from which this appeal is taken provided for the foreclosure of a mortgage and foreclosure of an equitable lien, both for the benefit of appellee, Peter A. George.

The facts are somewhat unusual. Peter A. George and J. Tracy Rooks purchased an office building in Broward County, each acquiring an undivided one-half interest in the property, taking title as tenants in common. They encumbered the property with two mortgages, only the second of which, recorded May 1, 1984, is relevant here.

Subsequent to the purchase, George expended money for maintenance and operation of the building and Rooks failed to contribute his share. When the second mortgage matured, George purchased the promissory note and took an assignment of the mortgage.

Meanwhile, in unrelated litigation, Merrill Lynch obtained a judgment against Rooks which it promptly recorded in Bro-ward County.

George then brought an action to foreclose the second mortgage, in which he sought from Rooks one-half of the amount which George had been required to pay on the mortgage as well as one-half of all amounts expended for maintenance and operation of the office building.

As to Merrill Lynch, George took the position that because the lien of the second mortgage of which he was assignee was prior in time to their subsequently-recorded judgment, his lien was superior to that of the judgment lienor. George also claimed an equitable lien, arising from sums expended for maintenance and operation of the office building, as having priority over the judgment lien.

In defense, Merrill Lynch divides the sums due George from Rooks for maintenance and operation of the office building into two categories: sums expended before the judgment lien was recorded and those expended thereafter. We affirm that aspect of the judgment which provides that George’s lien for the amount of the second mortgage is superior in right to the lien of the subsequently recorded judgment. The numerous cases cited by the parties dealing with sub-rogation are not necessary to our determination which rests upon the existence of a specific, express and valid assignment of the promissory note and mortgage.

With regard to the equitable lien claimed by George, there is no quarrel with the proposition that when one co-tenant makes a disproportionate payment of sums required for preservation of the tenancy, a right of contribution arises as the payments are made which may support an equitable lien. See, e.g., Blumin v. Ellis, 186 So. 2d 286 (Fla. 2d DCA), cert. denied, 189 So. 2d 634 (Fla.1966).

With reference to those sums expended prior to the judgment lien being recorded, there being nothing in the public records to constitute constructive notice to the judgment creditor or any state of facts giving rise to a duty to inquire, and there being no actual notice, the lien of the judgment has priority.

Since the equitable lien for sums expended after recording of the judgment lien was not even in existence at the time of such recording and there being no circumstances to raise an estoppel or to constitute waiver, the lien of the judgment is clearly superior to that of the equitable lien.

We therefore reverse and remand, holding that foreclosure was appropriate but that appellee is entitled to priority only for sums expended in connection with the retired second mortgage. Appellant’s judgment lien has priority over appellee’s equitable lien and is therefore entitled to proceeds of any foreclosure sale (or to a comparable credit should appellant bid at the sale) to the extent of its judgment, and sums in excess of all of the foregoing accrue to the benefit of appellee. We note that the existing first mortgage is not affected by any of these proceedings.

REVERSED AND REMANDED.

WALDEN, J., and WEBSTER, PETER D., Associate Judge, concur.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • Se. Seminole Civic Ass'n, Inc. v. W.A. Adkins, 604 So. 2d 523 (Fla. 5th DCA 1992)
    …pson on Real Property, § 428 p. 673. . The lot owners cannot be said to be tenants in common of an easement from whom a duty of contribution exists for disproportionate payments required for preservation of the tenancy. See Merrill Lynch v. George, 516 So. 2d 1068 (Fla. 4th DCA 1987). Here there are multiple distinct rights of user and not a single easement. 3 Tiffany, The Law of Real Property, § 756 (3d Ed. 1939). See also Florida Power Corp. v. McNeely, 125 So. 2d 311 (Fla. 2d DCA 1960) (no estate or tenanc…

Authorities Cited

Full citator, related cases, and AI research tools

Open in FLexlaw