ALBERT L. THOMAS, ET AL., APPELLANTS,
v.
DANIEL W. HARTMAN, JR., ET AL., APPELLEES
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The Thomases purchased a Tennessee farm from Hartman, a licensed real estate broker, financed in part by a promissory note secured by a mortgage on Hartman's home. When Hartman defaulted, the Thomases discovered the mortgage was subordinate to a first mortgage, leaving them without security. The trial court held Hartman had no personal liability based on exculpatory language stating the property was the "sole security" for the note. The appellate court reversed, holding that such language does not eliminate personal liability on the promissory note itself.
The exculpatory language does not eliminate personal liability on the promissory note. The language "sole security" is unambiguous and means only that the property is the only security available, not that the debtor is relieved of personal liability. A creditor holding a promissory note may ignore the security and bring an action at law on the indebtedness itself, and such language does not prohibit recovery against the debtor personally.
[1] A creditor holding a note secured by a mortgage may ignore the security and bring an action at law on the indebtedness.
[2] Language in a note and mortgage stating that the property described shall be the sole security for the note does not affect the personal liability of the maker on the pro…
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Join FLexlaw to unlock all legal intelligence“The language here does not prohibit the Thomases from looking to Hartman personally just as they would have been forced to do if the note was unsecured or just as they could do even if there was "good" security.”
Establishes that 'sole security' language does not eliminate personal liability on the promissory note itself
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceHartman, a licensed real estate broker, purchased the Thomases' Tennessee farm for $75,000, with the Thomases (unrepresented by counsel or a broker) t…
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DANIEL, Chief Judge.
Albert and Wanda Thomas appeal from an amended final judgment in which the trial court held that Daniel Hartman had no personal liability on a promissory note secured by a mortgage on the Hartmans’ home because of an exculpatory provision in the note and mortgage. We reverse.
Hartman, a licensed real estate broker, bought the Thomases’ farm in Tennessee. The Thomases, unrepresented by counsel or a real estate broker, took a promissory note secured by a mortgage on the Hart-mans’ home to cover $25,000 of the $75,000 purchase price. The Hartmans failed to pay the $25,000 note when due and the Thomases attempted to foreclose on the mortgage on the home only to discover that the mortgage was not a first mortgage and that foreclosure by the actual first mortgagees left the Thomases without any security for their $25,000 note.
The trial court first entered a judgment against Hartman, but upon motion for a new trial granted an amended final judgment holding that the Thomases were not entitled to recover on the promissory note because of exculpatory language in the initial purchase contract, the note and the mortgage.
The language at issue is found in three documents all of which were prepared by Hartman: the addendum to the sales contract which states “The property described herein shall be the sole security for the note”; the promissory note which contains the language “The property described in the mortgage of even date shall be the sole security for this note”; and the mortgage which includes therein “The property described herein shall be the sole security for the note.” The trial court permitted Hartman to testify regarding his intent when he placed this language in the three documents. This was error. Parol evidence is permitted only where the written document is ambiguous and is then limited to explaining the ambiguity. There is, no ambiguity in the language contained in the three documents. Such language means simply what it states — the property was the only security for the note. The debt evidenced by the note exists independent of any mortgage or any security. A creditor holding a note secured by a mortgage has several options. He may ignore the security and bring an action at law on the indebtedness, he may proceed by foreclosure to enforce the lien, or he may resort to both remedies in order to secure satisfaction. See 37 Fla.Jur.2d “Mortgages and Deeds of Trust” § 400. The language here does not prohibit the Thomases from looking to Hartman personally just as they would have been forced to do if the note was unsecured or just as they could do even if there was “good” security. Compare the language here with Sample v. Hundred Lakes Corp., 107 Fla. 568, 145 So. 193 (1933); Heim v. Kirkland, 356 So. 2d 850 (Fla. 4th DCA 1978); Policastro v. Rudt, 180 So. 2d 472 (Fla. 2d DCA 1965).
The language here does not contain any latent ambiguity. The language “sole security” means exactly what it says and does not in any way affect the personal liability of Hartman on the promissory note. Parol evidence in the form of Hartman’s testimony as to what his intent was when he included the clause was not admissible. Even assuming ambiguity existed, it should have been construed against Hartman as he was the one who selected the language and prepared the documents. See Security First Federal Savings and Loan Assn. v. Jarchin, 479 So. 2d 767 (Fla. 5th DCA 1985), review denied, 488 So. 2d 831 (Fla.1986).
The amended final judgment is accordingly reversed and this matter remanded for further proceedings consistent herewith.
REVERSED and REMANDED.
COBB and COWART, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Mellor v. Morton A. Goldberg, 658 So. 2d 1162 (Fla. 2d DCA 1995)…hat the property described herein securing said promissory notes shall at all times be the sole security for payment of all sums of principal and interest evidenced by said promissory notes and this mortgage deed. By contrast, in Thomas v. Hartman, 553 So. 2d 1256, 1257 (Fla. 5th DCA 1989), review denied, 564 So. 2d 1086 (Fla.1990), the Fifth District held that the following language in a purchase contract, note, and mortgage was not ambiguous and did not preclude a personal judgment on the note: The propert…
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Okeechobee Landfill, Inc. v. Republic Servs. OF Fla., 931 So. 2d 942 (Fla. 4th DCA 2006)…rees are not part of the Agreements and the decrees were not incorporated into the Agreements by reference: The decrees therefore constitute extrinsic evidence which cannot be considered to modify these unambiguous Agreements. See Thomas v. Hartman, 553 So. 2d 1256 (Fla. 5th DCA 1989). For these reasons, we réverse the summary final judgment entered in favor of Republic, remand to the circuit court, and direct it to enter summary judgment adopting the interpretation of the Agreements advanced by appellants —…
Authorities Cited
- Sec. First Fed. Sav. & Loan Ass'n v. Jarchin, 479 So. 2d 767 (Fla. 5th DCA 1985)
- Policastro v. Rudt, 180 So. 2d 472 (Fla. 2d DCA 1965)
- Sample v. Hundred Lakes Corp., 107 Fla. 568 (Fla. 1932)
- Heim v. Kirkland, 356 So. 2d 850 (Fla. 4th DCA 1978)