JOHN W. WILE, ET AL.,
v.
HERNANDO DEVELOPMENT CO.
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This case addresses whether defendants in a mortgage foreclosure suit can raise equitable defenses based on allegations that the nominal mortgagee is a straw party concealing the real owners and that the real owners conspired to withhold foreclosure until the property value depreciated. The Florida Supreme Court held that such defenses are insufficient to bar foreclosure when the mortgage assignments appear regular and the contract does not clearly condition forbearance on the second mortgagee's agreement.
The court affirmed the trial court's order striking the amended answers. Even if proven, such allegations would not constitute a valid equitable defense to foreclosure because the mortgage assignments were regular and valid, the mortgage was always subject to foreclosure, and the contract did not indicate it was given in consideration of forbearance to foreclose the second mortgage.
“Ordinarily allegations of this character, if proven, would be a good defense to a bill to foreclose but in this case all assignments of the first mortgage appear to have been regular and for a valuable consideration, the first mortgage was still alive and subject to foreclosure at any time.”
Establishes that while fraud and conspiracy allegations could theoretically be equitable defenses, they fail here because the mortgage was validly assigned and always remained enforceable.
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Join FLexlaw to unlock all legal intelligenceIn December 1923, Wile executed promissory notes totaling $64,680 secured by a purchase money mortgage on Pasco County lands. The mortgaged property w…
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In December, 1923, John W. Wile executed in favor of W. B. Conoly and Company five promissory notes aggregating $64,680.00, all of s'aid notes being secured by a purchase money mortgage describing lands in Pasco County and bearing the date of the notes. In April, 1924, Wile conveyed his interest in the lands covered by the mortgage, to Florida Heights Corporation which assumed and agreed to pay the said mortgage and notes. In April, 1925, Florida Heights Corporation in turn, conveyed its interest in the said lands to Hernando Plantation Company which also assumed and agreed to pay the said mortgage and notes. In September, 1930, the s’aid notes and mortgage were assigned by W. B. Conoly and Company to Hernando Development Company. In November, 1930, Hernando Development Company brought this suit to foreclose, making John W. Wile, Florida Heights Corporation, Hernando Plantation Company, and E. G. Upson parties defendant. Decrees pro confesso were entered against Wile and Hernando Plantation Compiany. Florida Heights' Cor-poration and E. G. Upson, each filed a separate answer which was later amended and both amended answers were stricken on motion of complainant. Decree pro confesso was then entered against Florida Heights Corporation and E. G. Upson, the caus'e proceeded to final decree, sale was made and confirmed, Master’s Deed was executed to the purchaser, and this appeal was taken from the order striking the separate amended answers of Florida Heights Corporation and E. G. Upson.
Numerous' assignments are argued, but the controlling *786question we are called on to decide is whether or not the Chancellor erred in striking the amended answers of Florida Heights Corporation and E. G. Upson.
The pertinent part of the amended answers in effect alleges that John Zeman, Lidwig Novemesky, Emery A. Jecusko, Paul Vaclavek, and Joseph Sas'tinsky are the real owners of the mortgage sought to be foreclosed, that Hernando Development Company, the complainant, is a mere pretended owner created for the purpose of foreclosing the mortgage but has no real interest therein. They further allege that Florida Heights Corporation and E. G. Upson were the owners of the s'econd mortgages covering the same lands as those described in the first mortgage sought to be foreclosed, that Florida Heights Corporation was threatening to foreclose its second mortgage but withheld s'aid foreclosure proceedings on the representation of the- real owners as above enumerated, that they were paying off the mortgage sought to be foreclosed and that they would continue so to do; that at the time of such representation the property described in the mortgage foreclosed was worth more than the amount of the first mortgage against it but that since that time it has depreciated in value; that said representations were made for the purpose of deceiving E. G. Ups'on and the Florida Heights Corporation, and that the real owners knew at that time and had conspired together to postpone the foreclosure of said mortgage in order that if the lands did decrease in value they could later foreclose the first mortgage and get the property.
Ordinarily allegations of this character, if proven, would be a good defense to a bill to foreclose but in this' case all assignments of the first mortgage appear to have been regular and for a valuable consideration, the first mortgage was still alive and subject to foreclosure at any time. Fore*787closure of the second mortgage of appellants would have been subject to the rights of the owner of the first mortgage. The contract relied on to support appellants’ contention in no wise indicates that it was given in consideration of forbearance to foreclose the second mortgage but on the other hand on its face it purports' to be a straight agreement to purchase. If this interpretation is correct it is not a subject of equitable cognizance but is one on which recovery must be sought through a court of law. Only ten months elapsed from the date of the contract to the date the foreclosure suit was' instituted.
If these observations are correct and appellants had no other challenge there is no defense they could have interposed'to the suit to foreclose the first mortgage. It therefore follows that the judgment of the Chancellor below must be and is hereby affirmed.
Affirmed.
Whitfield, Terrell, Brown and Buford, J. J., concur.
Davis, C. J., concurs specially.
(concurring). — My view is that the answer setting up the fact that the nominal complainant was not the real owner of the mortgage but a mere “dummy” assignee' was properly held insufficient as a defense because it failed to allege any facts' that would have constituted an equitable bar to the right of alleged assignors to foreclose, had such alleged assignors themselves been made the complainants in this case. The representations alleged to have been made by the alleged true owners of the mortgage sought to be foreclosed by the proceeding do not appear to rise to the dignity of an equitable estoppel against the right to foreclose the mortgage here involved, as I construe them, therefore I concur in the affirmance.
Davis, C. J.
(concurring). — My view is that the answer setting up the fact that the nominal complainant was not the real owner of the mortgage but a mere “dummy” assignee' was properly held insufficient as a defense because it failed to allege any facts' that would have constituted an equitable bar to the right of alleged assignors to foreclose, had such alleged assignors themselves been made the complainants in this case. The representations alleged to have been made by the alleged true owners of the mortgage sought to be foreclosed by the proceeding do not appear to rise to the dignity of an equitable estoppel against the right to foreclose the mortgage here involved, as I construe them, therefore I concur in the affirmance.