ROYAL FLAGG JONAS AND BARBARA JONAS, HIS WIFE, APPELLANTS,
v.
BAR-JAM CORP., A FLORIDA CORPORATION, APPELLEE
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The appellants sought a deficiency decree after foreclosing a second mortgage and purchasing the property at a nominal bid price. The court affirmed the trial court's denial of the deficiency decree, holding that the foreclosure bid price is not conclusive of property value when determining deficiency, and that equitable considerations—including the property's actual value and the mortgagee's discounted acquisition of the mortgage—support denial.
The foreclosure sale bid price is not conclusive or binding on the court regarding property value when considering a deficiency decree application. Equitable considerations, including the disparity between actual property value and the foreclosure bid, along with the mortgagee's discounted acquisition of the mortgage, may properly support denial of a deficiency decree.
“while the provision of § 702.02(5), Fla.Stat., F.S.A., making the bid price conclusive as to value on a mortgage foreclosure sale is useful for certain purposes such as determining the validity of the sale, it is not binding on the chancellor on the matter of value when considering an application for deficiency decree.”
Establishes that the statutory conclusiveness of bid price does not apply to deficiency determinations
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Join FLexlaw to unlock all legal intelligenceThe appellants acquired a $65,000 second mortgage by assignment for $32,500. They foreclosed on the mortgage and purchased the property at foreclosure…
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This appeal is taken by the plaintiffs below from an order of the chancellor denying their application for a deficiency decree in a mortgage foreclosure suit.
Plaintiffs foreclosed a $65,000 second mortgage on certain real estate. They had acquired the mortgage by assignment for a consideration of $32,500. On the foreclosure sale plaintiffs bought the property for $100, subject to a first mortgage debt of $57,500. The deficiency established on foreclosure sale was $72,014.05. On their •application for deficiency decree undisputed testimony fixed the value of the property at $135,000. Thus the value of the property .as acquired by plaintiffs on foreclosure sale was approximately $77,500 over and above the first mortgage.
On this appeal it is contended, first, that the amount of the bid at the foreclosure sale is conclusive of the value, and is binding on the court on the application for deficiency. Secondly, it is contended that there were no equitable considerations shown, other than the testimony as to excess value, to support a denial of deficiency decree.
The first contention made by appellants has been settled adversely to them by decisions holding that while the provision of § 702.02(5), Fla.Stat., F.S.A., making the bid price conclusive as to value on a mortgage foreclosure sale is useful for certain purposes such as determining the validity of the sale, it is not binding on the chancellor on the matter of value when considering an application for deficiency decree. Builders Finance Co., Inc., of St. Petersburg v. Ridgewood Home Sites, Inc., Fla.App.1963, 157 So.2d 551, cited and relied on by the chancellor in this case. Kurkjian v. Fish Carburetor Corporation, Fla.App.1962, 145 So.2d 523; Weinstein v. Park Manor Constr. Co., Fla.App.1964, 166 So.2d 842. In the Kurkjian case the first district court of appeal, speaking through Judge Rawls said:
“Plaintiff urges that the mortgage foreclosure sale held under the provisions of F.S. § 702.02, F.S.A., has become absolute by the clerk’s execution of a certificate of title and that the value of the mortgage property has been conclusively established by the amount bid at the foreclosure sale and may not be questioned on plaintiffs’ motion for a deficiency decree. As to the first portion of this point it may well be that the sale price, unless questioned within the time provided by law, is conclusively presumed to be adequate insofar as same is necessary to support the title of the property in the purchaser. However, we do not agree that the value of the property as established by a sale made pursuant to the statutory proceeding is so conclusively presumed as to bind the chancellor in the performance of his judicial duties pertaining to the entrance of a deficiency decree. * * * The basic equitable doctrines applicable to the chancellor’s discretion in determining the propriety of granting or refusing the entrance of a deficiency decree in mortgage foreclosure proceedings are founded upon the principle that he may properly inquire into all facts and circumstances, including the adequacy or inadequacy of the sales price, prior to entering his decree.”
In the instant case the evidence before the chancellor was that the property was worth $135,000, representing a net value (over the first mortgage) of approximately $77,500. A further equitable consideration disclosed on the record was that the $65,000 second mortgage which the plaintiffs foreclosed and which formed the basis for the deficiency, had been acquired by plaintiffs at a large discount, with the result that their investment and outlay of approximately $35,000 was less than half of the net value of the property which plaintiffs acquired on the foreclosure sale.
*481 Those showings were adequate to support the denial of the deficiency decree as a proper exercise of discretion, within the established rule that a denial of a deficiency decree must have the support of disclosed sufficient equitable considerations. See Carlson v. Becker, Fla.1950, 45 So.2d 116; Scheneman v. Barnett, Fla.1951, 53 So.2d 641; Kurkjian v. Fish Carburetor Corporation, supra; Weinstein v. Park Manor Constr. Co., supra.
Affirmed.
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Citator
Cited By (11 total)
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The Trs. OF Cent. States Se. & Sw. Areas v. Indico Corp., 401 So. 2d 904 (Fla. 1st DCA 1981)…ceedings are founded upon the principle that he may [*906] properly inquire into all facts and circumstances, including the adequacy or inadequacy of the sales price, prior to entering his decree. 145 So. 2d at 527. See also Jonas v. Bar-Jam Corp., 170 So. 2d 479 (Fla. 3d DCA 1965). As further noted in R. K. Cooper Construction Co. v. Fulton, 216 So. 2d 11 (Fla.1968), the trial court has the duty and discretion to inquire into the reasonable and fair market value of the property sold, adequacy of sale price…
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Spencer v. Am. Advisory Corp., 338 So. 2d 62 (Fla. 3d DCA 1976)…e instant case, the court finds from all the evidence that the value of the property recovered exceeds the amount of the final judgment of foreclosure, a deficiency judgment may be denied based upon the equities involved. Cf. Jonas v. Bar-Jam Corp., 170 So. 2d 479 (Fla. 3d DCA 1965); Maudo, Inc. v. Stein, 201 So. 2d 821 (Fla. 3d DCA 1967). ■ Plaintiffs’ third point claims error upon the refusal of the court to accept into evidence a showing of the amount of the ad valorem assessment upon the property. Also i…
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Fulton v. R. K. Cooper Constr. Co., 208 So. 2d 863 (Fla. 3d DCA 1967)…ate courts of this State. See Maudo, Inc. v. Stein, Fla.App.1965, 171 So. 2d 403; cert. den. Stein v. Maudo, Inc., Fla.1965, 179 So. 2d 213; Kurkjian v. Fish Carburetor Corporation, Fla.App.1962, 145 So. 2d 523; Jonas v. Bar-Gam Corp., Fla.App.1965, 170 So. 2d 479. It is possible that there is a conflict between the holding of the District Court of Appeal, Second District, and the holdings in Southern Realty & Util. Corp. v. Belmont Mtg. Corp., supra, and Penn. Mut. Life Ins. Co. v. Moscovitz, supra. If this…
Previewing 3 of 11 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Carlson v. Becker, 45 So.2d 116 (Fla. 1950)
- Kurkjian v. Fish Carburetor Corp., 145 So. 2d 523 (Fla. 1st DCA 1962)
- Scheneman v. Barnett, 53 So. 2d 641 (Fla. 1951)
- Builders Fin. Co., Inc. v. Ridgewood Homesites, Inc., 157 So. 2d 551 (Fla. 2d DCA 1963)
- Fla. E. Coast R.R. Co. v. Jones, 166 So. 2d 842 (Fla. 2d DCA 1964)
- Weinstein v. Park Manor Constr. Co., Inc., 166 So. 2d 842 (Fla. 2d DCA 1964)