MAUDO, INC., A FLORIDA CORPORATION, APPELLANT,
v.
ISIDOR STEIN AND ROSE STEIN, HIS WIFE, JACK STEIN AND THELMA STEIN, HIS WIFE, APPELLEES
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Maudo, Inc. borrowed $73,803 secured by a purchase-money mortgage held by the Steins. After default and foreclosure where the property was bid in for $500, the Steins sued on the note itself rather than seeking a deficiency decree. The court must consider the property's actual value and equitable defenses when determining judgment on a mortgage note claim, not merely the foreclosure sale price.
Yes, in a law action on a mortgage note following foreclosure, the trial court must consider the fair market value of the property and equitable defenses when determining the judgment amount, not merely the amount bid at the foreclosure sale. Equitable considerations that limit deficiency awards in equity proceedings apply equally in law actions on mortgage notes.
“the chancellor is not bound by the amount bid at the public auction when determining the amount of a deficiency decree, and that he may take into consideration the value of the property as well as other equitable considerations”
Establishes the principle that fair market value, not just sale price, must be considered in deficiency matters
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Join FLexlaw to unlock all legal intelligenceAppellant Maudo, Inc. was the maker of a $73,803 note secured by a purchase-money mortgage held by appellees (the Steins). Maudo defaulted on the paym…
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Appellant is the maker of a note in the sum of $73,803 which was secured by a purchase-money mortgage of which the ap-pellee is owner and holder. Upon default in the payments on the obligations, appel-lee instituted successful foreclosure proceedings. Whereupon the appellee reac*404quired the property by bidding it1 in at the court ordered sale for $500. The appel-lee did not request a deficiency decree in the foreclosure proceedings, but instituted the instant legal proceedings seeking to recover on the note.
Subsequent to hearing, the court granted final judgment in the plaintiff-mortgagee’s favor for the face amount of the note plus interest and attorney’s fees less the $500 bid on the property at the foreclosure. At the hearing, evidence was introduced to the effect that the property in question was valued from at least $82,000 to as much as $120,000.
The appellant urges for reversal the trial judge’s failure to take into consideration for purposes of determining the amount of judgment, the value of the property. In a recent case,2 this court ruled that the chancellor is not bound by the amount bid at the public auction when determining the amount of a deficiency decree, and that he may take into consideration the value of the property as well as other equitable considerations. The Jonas case, supra, was concerned with a proceeding in equity for a deficiency decree while our case is one at law on the note, but the same result should obtain, especially in view of this court’s language in Frank v. Levine, Fla.App.1964, 159 So.2d 665, 666:
"However, equitable defenses may be pleaded in law actions (rule 1.8(g), Fla.R.C.P., 30 F.S.A.), and there would appear to be no reason why equitable considerations sufficient to limit a deficiency award in equity should not serve equally when pleaded and proved in an action at law to recover a mortgage foreclosure sale deficiency.”
What was said above is equally applicable in regal'd to a suit at law on the mortgage note, where the mortgage has already been foreclosed. In the instant case, the trial court did not take the equitable defenses into consideration in determining the amount of recovery. He should have considered the value of the property, and those other equitable considerations "presented by appellant.
Accordingly, the judgment is reversed and remanded for a new trial at which time the trial court may reconsider the evidence in regard to the value of the property and may take other evidence in order to determine the proper award of damages.
Reversed and remanded.
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Mandell v. Fortenberry, 290 So. 2d 3 (Fla. 1974)…; Etter v. State Bank, 1918, 76 Fla. 203, 79 So. 724; Mabson v. Christ, 1938, 96 Fla. 756, 119 So. 131; Grace v. Hendricks, supra; Builders Finance Co. v. Ridgewood Homesites, Inc., Fla.App. 1963, 157 So. 2d 551; Maudo, Inc. v. Stein, Fla. App.1965, 171 So. 2d 403; Frumkes v. Mortgage Guarantee Corp., Fla.App.1963, 173 So. 2d 738; Matlack v. Owen, Fla. App. 1966, 181 So. 2d 602. The majority opinion begs the question of the rights of Petitioners as deficiency judgment debtors. It does not directly agree with…
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Fulton v. R. K. Cooper Constr. Co., 208 So. 2d 863 (Fla. 3d DCA 1967)…foreclosure sale does not conclusively establish the market value of the property for the purposes of the deficiency decree. This view of the law has been often set forth by the appellate 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…
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Maudo, Inc. v. Isidor Stein and Rose Stein, 201 So. 2d 821 (Fla. 3d DCA 1967)…d judicial discretion of the court. Larsen v. Allocca, Fla.App.1966, 187 So. 2d 903; Section 702.06, Florida Statutes, F. S.A. We do not find a clear abuse of sound judicial discretion in the case sub judice. See Maudo, Inc. v. Stein, Fla.App. 1965, 171 So. 2d 403. Maudo claims reversible error was committed when the court refused to admit into evidence pictures of a condominium on a similar lot across the street. Their real estate expert was permitted to testify fully as to the sales price of $57,500 for th…1 / 2
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Royal Flagg Jonas and Barbara Jonas v. Bar-Jam Corp., 170 So. 2d 479 (Fla. 3d DCA 1965)
- Frank v. Hy Levine, 159 So. 2d 665 (Fla. 3d DCA 1964)