ALROPA CORPORATION
v.
ALBERT MCNAMEE
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Alropa Corporation sued to enforce a mortgage covenant requiring payment of promissory notes. The Florida Supreme Court affirmed dismissal, holding that a covenant to pay sums 'payable by virtue of' the notes creates only a conditional obligation tied to the notes' enforceability, and when the underlying notes are barred by the statute of limitations, the covenant cannot be enforced.
The court held that such a covenant is not an independent unconditional agreement to pay but rather an agreement to be bound only as far as the notes themselves would bind the makers. Therefore, any defense applicable to the notes—including the statute of limitations—constitutes a defense against enforcement of the covenant.
“This was not sufficient to constitute an unconditional independent covenant to pay the debt but was a covenant to pay such sums as might be required to be paid under the terms of the notes. In other words, this covenant was an agreement to be bound as far as the notes would bind the makers. Therefore, any defense applicable to the note would constitute a defense against the enforcement of this covenant.”
Establishes the core holding that conditional covenants incorporate defenses of the underlying notes
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Join FLexlaw to unlock all legal intelligenceAlropa Corporation filed suit on a mortgage covenant that required payment of principal, interest, and other sums 'payable by virtue of the said promi…
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Plaintiff in error filed suit in the Circuit Court in and for Okeechobee County and based his cause of 'action on a covenant contained in a mortgage as follows: “To pay all and singular the principal and interest and other *786sums of money payable by virtue of the said promissory notes and this deed, or either, promptly on the days respectively the same severally become due.”
He attached to his declaration and made a part thereof copies of the notes which the mortgage was given to secure. The notes were dated March 12, 1925, were three (3) in number, were for $200.00 each and were due, respectively, one, two, and three years after date. They were not under seal.
Demurrer to the declaration was sustained and judgment entered thereupon for defendant.
It will be observed that by the covenant relied upon the makers did not unconditionally promise ‘to pay the debt evidenced by the note but the promise was to pay all and singular the principal and interest and other sums of money payable by virtue of the said promissory notes and this deed, or either.” (Emphasis supplied.)
This was not sufficient to constitute an unconditional independent covenant to pay the debt but was a covenant to pay such sums as might be required to be paid under the terms of the notes. In other words, this covenant was an agreement to be bound as far as the notes would bind the makers. Therefore, any defense applicable to the note would constitute a defense against the enforcement of this covenant.
The declaration shows on its face that the notes were barred by the statute of limitations. s
While the lien of the mortgage is enforceable to apply to payment of the debt which exists though the mortgage may not be enforceable because the mortgage creates a lien for that purpose it does not follow that the debt is collectible by virtue of the notes.
Where plaintiff sues at law on a covenant such as we have here the declaration must show by apt allegations that *787the debt is collectible by virtue of the notes mentioned in the covenant. The declaration here does not so allege.
In the case of Wilson v. Smith, 124 Fla. 371, 168 Sou. 814, we had under consideration a different covenant. There the covenant was:
“The parties of the first part do covenant and agree that the said Ruth M. Wisdom is the owner of the above described personal property and that they will pay or cause to be paid the indebtedness secured by this instrument according to the true tenor and effect of the promissory note above described,- or of any renewal notes, and should it become necessary to collect such indebtedness through or by an attorney, that they will pay all costs of such collection, including a reasonable attorney’s fees.”
This was an independent unconditional agreement to pay the indebtedness secured by the mortgage and was more than an agreement to pay “sums of money payable by virtue of said promissory notes and this deed, or either.”
In the case of Bank of Wildwood v. Kerl, et al., 138 Fla. 527, 189 Sou. 866, we had under consideration a case in which the record showed that the notes given to secure the mortgage were barred by the statute of limitations and the covenant relied on contained in the mortgage was identical with the covenant involved in the present suit, and there we held:
“A covenant within a mortgage under seal providing that mortgagor would pay sums payable by virtue of note secured by mortgage was not sufficient to bind mortgagor personally for the debt; and hence, if note, which- was not under seal, was barred by five-year statute of limitations, a deficiency judgment could not be entered against mortgagor in foreclosure proceedings. (Comp. Gen. Laws 1927, Sec. 4663, Subd. 3).”
*788We deem it unnecessary to cite cases from other jurisdictions because the point at issue appears to have been settled by opinions and judgments of this Court and on authority of the opinion and judgment in the case of Bank of Wildwood v. Kerl, et al., supra, the judgment is affirmed.
So ordered.
Affirmed.
Terrell, C. J., Whitfield and Chapman, J. J., concur.
Thomas, J., agrees to judgment.
Justice Brown not participating as authorized by Section 4687, Compiled General Laws of 1927, and Rule 21-A of the Rules of this Court.
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2765 S. Bayshore Drive Corp. v. Fred Howland, Inc., 212 So. 2d 911 (Fla. 3d DCA 1968)…Company, and although the said Contract Bond is found by the Court to be an instrument under seal, and since it is the Court’s view that the execution of the Contract Bond does not extend the Limitations period, (see Alropa Corporation vs. McNamee [143 Fla. 785], 197 So. 514), and for that reason the Plaintiff’s Motion for leave to file [a] second amended complaint will be denied, and for the reasons hereinabove stated the defendant, Fred Howland, Inc., is entitled to a Summary Judgment, it is “Adjudged a…
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Swanson v. Bennett, 157 Fla. 113 (Fla. 1946)…eclaration on the ground that the cause of action was barred by the five-year statute of limitations applicable to contracts and notes not under seal. The demurrers were sustained by the trial judge on the authority of Alropa Corporation v. McNamee, 143 Fla. 785, 197 So. 514; and the plaintiff declining to plead further, final judgment was entered. The plaintiff has taken an appeal from the judgment. We think that it is the generally accepted rule that if a mortgage contains a personal covenant whereby the…1 / 2
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Layton v. BAY Lake Ltd. P'ship & United Bank & Tr., 818 So. 2d 552 (Fla. 2d DCA 2002)…hat the mortgage contained an independent promise to pay the debt. They suggest that without the independent promise to pay, the mortgage is subject to the same defenses as is the note. In support of that argument, they cite Alropa Corp. v. McNamee, 143 Fla. 785, 197 So. 514 (1940). We need not determine whether the trial court’s reading of the mortgage provision was correct. The Alropa court was dealing with a deficiency judgment, not the enforcement of the mortgage lien. Id. [*554] Accordingly, even if t…
Previewing 3 of 6 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Bank of Wildwood v. Kerl, 138 Fla. 527 (Fla. 1939)
- Wisdom v. Smith, 124 Fla. 371 (Fla. 1936)