Federal Land Bank of Columbia v. Dekle

On the 16th day of February, 1920, Pennington Evans, a partnership, by the joint action of both parties joined by their wives, executed a purchase money mortgage to J. C. Sims, securing three notes of $2,500.00 each, or a total purchase price of $7,500.00. May 15, 1920, Pennington and Evans, by it partner, C. R. Evans, executed a second mortgage to Helen K. Dekle securing a note in the sum of $4,000.000 and describing the identical lands described in the mortgage of February 16, 1920, to Sims. Helen K. Dekle was a sister-in-law of Evans, was living in the same house with him, but did not record her mortgage till March 7, 1927, almost seven years after its execution. Sims recorded his mortgage promptly.

On June 16, 1927, C. R. Evans and wife executed their mortgage to The Federal Land Bank of Columbia in the sum of $7,500.00. This mortgage described the same lands as were described in the Sims and Dekle mortgages plus 240 acres additional lands. In his application for the loan secured by this mortgage, said application being dated August 3, 1926, Evans represented and guaranteed that the mortgage to J. C. Sims for $5,000.00 and the one to Henry Sims for $1,100.00 were the only liens, claims or encumbrances outstanding against the said lands. He also represented that the $7,500.00 loan was to be used to pay these mortgages and that the Federal Lank Bank of Columbia should a first lien on the lands mortgaged to secure said loan. The loan was made to Evans on these representations which were followed by an abstract of title and opinion of attorneys furnished by him, but none of these showed the existence of the Dekle mortgage, which was, however, secured by Evans and placed on record after he furnished the abstract, but before he secured the loan. *Page 557

In April, 1930, Evans having defaulted in his payments on the mortgage to The Federal Land Bank of Columbia, the said bank brought its suit to foreclose. The mortgage of Helen K. Dekle, not appearing on record, she was made a party to this suit which was prosecuted to final decree of foreclosure, but before sale could be made, that is to say, on the 4th day of August, 1930, Helen K. Dekle, as complainant, instituted suit against the Federal Land Bank of Columbia and Pennington Evans to foreclose her mortgage of May 15, 1920. To the bill of complaint of Helen K. Dekle, Pennington Evans filed their answer admitting the material allegations thereof. The Federal Land Bank also answered the said bill challenging the validity of the mortgage of Helen K. Dekle for various irregularities and set up the further defense of its right to be subrogated to the rights of J. C. Sims in and to the mortgage of February 16, 1920. A demurrer to portions of the answer of The Federal Land Bank of Columbia was sustained, testimony was taken and a final decree was entered in favor of Helen K. Dekle. This appeal is from that final decree.

The effect of the final decree was to raise the mortgage of Helen K. Dekle from a second to a first mortgage, to hold it valid and superior to the mortgage of The Federal Land Bank and to give her a lien on all the lands embraced in her mortgage including other lands which did not appear in said mortgage as recorded. It further directed a sale of the lands to pay the amount due her in full and required the surplus to be applied on the mortgage of the Federal Land Bank of Columbia until it should be satisfied.

The first question brought here for our consideration is whether or not, under the facts stated, The Federal Land Bank of Columbia had a right to subrogation to all the rights, title and interest of J. C. Sims in his mortgage of February 16, 1920. *Page 558

The controlling law and facts in this case, as to the right of appellant to subrogation, are similar to and are controlled by the decision of this Court in The Federal Land Bank of Columbia v. W. B. Godwin, et al., filed January 9th, 1933. The same guaranty was given the bank, the same precaution was taken by it and the same fraud and deception were practice on it. The judgment below as to the right of appellant to subrogation to the amount of the Sims mortgages, $6,100, is, therefore, reversed on authority of that case.

It is next contended that the description of the lands in the Dekle mortgage is fatally defective in that they are referred to as being in Calhoun County while in fact they are in Jackson County, Florida.

If the description had been by metes and bounds there might be merit to this contention, but since it is by the usual government surveys and subdivisions, it is without merit. The reference to Calhoun County is general while the description by government surveys is specific and is sufficient to put appellant on notice as to what lands were referred to. The description also furnishes ample information by which a surveyor could locate the lands and that is all that the law requires. Black v. Skinner Manufacturing Company, 53 Fla. 1090,43 So.2d 919; Ausley v. Graham, 73 Fla. 388, 74 So.2d 505; Bank of South Jacksonville v. Cammar, 89 Fla. 296, 103 So.2d 827.

The third question challenges the sufficiency of the acknowledgment of the execution of the Dekle mortgage.

The acknowledgment was made by C. R. Evans for the partnership of Pennington Evans and is as follows:

"STATE OF FLORIDA,

"COUNTY OF JACKSON.

"I hereby certify that on this the 15th day of May, 1920, before me personally appeared C. R. Evans, General Manager *Page 559 of Pennington Evans * * * to me well known to be the individuals described in and who executed the foregoing conveyance to H. K. Dekle and severally acknowledged the execution to be their free act and deed for the uses and purposes therein mentioned."

The rule in this State is that an instrument executed by one member of a partnership in the firm's name and legally binding on the partnership and entitled to be recorded under the registry statute of Florida may be admitted to record on the acknowledgment of the partner who executed it. McCoy v. Boley,21 Fla. 803; Summer v. Mitchell, 29 Fla. 129, 10 So.2d 562. Under this rule the acknowledgment was sufficient.

The concluding question brought up for our consideration challenges the sufficiency of the record of the Dekle mortgage, it appearing that the said mortgage described the lands as "all the N 1/2 of Sec. 1, Township 3, north of Range 10 West" while the record of the mortgage described said lands as "all of the W 1/2 of Sec. 1, Township 3, North, Range 10 West," otherwise the descriptions were identical. The recorder, in other words, confused "N" with "W," the result of which was to leave the NE 1/4 of the section out of the mortgage as recorded, but which was included in the mortgage as executed. It is contended that inasmuch as the record of the mortgage contained this omission, The Federal Land Bank was without actual or constructive notice that said described lands were included in the Dekle mortgage and that consequently its mortgage was superior to the Dekle mortgage as to said lands.

There might be merit in this contention except for Section 3820 R. G. S. of 1920; Section 5708 C. G. L. of 1827. In states with statutes like this it is generally held that constructive notice of the subject matter of the instrument takes place from the date it is placed with the recording *Page 560 officer to be recorded and that the efficacy of such notice will not be destroyed if errors are made in the recording. Jones Law of Mortgages on Real Property (8th Ed.), Section 636, 41 C. J. 567, Section 525. Other assignments have been examined, but a discussion of them would serve no useful purpose.

It follows that the judgment below as to subrogation is reversed, otherwise is is affirmed.

Reversed in part, affirmed in part.

DAVIS, C. J., and WHITFIELD, J., concur.

BROWN, J., concurs specially.

BUFORD, J., dissents.