Clark v. Fullerton , 130 Fla. 150 ( 1937 )

This is an appeal from a final decree and subsequent deficiency decree and from an order overruling a motion to vacate and set aside said deficiency decree, rendered in a mortgage foreclosure proceeding against the executor of the deceased mortgagor.

After the foreclosure sale had been reported to the court, an order confirming the foreclosure sale was entered, in which order a deficiency judgment was entered against the executor of the deceased mortgagor and against his estate for a considerable amount and an execution ordered issued thereon as at law, without any adjudication in the final decree that the executor or the estate was liable for the debt secured by the mortgage in such sort as would authorize a deficiency decree against the executor of the estate. The only definite adjudication was that the plaintiff had a superior lien on the property described in the mortgage, and was entitled to the relief prayed. Indeed there is no language in the final decree, nor in the deficiency judgment, from which it could be implied that it had been made to appear that proof of claim of the debt secured by the mortgage had been duly sworn to and presented to the County Judge of the county granting the letters testamentary on the estate as required by Section 2, Chapter 11994, of the Laws of 1927, being Section 5599-6500 C.G.L., of 1937, or that due presentation of said claim has been waived by such executor.

While a failure to present and file proof of claim as required by the statute does not affect the lien of a duly recorded mortgage of real property and the right to foreclose the same, the statute does expressly provide that such failure shall bar the right of enforcement of personal liability against the estate of the decedent.

The deceased mortgagor died on September 25, 1929, and the plaintiff in error shortly thereafter qualified as executor under the will. Appellee filed his bill to foreclose in July, 1934. So the statute above referred to was applicable. That statute provides that "no claims or demands shall be valid or binding upon an estate, or the executor or the administrator thereof, unless the same shall be duly sworn to and presented to the County Judge of the county granting letters testamentary or of administration on an estate, at his office in the Court House of said county" and that any claims or demands not so presented within twelve months from the time of the first publication of notice provided for in Section 5597 C.G.L., shall be barred; provided, however, that the lien of a duly recorded mortgage of real property and the right to foreclose the same shall not be affected by failure to so present the same, but in such a case the right to the enforcement of personal liability against the estate shall be barred, by reason of such failure to comply with the statute.

While the transcript before us is rather meagre and does not set forth the pleadings and evidence in the case, enough appears to convince us that the deficiency decree and order overruling the motion to vacate the same should be reversed and the cause remanded for reconsideration and readjudication by the Chancellor in the light of two recent decisions by this court, viz.: Smith v. Fechheimer, 124 Fla. 757, 169 So. 395, and Jefferson Standard Life Ins. Co. v. Lovera, not yet reported, both of which were handed down subsequent to the decrees rendered herein by the trial court.

The later statute, Section 120 of Chapter 16103 of the Acts of 1933, known as the Probate Act, is not involved here, as it was not in effect at the time of the death of the decedent or the qualification of his executor, but even if it had been in effect at that time, it would have been of little comfort to the appellee.

There was no authority for that part of the deficiency decree ordering that the plaintiff have execution thereof against the executor and the estate of the deceased mortgagor "or at law." In this connection Section 2216, Vol. 3, of Jones on Mortgages, 8th Ed., is interesting, and to some extent applicable here:

"Upon the decease of the mortgagor, though the administrator or executor be a party to the bill, no binding judgment can be entered against him for any deficiency remaining after application of the proceeds of sale. A claim for the deficiency must be presented under the proceedings for the administration of the estate. The suit can be prosecuted against the executor or administrator only for the purpose of reaching the property and subjecting it to sale, or for determining the amount of the deficiency. A judgment for deficiency may be essential as the basis of a subsequent proceeding to enforce payment from the estate. ``If the court can render a judgment and order execution against the property of the deceased in the hands of the administrator, the mortgagee first foreclosing would in effect get priority of payment out of the estate, not only as against general creditors, but as against all mortgagees later in foreclosing, though in the same class of creditors. If no judgment for a deficiency is taken, and no claim is made upon the estate of the deceased mortgagor, the demand is barred at the expiration of the time allowed for enforcing debts against the estate, and the administrator cannot afterward obtain leave to sell land for the payment of such debt.'"

It appears by stipulation in the transcript that two cases are involved in this appeal. These cases are between the same parties and involve the same questions. One of these cases was Chancery Cause No. 16173, the case here under consideration, and the other is Chancery Cause No. 16172. The stipulation is that the judgment in the one case shall apply also to the other.

For the reasons above stated the deficiency decree and the order denying the motion to vacate the same, here under consideration, must be reversed and the cause remanded for further appropriate proceedings consistent with the foregoing opinion, as well as with the two recent opinions and decisions of this court hereinabove referred to.

Reversed and remanded.

ELLIS, C.J., and WHITFIELD, TERRELL, BROWN, BUFORD, and DAVIS, J.J., concur.

ON REHEARING