Peninsular Naval Stores Co. v. Cox , 57 Fla. 505 ( 1909 )

Hocker, J.

(after stating the facts.) — Fo:ur assignments of error are presented here, vis: First, that the court erred in its order of May 29th, 1908, in not granting the injunction restraining the sale of portions of the mortgaged property described in the bill; second, that the court erred in granting the application of Lazarus B. Varn, a stranger to the cause, to be made a party defendant; third, that the court erred in not granting the motion of appellant ('complainant below) to vacate the order granting the application of L. B. Varn to b&made a party defendant in the cause; and, fourth, that the court erred in refusing to grant appellant’s application for a decree pro confesso' against Weil & Company and Frank & Company. The first assignment is 'not before us for consideration in as much as there is no- appeal from, the order denying an injunction.

The record shows that a lis pendens notice was filed by the appellant and recorded in the Clerk’s office of Hernando county at io 42 o’clock A. M. on June 1st, 1908. The sale of the mortgaged property was under the law made after that time (see section 1632 General Statutes of 1906). It is not contended in Varn’s- petition that the lis -pendens notice was not filed and recorded as stated in the record. Our statute provides for a lis pendens notice and the record thereof. The sections of the General Statutes of 1906 relating to this subject are as follows:

“1649. (1220.) — No suit at law or in equity shall operate as a lis pendens as to- any property involved therein until there shall have been filed in the office of the clerk of the Circuit Court of the county -where the property is situated, and shall have been recorded by him in a book to- be kept by him. for the purpose, a notice of the institution of such suit, containing the names of the parties, the time of the institution of the suit, the name of the court in which it is pending, a description of the property involved, and a statement of the relief sought as to such property.”

“1831. (1390) * * * A Lis Pendens Docket, in which shall be recorded all notices of lis pendens.” * * *

The statute does no-t define the effect of a lis pendens notice when it has been filed and recorded. The effect of such a notice we are left to- discover from the general law on the subject. Where such a notice is filed and recorded, the -suit operates as a lis pendens, and its effeet is to put every one on notice of the suit, and a purchaser of the property involved, or of any interest therein of the parties defendant in the suit does so at his peril. He takes the risk of the result of the suit and is concluded by the judgment or decree therein, and it is not necessary that such a purchaser should be made a party thereto. Lenders v. Thomas, 35 Fla. 518, 17 South. Rep. 633; Elizabeth Cordage Co. v. Whitlock, 37 Fla. 190, 20 South. Rep. 255; Wiltsie on Mortgage Foreclosure, §§302, 303, 306, 312. It is said that such a notice is as efficient against a valid transfer or incumbrance of the property described in it as an injunction would be, and that such a notice binds all parties to the action together with all purchasers from them, and all parties claiming under them subsequently to the filing of the same. All who are in privity with the parties to the action will also be bound. Wiltsie on Mortgage Foreclosure §§130, 131 303 supra. It is also said to apply to purchasers of the property at judicial sales had on execution of judgments or decrees in favor of persons whose interests thus sold are affected by lis pendens. 21 Am. & Eng. Ency. Law (2nd ed.) pp. 645-646. See also 15 Ency. Pl. & Pr. 598. To entitle a party to filé a bill in equity to remove or prevent a cloud upon the title to real estate he must be the owner of either the legal or equitable title of said-property. Levy v. Ladd, 35 Fla. 391, 17 South. Rep. 635; 6 Am. & Eng. Ency. Law (2nd ed.) 156. A mortgagee under our statute is neither. He simply has a lien which he may enforce in equity. Section 2495 General Statutes of 1906; Coe v. Finlayson, 41 Fla. 169, 26 South. Rep. 704. It seems al-so to be the law that the interest of the mortgagor -may be levied on and sold under execution. Section 1638 General Statutes of 1906; 11 Am. & Eng. Ency. Law (2nd ed.) 635.

The sheriff’s deeds accompanying his petition show Yarn to be the purchaser of lands sold at the execution sales, and that is all the legal evidence there is in the record of his interest in the property in litigation, except an affidavit filed by him on the 26th day of October, 1908, in which he states that the judgments of Weil & Company and Frank & Company had been assigned to- him on the nth day of August, 1908.

In the case of Doke v. Williams, 45 Fla. 248, 34 South. Rep. 569, this court 'held: “the general rule is that a complainant in equity cannot be compelled upon the application of a third party to make him a defendant to the bill. This is particularly true where the bill contains no allegations which connect such third person with the subject matter of the litigation.. In cases demanding it third persons interested in the subject matter of litigation. in chancery may present their claims to the court for adjudication, but it should be by'an appropriate bill and not by petition. Beneficiaries of a- trust when the trustee is a party,-and those having an interest in a fund in the custody of the court may, however, intervene by petition.” In the case of Foster v. Deacon, Maddock and Geldart 59, it was decided by the Vice Chancellor that the assignee for a valuable consideration of the unascertained interest of Deacon and wife in the suit could not be permitted to- take part in a suit as a party defendant though he might do so by supplemental bill. In the case of Bozon v. Bollard, 5 Eng. Ch. Rep. 69, it was held that when a person not a party to the suit is interested in a question, and appears by counsel and submits to be bound by the decision, the court will not'hear him without the consent of the other parties to- the suit. In the case of Coleman v. Martin, 6 Blatchf. 119, and in the case of Drake v. Goodridge, Id. 151, it was held by Judge Blatchford that no such practice is shown in equity as making a person a defendant to a suit on his own application, ¡but this rule was limited to suits in personam, and held not applicable to suits in rem. In the latter case it was held “in a suit in rem where the court has jurisdiction over the res, and its decree affects the interest in' the res of all persons who have an interest in the res, a person who has a lien or claim upon, or interest in the res, is allowed to intervene, and be heard for his own interest .in the res.” p. 120 Id; Krippendorf v. Hyde, 110 U. S. 276, text 282, 4 Sup. Ct. Rep. 27; 1 Daniel’s Chan. Prac. (6th Am. Ed.) star pp. 287, 288 and notes. But the foregoing doctrine does not seem to be applicable to the case of incumbrancers or purchasers of real estate becoming such after a bill has been filed and a lis pendens notice given. Such purchasers and incumbrancers will be bound by the decree and need not be made parties, whether the complainant has notice' of them or not, “for,” it is said in 1 Daniel’s Chan. Prac. star page 280, “an alienation pending a suit is void, or rather voidable. If therefore after a bill filed by the first mortgagee to foreclose the mortgagor confesses a judgment executes a second mortgage, or assigns the equity of redemption the plaintiff need not make the incumbrancee, mortgagee or assignee parties; for they will be bound by the suit, and can only have the benefit of a title so 'gained by filing an original bill in the nature of a cross-bill to redeem the mortgaged property.” From' a consideration of these and other authorities we are of opinion that the court erred in granting the petition of Varn tó be made a party defendant to the bill in the place of Weil & Company and Frank & Company. The order was made on the petition of Varn. No notice of the application of Varn or of the hearing was given the complainant. The purchase of the land and the assignments of the judgments all occurred pendente lite. If Varn under the circumstances is entitled to appear as a party defendant, then any assignee of his would also' be entitled to appear, and the litigation could be protracted without end. It follows that the court should also- have granted -the application of complainant to vacate the order permitting Varn to be made a party defendant. This brings us to a consideration of the fourth ánd remaining assignment of error that the court erred in refusing to. grant a decree pro confesso against Weil & Company and Frank & Company.

The court below in refusing the application for a decree pro confesso proceeded on the theory that Varn was by the order making him a party entirely substituted for the defendants. Weil & Company and Frank & Company. On that theory Weil & Company and Frank & Company were not in default. We think that theory was wrong. The order of the court substituting Varn did not dismiss Weil & Company or Frank & Company as defendants in the case. They had made ho application’to be dismissed and discharged. No notice was givfen the complainants of Varn’s application and no consent thereto of Weil & Company and Frank & Company is shown. We think the order made thereon was erroneous. Blit we do not think it can be said' to have been void, for the court had jurisdiction of the subject matter ánd ’the parties. The order was binding until revoked or reversed. In this tangled and embarrassing condition of the record we do not think that the compláinants were entitled to a decree pro confesso against Weil & Company 'and Frank & Company. It seems best to us in order to meet the ends of justice that these defendants should be állowed'a short time within which to plead to'or answer the bill if they desire to do so. It is,"therefore, ordered,’adjudged and decreed that the order making Vam a party defendant to the -bill in lieu of Weil & Company and Frank & Company and the subsequent order refusing to vacate the previous one, be reversed; that defendants Frank & Company and Weil & Company be allowed ten days from the date of filing the mandate of this court in the Clerk’s office of Hernando County to plead to or answer the bill, and that in default of such plea or. answer by both or either of said firms that a decree pro confesso be entered by the Clerk of the Circuit Court of said County against them or either of them so defaulting. It is further ordered that L. B. Varn pay the costs of this appeal.

All concur except Parkhill, J., absent on account of illness.