Hecht v. Wilson , 107 Fla. 421 ( 1932 )

The appellee, complainant below, filed her bill to foreclose a $10,500.00 mortgage upon certain lands described in her bill. The mortgagors were made parties defendant.

But in addition to the mortgagors, there were others made parties defendant because (so it is alleged) they claimed some right, title or interest in the property which was alleged to be inferior and subordinate to the claim of foreclosure being advanced by the mortgagee. These added defendants were the Trustees of the Internal Improvement Fund, Harry W. Hecht, his wife, Hester H. Hecht, and Charles J. White. The Trustees and Harry W. Hecht answered. It is from an order striking their answer and a subsequent amended answer, that this appeal is taken.

Briefly stated, the controversy presented by the appeal is whether or not it was error, under Chapter 14658, the 1931 Chancery Act, for the Court below to have ordered stricken, the answers of the Trustees, and of Harry W. Hecht, which averred in substance that the answering defendants claimed title to the property, paramount and superior to the title of the defendants in foreclosure, R. M. Davidson and Dorothy Dean Davidson, as mortgagors, and to Mattie Sue Wilson, as mortgagee, under and by virtue of certain tax deeds which had been issued by the Trustees of the Internal Improvement Fund to the defendant Harry W. Hecht, by virtue of which the Trustees had undertaken to convey to Hecht the absolute fee simple title to the land in controversy, for non payment of certain assessed Everglades Drainage District taxes.

This Court has recently re-affirmed the doctrine that the issuance of a valid tax deed creates in the purchaser a new and original title, entirely disconnected with that of the former owner, and not incumbered with any previous lien subordinate in dignity to the tax lien. Dean v. Kane,106 Fla. 814, 143 Sou. Rep. 656. There is no such controversy here as was involved in Kane v. Eustis, 106 Fla. 817, 143 Sou. Rep. 655, where we also held that in a foreclosure case, that a tax deed acquired by a second mortgagee could not ordinarily be set up as a paramount title as against the rights of a first mortgagee, because of the equitable relationsbetween a first and second mortgagee with reference to the mortgaged premises. Here the claim of Hecht to title paramount involves no alleged equitable relation claimed to have existed between the complainant, mortgagee, and Hecht, as to the mortgaged land, when the tax deed held by Hecht was acquired.

So the real question to be considered is, whether or not a claim by a mortgagee that an outstanding tax deed is void as against the land constituting the subject matter of the mortgage, presents an equitable controversy which can be properly raised and decided in a foreclosure suit, because of the terms of the 1931 Chancery Act, which provides that:

"All persons having an interest in the subject of the action and in obtaining the relief demanded may join as plaintiffs, and any person may be made a defendant who has or claims an interest adverse to the plaintiff." Section 8, Chapter 14658.

Our conclusion is that no equitable controversy is presented by such a claim, and that the provision of the Chancery Act above quoted, does not have the effect of abrogating the rule on the subject, which was laid down by this Court in Brown v. Atlanta Building Loan Ass'n, 46 Fla. 492, 35 Sou. Rep. 403.

In the case just cited, this Court, speaking through MR. JUSTICE MAXWELL, said:

"The question presented by this record is that of the right of a complainant, in filing a bill for foreclosure of mortgage, to join as a party defendant thereto one holding adversely to both mortgagor and mortgagee under a claim of paramount title. The advantage of such a course to the complainant, if permissible, is obvious, as it enables him in one litigation to remove all obstacles to the enforcement of his debt, and to expose the mortgaged property for sale, freed from the cloud of an adverse claim of title. To the adverse claimant the practice is objectionable as entangling him in a contest between mortgagor and mortgagee with which he has no concern, and as depriving him, when in adverse possession of the premises, as is claimed here, of his right of trial at law and by jury.

The general rule undoubtedly is that the proper scope of a foreclosure suit is merely to enforce the mortgage lien against the title or interests of the mortgagor and those claiming under him, and the great weight of authority sustains the view that, without special features of equitable nature to authorize such action, one claiming adversely to both mortgagor and mortgagee by paramount title cannot be joined as a defendant to the suit."

We regard the rule just stated as sound, and as applicable to the controversy raised in the court below by the stricken answer and amended answer of the appealing defendants, Trustees of the Internal Improvement Fund and Harry W. Hecht. See also Jones v. Florida Lakeland Homes Co., 95 Fla. 964, 117 Sou. Rep. 228.

Section 8 of Chapter 14658, Acts of 1931, known as the 1931 Chancery Act, relied on by the appellees^* to support the ruling of the Chancellor below to the contrary of the above stated proposition, is practically the same as Federal Equity Rule No. 37 on the same subject. See McCarthy's 1931 Florida Chancery Act Annotated, page 13.

It has been held in the Federal Courts that partiesclaiming title superior to the lien of a mortgage being foreclosed, are not proper parties to the foreclosure suit. Wood v. Franklin Life Ins. Co. (C.C.A. 5th Circuit), 17 Fed. 2d 80. The Federal holding is in line with our own as hereinbefore stated by us.

We hold, therefore, that where defendants are made parties in a foreclosure suit, on the theory that they have or claim an interest in the land inferior to the lien of the mortgage, but such defendants file an answer containing averments to the effect that they are neither necessary or proper parties, and are improperly joined, because they claim a title superior to the lien of the mortgage, that the answer should, when reasonably definite to apprise the Court of the nature of the superior claim, be held good as against a motion to strike, and that if it is admitted or sustained as true, that such answering defendants should be dismissed out of the foreclosure suit.

This holding does not lose sight of the argument advanced by appellee that in this case the tax deed relied on by the answering defendants as constituting superior title, is claimed by the mortgagee to be wholly void, and therefore a nullity. But even so, a court of equity whose jurisdiction has been invoked to foreclose a mortgage is not the proper forum to adjudge it so, in the absence of special features ofequitable nature to authorize such action. Brown v. Atlanta National Building Loan Ass'n, supra.

The orders appealed from should be reversed, and the cause remanded for appropriate proceedings according to equity practice, and it is so ordered.

Reversed and remanded with directions to dismiss the claimants under the tax deed as defendants.

WHITFIELD, P.J. AND TERRELL, J., concur.

BUFORD, C.J., AND ELLIS, J., concur in the opinion and judgment.

BROWN, J., dissents.

^* This suit was started before Chapter 14658, Acts of 1931, became effective. For the purposes of this case, we have considered the 1931 Act as controlling, because it seems to have been applied without serious questioning by the parties in the court below as to its applicability as governing the procedure to be followed.

ON PETITION FOR REHEARING.