Lindsley v. Phare

155 So. 812, 115 Fla. 454

• Court: Supreme Court of Florida
• Decided: June 14, 1934
• Status: Published

Opinions

Buford, J.

In 1929 the appellees here brought to this Court for review a final decree in the case of John J. Phare and wife, Elizabeth Gregory Phare, v. Warner E. Randall. See 97 Fla. 858, 122 Sou. 217. The decree in that case provided; amongst other things:

“That the said defendants, John J. Phare and Elizabeth Gregory Phare, at the time of the filing of said bill and of the allowance of the said amendment of February 8, 1926, were the owners of certain lots and of certain personal property 'both of which they held by virtue of being conveyed or transferred or made payable to them in one and the same instrument and thereby vesting them with said properties as an estate by entireties, the said properties so held as an estate by entireties' being as follows, to-wit:

“.(g) Lots 1 and 3 to 11, inclusive, of Block 2 of Fair-Haven Subdivision, being a resubdivision of Lots 7 and 8 in Block 207 in the Town of New Port Richey, Florida, and in making said resubdivision Lot No. 7 of Block 207 was the property of John J'. Phare and Elizabeth'Gregory Phare, so that all said' resúbdlvi'ded lots described, to-wit', Lots 1 and 3 to 11, inclusive, of Block 2 of Fair Haven-subdivision were and are property of said John J. and Elizabeth G. Phare, conveyed to them by deed dated April 16th, 1925; made by E. D. Fenton and his wife, Mable L. Fenton, which deed is recorded in Deed Book 63, Page 380, in the Public Records of Pasco County, and by deed the title to said land was conveyed to said John J. Phare and Elizabeth Gregory Phare, their heirs and assigns forever, and, to have and to hold the same in fee simple forever; and with warranty of title and in the usual form of a warranty deed, properly executed, acknowledged and recorded.

“(h) Also, as personal property they hold as an estate by entireties a certain promissory .note in the sum of $1,300.00 dated April 1st, 1924, executed by Frances Lindsley, widow, payable three years after date to the order of John J. Phare and Elizabeth Gregory Phare with interest from date until paid, at the rate of eight per cent, per annum, payable semi-annually. Said note is secured by a mortgage executed by Frances Lindsley, widow, having the same date, mortgaging to the said John J. Phare and Elizabeth Gregory Phare, their heirs and assigns forever, Lot No. 1 in Block 156, Town of New Port Richey, Florida, according to the Port Richey Company’s Plat recorded in Book 2, page 21, Public Records of Pasco County, which mortgage itself is recorded in Mortgage Book 18, page 266, in the Public Records of said Pasco County, Florida, and which- properties being thus held as an estate by entireties are subject to be charged in equity for the payment of the indebtedness due to the complainant, Warner E. Randall, as hereinbefore recited.”

It further provided:

“And it having been alleged in the Bill that certain property therein described is held by the defendants, John J. Phare and Elizabeth Gregory Phare, as an estate by the entireties and the answer of the said defendants having ádmitted that the specific properties named are so held as an estate by entireties and the Court having found from the evidence submitted that it is true that such properties are held by an estate by entireties, it is further ordered and decreed that the amount and the several sums decreed in favor of the complainant be and they are made a charge and a lien in equity against the said items of property held as an estate by entireties, said properties referred to being those fully' described in paragraph 11, sub-paragraphs (g) and (h) of this decree, and that the said properties be sold, by the Special Master as elsewhere provided in this decree.”

■ The decree in this regard was reversed and in that case we held:

“As- to the separate property of Elizabeth Gregory Phare the cause is reversed on authority of Blood v. Hunt and Blood v. Huey, decided by this Court April 16, 1929; Rice v. Cummings, 51 Fla. 535, 40 So. R. 889. As to the -joint' property or property by the entireties of John J. and Elizabeth Gregory Phare the cause is reversed on authority of Ohio Butterine Co. v. Hargrave, 79 Fla. 458, 84 So. R. 376. As to the homestead property óf John J. Phare the cause is reversed on authority of Section One of Article Ten of the Constitution, the judgment lien here brought in question-not being within the terms ■ of those enumerated in that Article.”

After the appeal was taken the notes and mortgage above ref erf ed to, were sold by the Master and bought in by the maker of such notes and mortgage. Thereafter, the appellee here filed bill of complaint to foreclose that mortgage,' alleging all the salient facts necessary to be alleged in a bill to fore'closé á mortgage and further alleging that the notes' and mortgage had been unlawfully taken by the Master in Chancery in that former suit and sold under the terms of the decree above referred to, the maker of the notes and mortgage being the purchaser at such sale. It is alleged in the bill that the Master did not convey, and could not convey, any title to the purchaser because the notes and mortgage were property of the complainants by the entireties' and were not property the title to which was so vested that they were subject to sale to satisfy the decree which had been appealed from and reversed.

■ Demurrer was filed to the bill of complaint. The Chancellor first sustained the demurrer and then he granted a rehearing, and, after considerable time, entered another order overruling the demurrer. From that latter order the appeal is taken.

It is' first contended that error was committed by the Chancellor when he denied a motion to dismiss the bill of complaint after the case had lain dormant with no steps being taken for a period of more than three years. This objection is not well taken because the order of the Chancellor overruling the demurrer states upon its face that steps had been taken in the cause and that the matter had been presented for his consideration within three years and there is no evidence of superior dignity that this certificate of the Chancellor is not true. We give it full credence, attributing to it the presumption which it is entitled to have as a part of the Chancellor’s decree.

The next question presented is whether or not the complainants in this suit may recover from the purchase? at a Master’s sale. We admit that the general rule is, as stated in Johnson, et al., v. McKinnon, 54 Fla. 221, 45 Sou. 23:

“Upon the reversal of a judgment after a sale has' been' made under execution to a stranger to the suit, the defend-' ant must seek redress from the plaintiff. Where the plaintiff has received the proceeds of the sale the defendant may recover in an action for money had and received. If, however, the money, after being paid to plaintiff, is by him paid to a third person, it cannot be recovered from such person, though he was one of the plaintiff’s attorneys.”

And, as we said in Simms v. City of Tampa, 52 Fla. 641, 42 Sou. 884:

■ “There was no error in the order made and questioned here. It is well settled that restitution, on reversal of a judgment, can be compelled only from parties' to the record, or from their beneficial assigns, or in case of the death of-the execution plaintiff; from his executor or administrator. Restitution cannot be compelled from third persons, strangers to the record, who were bona fide purchasers at a.sale under process dependent upon a judgment subsequently reversed, or who acquired bona fide collateral rights thereunder and their rights are in no way affected by the subsequent reversal of the judgment. Particularly should restitution be denied as against a stranger to the record when sought in a summary manner by motion, rule or petition as was attempted in this case.”

In the latter, case many authorities are cited supporting that enunciation.'

But in this case the decree under which the sale was made showed upon its face that the property ordered sold was held as an estate by the entireties and was not subject to sale to satisfy the deficiency decree for which it was ordered sold. In other words, the decree showed upon its face that the Chancellor had no more authority to order this property sold to satisfy the deficiency decree than he had to order the property of one who was' a stranger to the suit sold for the same purpose. The title to the property sold was not in- the defendant. -Moreover, it apears that the purchaser at the sale, being the maker of the notes and mortgage on the property involved, had full knowledge that the title to iúch property was held as an estate by the entireties by husband and wife and was charged with knowledge' that it could not be sold to satisfy the deficiency decree involved. The decree ordering the sale of the notes and mortgage showed upon its face that such notes and mortgage constituted property of which the Court did not have jurisdiction, to order sale.

In Norton v. Nebraska Loan & Trust Co. et al., 35 Neb. 466, 53 N. W. 481, 18 L. R. A. 88, the Court said:

- “It is a well settled rule that the doctrine of caveat emptor applies to all judicial sales, subject to the qualification that the purchaser ís entitled to relief on the ground of after-discovered mistake of material facts or fraud, where he is: free from negligence. He is bound to examine the title, and not rely upon statements made by the officer conducting the.sale, as to its condition. If he buys without such examination, he does so at his peril, and must suffer the loss'occasioned by his neglect.”

“A purchaser at a mortgage foreclosure sale will not be relieved from completing his purchase on account of defective title, or on the ground of there being prior encumbrances on the property, when the true condition of the title is fully set out- in the pleadings and the record of the proceedings under which the sale was made, as he is chargeable with notice of such material fact's as the records disclose.” ' . '

In 16 R. C. L. 119, it is said:

' “There are many cases holding generally that in judicial sales the rule of caveat emptor applies in its utmost vigor and strictness.. The court sells', and can undertake to sell,. only the right, 'title, interest and property, such as it is, of the parties to the proceeding and the purchaser is charged with knowledge of that fact. It- therefore follows that he takes upon himself the risk of finding outstanding rights that could have been asserted against the parties to the proceedings; and if by reason of the existence of such rights, whether known or not, or discoverable or not, he takes less' than a complete title to the entire property offered, or even takes nothing at all, - by his purchase, he- cannot complain and has no defense upon being sued for the purchase price. The rule is of particular force where by the terms of the sale only the right, title,, interest and estate of the owner or parties to the proceeding are specifically offered, especially when the true condition of the title is fully set out in the pleadings and record of the proceedings' under which the •sale was had.”

In the case of Williamson, et al., v. Berry, 12 Law Ed. 1170, the Supreme Court of the United States said: - •

“The case put before us, upon several of the points céritified, is this: The State of New York passes certain Acts for the relief of Thomas B. Clarke, in relation to a devise •of land, and directs that the Acts' shall be carried into -execution by the Chancellor of the State. In the course -of the proceedings for that purpose, he orders that the Trustee, Clarke, may sell or mortgage particular portions' ,of the land, and permits him to convey parts of it in payment of any debt or debts, upon a valuation to be agreed on between himself and his creditors; and that Clarke may apply the proceeds' of sale to the payment, of his debts.

“The defendant in this action says he bought from DeGrasse. It is proved that DeGrasse was. a- creditor of Clarke and that the consideration for Carke’s conveyance to him, except the wild lands', -was .the amount that'Clark^ owed to him. Then, in order to sustain Clarke’s conveyance to DeGrasse, he introduces the Acts for the relief of Clarke, arid the orders of the Chancellor upon them.

“This evidence raises the question, whether or not the Chancellor had jurisdiction to give an ■ order, permitting Clarke to convey' any part of the property in payment of a debt. After the most careful perusal of the acts and orders, we have concluded that the Chancellor had not the jurisdiction to give an order permitting Clarke to convey any part of the devised premises in satisfaction of his debts, and that neither DeGrasse nor his alienee Berry, can derive from the order, or the conveyance by Clarke toDeGrasse, any title to the premises in dispute. This conclusion substantially answers the first four points certified; but the answers will be given in more precise form hereafter.”

• The enunciation was followed in Williams et al. v. The Irish Presbyterian Congregation of the City of New York, 12 Law Ed. 1200.

A purchaser at a judicial sale takes title subject to defects, liens, encumbrances and all matters which may defeat the title of which he' has notice, or of which he could obtain knowledge in the exercise of ordinary prudence and caution. 35 C. J. 75.

In Ohio Butterine Co. et al. v. Hargrave et al., 79 Fla. 458, 84 Sou. 376, we said:

“From the peculiar nature of such an estate, and from the legal relation of the parties, there must be unity of estate, unity of possession, unity of control and unity in-conveying or encumbering it; and it necessarily and logically results that it cannot be seized and sold upon execution for the separate debts of either the husband or the wife. The estate is placed beyond the exclusive control of either of the parties, or the reach of creditors, unless it can be successfully attacked and set aside for fraud.”

The result reached in the case of Phare v. Randall, supra, was necessarily based upon the finding that the court was without jurisdiction to make an order for the sale of the separate property of Elizabeth Gregory Phare.and was also without jurisdiction to make an order requiring the sale of the notes and mortgage here under consideration which was property held by the entireties by John J. Phare and his wife, Elizabeth Gregory Phare. Both items covered property over which the court had not acquired jurisdiction, all of which appeared on the face of the decree under which the property here involved was sold and of which the purchaser at the sale was charged with notice. The sale under such conditions could not deprive the owners of the property of their rights therein.

For the reasons stated, the order appealed from should be affirmed. It is so ordered.

Affirmed.

Whitfield, Ellis and Terrell, J. J., concur. Brown, J., concurs in the conclusion. Davis, C. J., dissents.