SOUTHERN COLONIAL MORTG. v. Medeiros

347 So. 2d 736
CourtDistrict Court of Appeal of Florida
DecidedJune 17, 1977
Docket76-355
StatusPublished
Cited by9 cases

This text of 347 So. 2d 736 (SOUTHERN COLONIAL MORTG. v. Medeiros) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SOUTHERN COLONIAL MORTG. v. Medeiros, 347 So. 2d 736 (Fla. Ct. App. 1977).

Opinion

347 So.2d 736 (1977)

SOUTHERN COLONIAL MORTGAGE COMPANY, INC., and Colonial Mortgage Company of Indiana, Inc., Etc., Appellants,
v.
John E. MEDEIROS et al., Appellees.

No. 76-355.

District Court of Appeal of Florida, Fourth District.

June 17, 1977.

*737 William E. Sadowski, of Helliwell, Melrose & DeWolf, Miami, for appellants.

John F. Cosgrove, of Hall & Hedrick, Miami, for appellee Weil-McLain Co., Inc.

Paul A. Gore, of McCrory, Chappell, Brandt & Gore, P.A., Fort Lauderdale, for appellee Satellite Lighting Inc. and Morgan Whitman Supply Co.

Martin E. Segal, of Patton, Kanner, Nadeau, Segal, Zeller & LaPorte, Miami, for appellee Climatrol Corp.

ANSTEAD, Judge.

This appeal involves a contest as to priorities between mortgagees and mechanics lienholders on a condominium development. The appellants-mortgagees, Southern Colonial Mortgage Company, Inc. and Colonial Mortgage Company of Indiana, Inc., appeal a judgment in favor of the appellees-lienholders, Weil-McLain Company, Inc., Satellite Lighting, Inc., Morgan Whitman Supply Company, and Climatrol Corporation. We reverse.

The mortgagees extended loans to two purchasers of condominium apartments in Hidden Harbor condominium complex. Mortgages securing the loans were recorded on March 8 and April 5, 1974. Portions of the loans, $23,293.25 in one case and $24,441.94 in the other, were paid directly to the construction lender-mortgagee to secure releases of the construction mortgage which had been recorded on September 13, 1972.

A notice of commencement on the Hidden Harbor construction project was recorded on May 15, 1973. The lienholders recorded claims of liens on August 28, 1974, October 2, 1974, November 19, 1974, and January 14, 1975.

When the two condominium apartment purchasers defaulted, the mortgagees filed a foreclosure action and joined the lienholders as defendants. The trial court found that the lienholders' claims were superior to the mortgagees' on the basis that the mechanics' liens related back and attached as of the date of the recording of the notice of commencement.

The mortgagees assert that Section 713.13(5), Florida Statutes, prevents any mechanics' liens recorded more than one year after the recording of the notice of commencement from relating back to the notice of commencement as the date the lien attaches. Section 713.13(5) provides:

Unless otherwise provided in the notice of commencement or a new or amended notice of commencement, any notice of commencement heretofore or hereafter recorded shall not be effective as to any person acquiring title or any interest in real property from the owner or under him after one year from the date of recording the notice of commencement.

In this section a class of persons is designated to receive the benefit of the provisions thereof. That class consists of "any person acquiring title or any interest in real property from the owner or under him"; or if *738 read with the remaining words of the section, the class consists of "any person acquiring title or any interest in real property from the owner or under him after one year from the date of recording the notice of commencement." Whichever way the class is defined, the mortgagees are not included.

Under Florida law a mortgage does not convey title or create "any interest in real property."[1] The mortgagees have presented a very convincing argument that the legislature intended by enacting Section 713.13(5) to fix a date certain by which liens must be recorded or lose the right to relate back to the notice of commencement. However, while we believe this argument has merit, we cannot avoid the actual words used by the legislature and the plain legal meaning of those words.

As noted above, the class definition may also be limited to persons acquiring title or any interest in real property more than one year after the recording of the notice of commencement.[2] The mortgages, even if defined as "any interest in real property," were recorded within one year of the notice of commencement and are therefore excluded from the class benefited by Section 713.13(5).

For these reasons we hold that the mortgagees were not entitled to invoke Section 713.13(5) to gain priority over the mechanics' liens of the appellees, and the trial court's order is affirmed in this respect.

The mortgagees-appellants next claimed they were entitled to priority by reason of being subrogated to the rights of the construction mortgage to the extent that mortgage was paid by them. The construction mortgage predated the mechanics' liens, and the payments by the appellants-mortgagees did pay off in full the construction mortgage insofar as it encumbered each condominium unit involved.

This right of subrogation has been recognized in Florida:

The rule is academic that one who makes a loan to discharge a first mortgage, pursuant to an agreement with the mortgagor that he shall have a first mortgage on the same lands to secure it, the lendor will be subrogated to the rights of the first mortgagee, notwithstanding there is at the same time a second outstanding mortgage of which he (the lendor) is ignorant.[3]

The equitable result of such a rule was further stated by the Supreme Court:

The application of this rule works common justice to all; it prevents injury to appellant, who furnished the money to pay off the first mortgage in ignorance of the second; it gives appellant the benefit of its payment; carries out the intention of the parties; and leaves Alderman, the holder of the junior mortgage, in his original position. One of the first tests determining the application of this rule is whether or not subrogation to the place of the prior or retired lien puts the holder of the second lien in any worse position than if the prior lien had not been discharged.[4]

The foregoing principle of law assumes that the one paying is not a volunteer and has a sufficient interest to warrant the payment of another's debt.[5] The lienholders argue that the failure of the mortgagees to secure a formal assignment from the construction lender should bar subrogation. We agree that an assignment would be the better practice to insure the successor mortgagee's subrogation rights. However, under the *739 circumstances of this case and the equitable principles set out above we do not feel the failure to secure an assignment prevents subrogation. And by recognizing the mortgagees' subrogation rights, the lienholders are not placed in any worse position than if the construction mortgage had not been released.

The mortgagees also claim that this action is controlled by the judgment of the circuit court in a companion case rendered while this action was pending. However, we find that any defense available to the mortgagees as a result of the companion case was not properly raised in the trial court.

The mortgagees further claim that the mechanics' liens are barred or restricted by the provisions of Sections 711.20(1), (2), and (3), Florida Statutes (1975). These statutes provide:

(1) Subsequent to recording the declaration and while the property remains subject to the declaration, no liens of any nature shall thereafter arise or be created against the condominium property as a whole except with the unanimous consent of the unit owners. During such period liens may arise or be created only against the several condominium parcels.

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Bluebook (online)
347 So. 2d 736, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-colonial-mortg-v-medeiros-fladistctapp-1977.