Case Name: SOUTHERN COLONIAL MORTGAGE COMPANY, INC., and Colonial Mortgage Company of Indiana, Inc., etc., Appellants, v. John E. MEDEIROS et al., Appellees
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1977-06-17
Citations: 347 So. 2d 736
Docket Number: No. 76-355
Parties: SOUTHERN COLONIAL MORTGAGE COMPANY, INC., and Colonial Mortgage Company of Indiana, Inc., etc., Appellants, v. John E. MEDEIROS et al., Appellees.
Judges: CROSS, J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 347
Pages: 736–741

Head Matter:
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.
William E. Sadowski, of Helliwell, Mel-rose & 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, Na-deau, Segal, Zeller & LaPorte, Miami, for appellee Climatrol Corp.

Opinion:
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-lien-holders, 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 lienhold-ers 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 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." 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. 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.
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.
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. 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 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.
(2) Labor performed or materials furnished to a unit shall not be the basis for the filing of a lien pursuant to the mechanics' lien law against the unit or condominium parcel of any unit owner not expressly consenting to or requesting the same. No labor performed or materials furnished to the common elements shall be the basis for a lien thereon, but if duly authorized by the association such labor or materials shall be deemed to be performed or furnished with the express consent of each unit owner and shall be the basis for the filing of a lien against all condominium parcels in the proportions for which the owners thereof are liable for common expenses.
(3) In the event a lien against two or more condominium parcels becomes effective each owner thereof may relieve his condominium parcel of the lien by payment of the proportionate amount attributable to his condominium parcel. Upon such payment it shall be the duty of the lienor to release the lien of record for such condominium parcel.
We think the foregoing subsections apply to all claims of lien recorded after the recordation of the declaration of condominium unless the lien is for work done or for materials furnished before the recordation of the declaration of condominium and the lien relates back to a notice of commencement that predates the declaration of condominium. This construction would enable this particular condominium statute to exist without conflicting with the mechanics' lien law. It would also appear to give meaning to the terms "arise or be created" as used in Section 711.20(1). Liens which are timely recorded after the recor-dation of the declaration of condominium and which relate back to a prior notice of commencement "arise or [are] created" pri- or to the recordation of the declaration of condominium. Thus, such liens are not precluded by Section 711.20(1).
Since there is no condominium association in existence prior to the recording of the declaration of condominium, Section 711.-20(1) would not appear to refer to a claim of lien for work done or materials furnished to the common elements prior to recordation of the declaration of condominium.
For the foregoing reasons, in our opinion one improving real property prior to the recording of a declaration of condominium is entitled to enforce a claim of lien against the entire property perfected after the declaration is recorded, if the claim of lien relates back to a notice of commencement that was recorded before the declaration of condominium, even though the claim of lien is recorded after the date the declaration of condominium is recorded. In enforcing a perfected claim of lien against the entire property, the artisan can join the unit owners as a class via the condominium association. See Section 711.12(2), Florida Statutes (1975). However, the most equitable result would be accomplished by making each condominium unit liable only for its pro rata share based upon its pro rata interest in the condominium property as set forth in the declaration of condominium. Those units which did not pay their pro rata share could then be sold to satisfy the balance of any unpaid lien.
For the foregoing reasons the judgment of the trial court is reversed with directions that judgment be entered in accordance with the terms of this opinion.
CROSS, J., concurs.
LETTS, J., dissenting in part.
. United of Florida, Inc. v. Illini Federal Savings & Loan Association, 341 So.2d 793 (Fla.2d DCA 1977).
. Id.
. Federal Land Bank of Columbia v. Godwin, 107 Fla. 537, 145 So. 883, at 885 (1933). Also see Schilling v. Bank of Sulphur Springs, 109 Fla. 181, 147 So. 218 (1933); Forman v. First Nat. Bank, 76 Fla. 48, 79 So. 742 (1918); For-tenberry v. Mandell, 271 So.2d 170 (Fla.4th DCA 1972); G. Glenn, Glenn on Mortgages § 340 (1943). But compare Boley v. Daniel, 72 Fla. 121, 72 So. 644 (1916).
. Federal Land Bank of Columbia v. Godwin, supra, 145 So. at 886.
. Furlong v. Leybourne, 138 So.2d 352 (Fla.3d DCA 1962).