Court Opinion

ID: 3379075
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:24:37.316939+00
Date Added: 2024-06-11T12:44:51.723562
License: Public Domain

The original opinion and decision in these cases were handed down on March 28, 1931, during the last term, and are reported in 133 So. 569. A rehearing was granted. The points raised by the petition for rehearing have been ably argued and briefed by counsel for the respective parties. All the pertinent facts were stated in the opinion already rendered, and need not be repeated here.
The contention of plaintiffs in error is that the decision of the court was founded upon the giving of a retrospective construction and effect to the proviso contained in Chapter 13625 of the Laws of 1929, not justified by the language of the Act, and that if such act justified such a retrospective construction it would be *Page 1340 
unconstitutional and void. Plaintiffs in error point out that their mortgage was executed in 1925; that suit for its foreclosure was instituted in February, 1927; that the deficiency decree was rendered in July, 1928, and the common law actions to recover the remainder due on the notes were instituted in January, 1929; all of this taking place before Chap. 13625 was passed by the legislature in May, 1929. That therefore said act could have no effect on the granting of the deficiency decree, or upon such common law suits, which latter, however, did not ripen into judgments until November, 1930.
The basic theory upon which the contention of plaintiffs in error rests is, that, under the law as it existed at the time of the rendition of the deficiency decree in the foreclosure proceedings in July, 1928, plaintiffs in error had the right to sue at common law for the balance remaining due on the mortgage notes, after deducting the amount for which they had bid in the property at the foreclosure sale and the portion of the deficiency decree granted them by the court of equity in such foreclosure proceedings; that they had this right for the enforcement of the collection of such balance by suit at common law under the Act of 1927; and that as this was the only method afforded then by the law for the enforcement of such right, any subsequent act of the legislature taking away this right or purporting to do so would be unconstitutional in that it would impair the obligation of their contracts, deprive the plaintiffs of their property without due process of law and deny to them the equal protection of the laws; that the authorities hold that a statute should never be construed retrospectively or retroactively unless it clearly appears that such was the intention of the legislature, and this rule is particularly applicable where *Page 1341 
to construe a statute retrospectively would render the same unconstitutional. We concede the correctness of the general rule thus stated. See 36 Cyc., 1205, 1210, 1215, 1223; 786 et seq.; McCarthy v. Havis, 23 Fla. 508, 2 So. 819; In re Seven Barrels of Wine, 79 Fla. 1, 83 So. 627. That while the legislature may change or modify the remedy for the enforcement of a contract right, provided the remedy be not wholly taken away nor so hampered or reduced in effectiveness as to render the contract practicably incapable of enforcement, a statute would be void as impairing the obligation of a contract if it takes away all remedies for its enforcement, or takes away the only existing remedy for its enforcement, leaving no substantial or effective remedy therefor; citing 12 C.J. 1067; 6 R.C.L. 358; Black on Constitutional Law, 746, and numerous decided cases. In other words, if a party has a right of contract which he is entitled to enforce, a statute taking away the only remedy for the enforcement of that right is an impairment of the right itself.
But even if these contentions as to the general principles above outlined be correct, we cannot see that they can avail the plaintiffs in error anything in this case. If it be admitted for the sake of argument that the proviso in Chapter 13625 of the Acts of 1929, could not have been properly applied to the case of these plaintiffs in error, it is quite plainly indicated by the court in the opinion heretofore rendered in this case that the plaintiffs in error, having applied for and obtained a deficiency decree in their favor in the court of equity, could not, under the Act of 1927, go into a court of law and maintain therein suits for the recovery of the balance due on the notes. It was said in our former opinion (quoting from page 573 of 133 So.) that: *Page 1342 
"In the light of rule 89 and the statute of 1927 construed in connection with the settled doctrine of res judicata, were it not for the statute of 1929, above quoted, there might have been strong ground for holding that, where the holder of a mortgage, in his foreclosure proceedings in equity, elects to submit to the court the matter of his right to a deficiency decree, and that court had exercised its jurisdiction and adjudicated the matter thus submitted to it, its decree thereon, unless reversed or modified on appeal, would have been final, and might have been successfully pleaded as res judicata in any subsequent suit in any other court between the same parties, or their privies, on the same cause of action; at least in cases where the court of equity had granted to the complainant a decree for any portion of the deficiency claimed. See Witter v. Neeves, 78 Wis. 547, 47 N.W. 938; Lawrence v. Beecher, 116 Ind. 312, 19 N.W. 143.
"Nor would this conclusion have been necessarily shaken by the fact that under rule 89 and the statute of 1927, the court of equity may exercise 'a sound judicial discretion' in determining whether the complainant in foreclosure is entitled to a deficiency decree 'for any portion of a deficiency, should one exist'. The complainant would have been charged with knowledge of the existence of that power in the equity court when he voluntarily invoked the exercise of that power and jurisdiction, and, when he did so, his only remedy for an abuse of such discretionary power would have been by appeal. He was not compelled to submit the adjudication of this question to the court of equity, but, if he did so, he would have been bound by its decision, subject only to his right of appeal where such discretion was abused. The discretion so vested is not an absolute and unbridled *Page 1343 
discretion, but a "sound judicial discretion" which must be supported by established equitable principles as applied to the facts of the case, and the exercise of which is subject to review on appeal. See Taylor v. Prine, (Fla) 132 So. 464, decided at the last term. Thus the mortgage holder was given an election of remedies in this respect. He could submit the matter to the court of equity in his foreclosure proceeding, or, under the statute, he also had the right to sue at common law to recover such deficiency. If he had desired to stand on his rights in a suit at law to recover in full any deficiency that might have existed after the application to the mortgage debt of the proceeds of the foreclosure sale in equity, he could have done so; but, if he desired to do this, he should in his foreclosure proceedings have refrained from submitting the adjudication of that question to the equity court. Without the amendment of 1929 by which the legislative intent to the contrary is shown, we doubt if he could have submitted the same question to both courts."
Thus, the effect of the enactment of Chapter 13625 of the Laws of 1929, was to narrow, rather than enlarge, the effect of the statute of 1927, in respect to the finality of deficiency decrees generally, but as was pointed out in our former opinion, the case of the plaintiffs in error still fell squarely within the operation of the statute of 1927 as thus narrowed by the amendment of 1929.
Thus, the contention of complainants that the act of 1929 deprived them of a right which they possessed when the deficiency decree in the foreclosure was entered and when the suit at law was begun, (assuming as they do that under the Act of 1927 they were entitled to apply for a deficiency decree in the foreclosure proceedings, and, if the decree granted them only a portion of the *Page 1344 
deficiency, to sue at law for the balance), is contrary to the principles of res judicata as set forth in our former opinion, and cannot be sustained. When plaintiffs in error filed their foreclosure proceedings, they had two remedies as to any deficiency that might exist after applying the proceeds of the foreclosure; they could apply to the equity court to adjudicate and grant them a deficiency decree, or they could have refrained from invoking the jurisdiction of equity in this regard and have sued at law for any balance due on the notes after applying the proceeds of the foreclosure. It is true, that it is not mandatory upon the court of equity to exercise such jurisdiction, and we have held in several cases, commencing as far back as Webber v. Blanc, 39 Fla. 224, 22 So. 655, that if no decree for deficiency is entered by the court of equity, the complainant may sue by law for the balance due on the mortgage notes; but we have never held that, under rule 89, or the Act of 1927, a party could invoke the jurisdiction of equity and obtain a decree for any portion of a deficiency, and then, without appealing from such decree, go into a court of law and maintain a suit on the same cause of action which he had just submitted to the equity court.
The writer is of the opinion that in cases decided before the act of 1929 was adopted where it had been made to clearly appear from a plea of res judicata filed in a subsequent action at law that the same cause of action between the same parties had theretofore been squarely presented to and considered by the equity court in a foreclosure proceedings, and that the chancellor had seen fit to expressly deny the application for a deficiency decree, and that his decree denying such deficiency stood unreversed and in full force and effect, such a plea of *Page 1345 
res judicata should be held to constitute a good defense to the action at law; and that therefore the former opinion of this court in Gover v. Braddock, 131 So. 407, should be modified so as to conform more clearly to this view. But the majority of the court are of the opinion that, inasmuch as the exercise of the chancery court's jurisdiction in this respect is permissive and not mandatory a provision in a decree merely denying an application for a deficiency decree might well be deemed as a mere declination on the part of the chancery court to exercise its jurisdiction in the premises, leaving the complainant free to sue at common law for any balance remaining due on the mortgage debt, as was done in the Gober v. Braddock case, and that the decision in that case is not in conflict with our previous decisions. But in the instant cases, the issue was squarely presented to the chancery court, duly considered by it and the court exercised its jurisdiction and granted a decree for a portion of the deficiency, which decree, standing unreversed and in full force and effect, is res judicata. As was strongly intimated in our former opinion, this conclusion would have been correct, under chapter 11993 of the Laws of 1927, even if chapter 13625 of the Acts of 1929 had never been enacted. And, as these cases fall within the proviso to the said act of 1929, the conclusion heretofore reached by us could not be rendered incorrect by the enactment of the latter statute, whether such proviso be valid or invalid. This makes it unnecessary for us to here consider the constitutionality of the proviso. We might observe in passing that the language of the proviso indicates a legislative intent that it should apply to suits pending when it was enacted, as well as those thereafter instituted. It says, "no suit at law to *Page 1346 
recover such deficiency shall be maintained," etc. It is contended by defendants in error that the statute, being remedial, this proviso, not containing any saving clause as to pending suits, must be applied to pending suits, and that it may be so applied without offending any constitutional principle; citing Cooley's Const. Limitations, Vol. 2, p. 754; Lewis's Sutherland on Stat. Constr., section 665; Goldstein v. Maloney, 62 Fla. 198, 57 So. 342; Edwards v. Meyer, 130 So. 57, 59; Campbell v. Iron-Silver Mining Co., 83 Fed. 643; South Carolina v. Gaillard, 101 U.S. 433, 25 Law Ed. 937, and other cases.
Assuming that the amendment of 1929 was a valid one, its validity not having then been questioned, we held in our former opinion, under the act of 1927 as amended by the act of 1929, a mortgagor could obtain a deficiency decree for a portion of the deficiency and still sue at law for the remainder, except in cases falling within the limited scope of the proviso in the act of 1929. But the fact should not be overlooked that the legislative intent to allow such suits did not appear until the statute of 1929 was enacted. Nor had this court up to that time ever held that such suits could be maintained. The intent of the legislature in enacting the 1927 act, as applied to suits arising between 1927 and 1929, must be derived from the language of the act of 1927. The intention of the legislature appearing from the 1929 act, to allow suits at law (except in cases covered by the proviso) to recover a balance due on the mortgage debt where the chancery court had already granted a decree for a portion of the deficiency, a right which this court had never recognized as existing under the former act, cannot date back to the 1927 act, which expressed no such intention.
Plaintiffs in error have been accorded an opportunity *Page 1347 
to litigate their cause of action in a court of competent jurisdiction. They have done so, and without appeal. Assuming, but not admitting, that they had the right to relitigate the same cause of action in another court, or on the law side of the same court, it might be seriously and perhaps justly contended that this was a mere privilege which the legislature might deprive them of, even during the pendency of the second litigation, without impairing their constitutional rights.
As to the binding effect of the action of the chancery court in granting deficiency decrees see, in addition to the cases cited in our former opinion, the following: Sears v. Nichols,123 Ill. App. 449; Getty v. Schantz, 100 Fed. 577; Mutual Life Ins. Co. v. Newton, 50 N.J.L. 571, 14 A. 756; Brigel v. Creed, 65 Ohio St. 40, 60 N.E. 991; 3 Jones on Mortgages, Section 1584; 2 Freeman On Judgments, Section 586. Some of these authorities hold that where a decree is rendered for a deficiency on the mortgage notes, (or the cause of action, whatever its form), they are merged into such judgment or decree, and no subsequent suit can be maintained upon them and that such decree, unreversed, it res judicata.
It is true that Chapter 11993, Laws of 1927, after providing for the entry of deficiency decrees also says that "the complainant shall also have the right to sue at common law to recover such deficiency". But this means that he has an election of remedies; he may obtain a deficiency decree in the mortgage foreclosure, or he may sue at law to recover such deficiency.
It was said by this Court, speaking through the present Chief Justice, in Voorhis v. Crutcher, 98 Fla. 259, 123 South. Rep. 742, that this clause of the statute was at best only a restatement of the law obtaining in this State prior to that enactment. *Page 1348 
We do not see that the application of the principle of res judicata to the deficiency decree in this case has worked any great hardship upon plaintiffs in error, when the facts disclosed by the record are considered. Plaintiffs in error, as complainants in the foreclosure proceeding, got back the land which they had sold the defendant in 1925 for about $1,200,000. with valuable improvements thereon alleged to have cost $250,000., and they of course retained the $500,000, which the defendants had paid in cash in 1925 when the mortgage for the balance of the purchase price was given. In addition to all this the chancellor allowed them a deficiency decree for $50,000. The defendants lost everything. True, the complainants prayed for a deficiency decree for about $900,000. being the full balance due on the mortgage notes with interest, after deducting the amount for which they had bid in the property at the foreclosure sale in 1928, $150,000.; but by his decree the chancellor in effect said, you have submitted this question to a court of conscience, and this court holds that in all equity and good conscience, you should not be allowed a deficiency decree for more than $50,000; that the court will give you, and no more. And the complainants took no appeal. The question thus decided became res judicata and could not be relitigated in any other court. Such was our original decision and we see no good reason to depart therefrom.
Judgments reaffirmed on rehearing.
BUFORD, C.J., AND WHITFIELD, ELLIS, TERRELL AND DAVIS, J.J., concur.