Court Opinion

ID: 4919611
Source: CourtListenerOpinion
Date Created: 2021-09-22 00:15:30.626558+00
Date Added: 2024-06-11T08:14:00.536869
License: Public Domain

Ellis, J.,
Mssmting. — When one finds his views upon any question to be very different from those entertained by his colleagues, in a spirit of fairness to himself he feels impelled to re-examine his own views and scrutinize with care the processes by which he arrived at them, that he may ascertain where exists the error which led him astray, if indeed, he has been led astray.
And when those with whom he is associated and with whose views his own unfortunately for himself do not agree, are men of a high degree of integrity and much ability, his conviction must be deep if he opposes his views to theirs.
And while I offer the sincerity and depth of my conviction as the excuse for preparing this opinion its justification must be found in its reasoning if at all.
In the first place the contention of Forman that the Carter mortgage had been released in accordance with the agreement between him and Guyton made at the time of the loan, was -without merit. See First Nat. Bank of Quincy v. Guyton, 72 Fla. 43, 72 South. Rep. 460.
When this case was here before the record presented no question of subrogation. This Court, in its opinion denying a petition for rehearing which was presented upon the ground that the question of Forman & Com-*56party’s subrogation to tbe Burgess mortgage and the judgments was overlooked, said: “There being ho question of subrogation properly presented, the appellees suggestion that subrogation may be involved is not well taken.” See First Nat. Bank of Quincy v. Guyton, supro.
Yet the record which was presented to this Court upon the first appeal was the same in all respects but one as that presented now upon this appeal. The only difference being in the decrees of March 13, 1915, and November 28, 1916. The former decree was reversed' which held that the equities were with the cross-complainants, For-man & Company, and that they were entitled to the relief prayed in the cross-bill. That as between the complainants in the original bill as amended and the defendants Guyton and wife the equities were with the complainants in the said original bill as amended in so far as they prayed for the foreclosure against said defendants Guy-ton and wife of the mortgage to Carter.
That the mortgage to Forman from Guyton and' wife created a valid, prior and superior lien upon the property described as against the defendants including the bank and the Forman mortgage was adjudged to be a lien superior to the lien of the mortgage from Guyton to Carter.
The first decree in nowise indicates that the Chancellor confined his consideration of the case to the single question of whether the Carter release was valid, and there can be no assumption that he did' except from matter outside the record. The briefs of counsel for Forman state that the question of subrogation was argued before the Chancellor.
If the Chancellor had found that the position taken by Forman’s counsel on either proposition was correct *57the decree would have been the same. That is that the Forman mortgage ivas a superior lien .to the Carter mortgage.
Upon the appeal, however, this Court considered only the one question of whether the Carter release was valid and declined to consider whether Forman was entitled to subrogation to the Burgess mortgage and the two judgments because the Court did' not then consider that the latter question Avas presented. If it had been "considered that the question of subrogation was presented in the record, it Avould have considered the whole case upon its merits and thus followed an unbroken line of decisions by this, Court to the effect that an appeal from a final decree brings up' the whole merits of the cause, and that upon reviewing the whole case upon its merits will direct such decree to be entered as should' have been entered. See Smith v. Croom, 7 Fla. 180; Bloxham, Comptroller v. Florida Cent. & P. R. Co., 35 Fla. 625, 17 South. Rep. 902; Fairchild v. Knight, 18 Fla. 770; Parken v. Safford, 48 Fla. 290, 37 South. Rep. 567; Foster v. Ambler, 24 Fla. 519, 5 South. Rep. 263; Ocala Foundry & Machine Works v. Lester, 49 Fla., 347, 38 South. Rep. 56.
An a.ppeal in equity is substantially a rehearing of the case, and the Appellate Court has the right to look into the Avhole case as it is presented by the record, and may consider points made primarily in the Supreme Court if raised by the pleadings and proofs. Care, Iioavever, must be taken that neither party be permitted to surprise or mislead his adversary — or to make objections Avhich if made in the Court beloAv might have been obviated—Logan v. Slade, 28 Fla. 699, 10 South. Rep. 25. Moreover it is the duty of this Court under the Statute to examine the record and to give such decree as the *58Court below ought to have given, or as it may appear according to law. Sec. 1707 Gen. Stats. 1906, Florida Compiled Laws, 1914.
If the views expressed in the majority opinion are correct, then the decision of this Court upon the first appeal was clearly wrong because the first decree of the Chancellor below according to the majority decreed substantial justice. Cimino v. Smith, 57 Fla. 385, 49 South. Rep. 545; Hobbs v. Frazier, 61 Fla. 611, 55 South. Rep. 848. It is not permissible to assume that the Chancellor did' not pass upon the question of subrogation and then say that as the question is one of fact this Court would have exercised original jurisdiction if it had passed upon the question and affirmed the first decree, because neither the assumption nor the proposition of law is sound.
By what means is the Court to ascertain whether or not the Chancellor did pass upon the question of fact (subrogation) ? The only legitimate source of information is the decree itself. That does not show that he did not consider the question. To assume that he did not consider the question, if it was presented, is to say that he blundered into a correct conclusion. To contend that on an appeal from a final decree this Court is precluded from considering any question of fact which the Chancellor in his decree omitted to state that he considered, because that would be exercising original jurisdiction by this Court; is to shake from its base a principle which has governed this Court from its earliest history. The fallacy of such a contention was exposed by Mr. Justice Dupout in 1857 in Smith v. Croom, supra; nor has any justice of this Court ever announced .a rule contrary to the views therein expressed until the present time. The question of subrogation was not presented by the record *59in the first appeal as this Court said' in the opinion on the petition for rehearing.
When then was the question of subrogation presented and to whom? We held in the first case that the record did not present such a question. But it seems the majority has found that the question is presented in this case, although the bill and answers and cross-bill and answers thereto and replications to answers and cross-bill and answers thereto and replications to answers and testimony are identical in both cases. There was not a pleading nor a word of evidence added to the record after the first decree was entered.
So upon the same record the majority holds that the question of subrogation was and was not presented. In the brief of counsel for Forman, the appellee in the first case it was argued that Forman was entitled in equity to be subrogated to the Burgess mortgage. The point was argued and authorities were cited. Yet the language of the Court was: “There being no question of subrogation properly presented the appellees suggestion that subrogation may be involved is not well taken, and the petition for a rehearing is denied.”
Tn view of the fact that counsel for Forman did present and argue to this Court by brief the question of subrogation, the conclusion is irresistible that the language of the Court above quoted means that neither the answer of Forman & Company to the original bill, nor the allegations of his cross-bill, nor the evidence in the case present any question of subrogation. I am still of that opinion.
The second decree rendered about three months after the petition for rehearing was denied adjudicated the equities to be with the complainants in the original bill; decreeing in effect that the Carter mortgage being held *60by the banks before Carter undertook to release it, it was in force notwithstanding his attempted release and that as the two judgments and' the Burgess mortgage were cancelled as per agreement between Guyton and Forman when the latter • made the loan, there was no subrogation in favor of Forman to the Burgess mortgage and the two judgments. In holding thus the Chancellor strictly followed this Court in the two cases of First National Bank of Quincy v. Guyton, supra, and Boley v. Daniel, 72 Fla. 121, 72 South. Rep. 644.
In the case of Boley v. Daniel, supra, this Court considering the question of subrogation, said: “Subrogation is the substitution of one person in the place of another with reference to a lawful claim or right. Subrogation arises by operation of law where one having a liability or a right or a fiduciary relation in the premises paj's a debt due by another under such circumstances that he is in equity entitled to the security or obligation held by the creditor whom he has paid. This is called' legal subrogation. Conditional subrogation depends upon a lawful contract and occurs where one having no interest in or relation to the matter pays the debt of another and by agreement is entitled to the securities and rights of the creditor paid.” Again: “As Lee Daniel was under no obligation whatever to pay the note that was secured by the first mortgage on the property given by Waters to Brooks and had no interest in or relation to the property, there can be no legal subrogation of Daniel to the rights of the holder of the first note and mortgage. If there can be a subrogation it must be a conventional subrogation and based on an agreement of the parties that the first mortgage Uen shall continue for the benefit of Daniel. (Italics mine.) An agreement between Daniel and the mortgagors that he was to have a first lien on *61the property covered by said mortgage is not necessarily an agreement that the first mortgage lien shall remain in force for the benefit of Daniel.”
The doctrine of subrogation thus announced by this Court finds support in the authorities cited in the majority opinion. The Court in the Boley-Daniel case said : “The conclusion here reached is not inconsistent with the decisions in Thompson v. Connecticut Mut. Life Ins. Co., 139 Ind. 325, 38 N. E. Rep. 796, and Bankers’ Loan & Investment Co. v. Hornish, 94 Va. 608, 27 S. E. Rep. 459, cases cited in the majority opinion.
It is stated in the majority opinion: “That Guyton believed that he was giving and Forman understood that he was securing a lien that was superior to the lien of the Carter mortgage and which would bear the same relation to it as that borne by the Burgess & Co. mortgage is not disputed,” etc. There is no averment of fact in Forman & Company’s answer to the original bill nor allegation of fact in his cross-bill nor statement in the testimony and depositions of witnesses nor in the documentary evidence submitted, to the effect that Forman’s mortgage should bear the same relation to the Carter mortgage as the Burgess & Company mortgage bore to it. Upon the other hand it was the agreement of the parties, testified to by their witnesses and shown by the documentary evidence in the case, all of which is undisputed in the record, that the judgments were to be paid and cancelled the Burgess & Company mortgage paid and discharged and the Carter mortgage released by Mr. Carter. In that way it was expressly agreed between Guyton and Forman that the latter should have a first lien upon the lands.
The notes from Guyton to Forman and the mortgage securing the payment of same are dated May 18, 1910, *62acknowledged on the 27th and recorded on the 28th day of the same month in the public records of Jackson County. It is alleged in the cross-bill of Forman and shown by the evidence that the Burgess & Company mortgage was paid in September, 1910. That Carter’s “release” of his mortgage was obtained to secure money from Forman to “pay off” the judgments and the Burgess & Company mortgage. In other words it was the intention of the parties, their minds met upon the pan, viz: to pay the judgments and Burgess mortgage and obtain a release from Carter and by that means the Forman mortgage would be a first lien upon the land. This plan was carried out. It was never agreed that the judgments or the Burgess mortgage should remain in force for the benefit of Forman. On the other hand the evidence shows that they agreed expressly that the judgments and Burgess mortgage should be extinguished: The cancellation by written instruments were procured for record, then the loan was fully paid over to Guyton through Mr. Ormond.
Two years afterward, in March, 1912, the holders of the Carter notes filed a bill to foreclose the Carter mortgage. Forman & Company were made defendants. They defended upon the ground that the release by Carter was valid. Their cross-bill to foreclose the mortgage given by Guyton to them was based upon the theory that Carter being the President of the banks to whom he transferred the notes, had the authority to release the mortgage and his act was the act of the bank. The prayer was for foreclosure of the mortgage executed by Guyton to them. The prayer for subrogation was a secondary matter. The language of the prayer is: “If the Court should find necessary from the law and the facts that said priority of lien prayed be given by decreeing the said George M. *63Forman, complainant in cross-bill the right of subrogation to the lien of the Burgess mortgage, Exhibit D, and to the lien of the two judgments prior to the said Carter mortgage hereinbefore set up, and to frame the decree as to Your Honor shall seem meet and proper and according to equity and good conscience.”-
The briefs in this Court in the first appeal were devoted mainly to the question of the priority of the For-man mortgage over the Carter mortgage because of Carter’s release of the latter mortgage and the cancellation by agreement of the Burgess mortgage and the two judgments.
I think that the supposed equity found by the majority arises out of the fact that Forman & Company and Guy-ton misunderstood the law of the State upon the subject of the assignment of mortgage securities and' that in order that substantial justice be done a new contract for the parties should be made and enforced. But in this the majority ignores the rule that equity will not relieve against a mistake of law, without pointing out in what particular the instant case presents an exception which will warrant the interference of equity. In the case at bar both Forman and Guyton entered into the transaction with full knowledge of the material facts and without any special circumstances giving rise to an equity in Forman’s behalf. Notwithstanding this knowledge Forman made the contract affecting his interests under an ignorance with respect to the rule of law controlling the case. See 2 Pomeroy’s Eq. Jurisprudence, Sec. 842; Story’s Eq. Juris. (13th ed.) 108; Hollingsworth v. Stone, 90 Ind. 244; Glenn v. Statler, 42 Iowa 107; Bledsoe v. Nixon, 68 N. C. 521; Hampton v. Nicholson, 23 N. J. Eq. 423; 10 R. C. L. 304.
The cases where equity has given relief because of a *64mistake of law show that the jurisdiction was founded upon exceptions rather than on fixed rules. 10 R. C. L. 308.
It is not contended by Forman that his mistake was one of fact, nor was it a mistake of fact. He thought that because Carter was the President of the banks to whom he had transferred the notes secured by the mortgage he had the right to release the mortgage as the records of Jackson County showed no assignment of the mortgage to them. See his answer and cross-bill and brief of his counsel. In this Forman ignored the law that the assignment of the note carried with it the mortgage and did not inquire of Carter whether he was still the owner of the notes when he executed the release. So Forman made a contract for the extinguishment of the judgment and the Burgess mortgage and made no agreement for subrogation to those liens. But the majority opinion not only allows him to urge this mistake Of law as a basis for interfence by equity, but permits him to do it as against strangers, namely the complainants, which is not permissible in equity. See Campbell v. Lowe, 9 Md. 500.
But if the question of subrogation was presented by the record and in the former appeal this Court in denying the petition for rehearing said it was not, it was a question of fact, viz: was the subrogation claimed based upon an agreement between the parties, express or implied? The Chancellor said it was not. That the evidence did not show any such agreement. The evidence in this record' not only does not clearly show such conclusion to be erroneous, but overwhelmingly supports the Chancellor’s finding of fáct. Yet the majority opinion reverses that finding, thus ignoring a rule established by a long line of decisions by this Court that unless the *65record clearly discloses that a Cancellor’s finding of fact is erroneous, such finding will not be disturbed. See Waterman v. Higgins, 28 Fla. 660, 10 South. Rep. 97; Dean v. Dean, 36 Fla. 492, 18 South. Rep. 592; City of Jacksonville v. Huff, 39 Fla. 8, 21 South. Rep. 74; Lucas v. Wade, 43 Fla. 419, 31 South. Rep. 231; Farrell v. Forest Inv. Co., 73 Fla. 191, 74 South. Rep. 216.
Neither one of the parties claimed that there was a legal subrogation in favor of Forman, nor does the record show any.
The decree of the Chancellor should be affirmed because the law of the case was determined by the first appeal and' for the further reason that no conventional subrogation existed in favor of Forman to the judgment liens and the lien of the Burgess mortgage, no contract was made on which it could rest, the Chancellor found the facts to be so and the record amply supports the finding. See list of Florida cases cited in Florida Compiled Laws, 1914, page 1707, under Note 57.