J. M. Realty Investment Corp. And Roderick Mee v. Richard I. Stern

Plaintiff-appellee, Richard I. Stern, for $220,000 sold five apartment buildings, which at the time were encumbered by a $150,000 first mortgage held by the Dade Federal Savings and Loan Association (DFS), to the defendant-appellant, J. M. Realty Investment Corporation. Defendant corporation paid the plaintiff $35,000 in cash and executed a purchase money mortgage in the sum of $181,953.77 which represented the aggregate of the first mortgage to DFS and the amount due plaintiff as a second mortgage. By the terms thereof, the purchase money mortgage executed by the defendant was considered to be a "wrap-around" mortgage and plaintiff mortgagee was obligated thereby to make the payments on the senior DFS mortgage. Pursuant thereto, on November 15, 1971 defendant-appellant began to make the required $1,526.95 monthly payments to the plaintiff. However, defendant defaulted on the payment due June 15, 1973 and on subsequent payments, and plaintiff thereupon instituted the instant action to foreclose the mortgage. While the action was pending, plaintiff continued to make the monthly payment on the DFS senior mortgage. DFS was not made a party to the foreclosure suit. The court entered a final judgment of foreclosure, determined that the amount owed plaintiff by the defendant was $185,850.62 for principal and accrued interest, plus court costs and attorneys fees, and ordered that if payment was not forthcoming, the property was to be sold. The judgment further provided that the Clerk of the Court shall pay the DFS, the holder of the first mortgage, the principal, interest and prepayment penalties owing, unless plaintiff is the successful bidder at the sale, in which case the clerk shall not pay off the first mortgage. Subsequent thereto, defendant filed a motion for relief from final judgment of foreclosure wherein it alleged that less than $50,000 was actually owed to plaintiff, since the remainder of the judgment was owed to DFS which was not a party to the action and did not desire prepayment of its mortgage. After a hearing was held thereon, the trial judge denied the motion and defendant appeals the denial thereof.