I concur in what has been said in the opinion by Mr. Justice ADAMS but wish to say further:
When plaintiff amended its bill of complaint it practically abandoned the theory that it held a mortgage lien and proceeded on the theory that plaintiff was entitled to have impressed and foreclosed an equitable lien upon the property described in the mortgage. On review of the order allowing the amendment we said:
"The reamended bill is rather verbose and contains matters that are not altogether necessary but it does not appear that the chancellor erred in holding that 'and the court finds that the allegations of said proposed amendment to plaintiff's bill conform substantially to the proof heretofore submitted to the court herein, and that the plaintiff's said amendment to his amended bill should be permitted to be filed, to conform to the evidence taken before the court and the exhibits filed herein, in order to do justice between the parties and to avoid unnecessary litigation and in order that the entire matter may be disposed of in this suit;' etc. But changing the bill so that the court might enforce it as an equitable mortgage or *Page 645 lien and a prayer to that effect is not a new and different cause of action and the chancellor correctly allowed such an amendment in view of the fact that he allowed further pleadings on the part of the defendant. The court has examined the exhibits and testimony objected to by defendant in his motion to strike. We are inclined to agree with chancellor below in saying, 'the plaintiff's testimony and exhibits are not wholly immaterial or irrelevant to plaintiff's bill and said amendments thereto.'
"The second order of the chancellor assigned as error on this appeal is the order appearing on page 322 of the transcript which denies the motion of the defendant to dismiss the amendment to plaintiff's bill and allows defendant until July 15, 1936, within which to file such other or further answer as it may be advised to plaintiff's bill as amended.
The defendant assigned twenty-seven grounds for dismissing the amendment. We have examined the amendment carefully and do not find that the chancellor erred in refusing to grant the motion. The case is not before the court on its merits but is merely an appeal from the two orders of the chancellor. The chancellor allowed additional time within which to plead and so the case is still open for further pleading and the taking of additional testimony.
Some of the grounds of the motion to dismiss raise close and difficult questions, but it does not clearly appear that the chancellor's rulings were erroneous. We find, therefore, that the chancellor should be affirmed in his ruling on these two motions, and it is so ordered. Remanded for further proceedings not inconsistent with this holding." See Gables Racing Assoc., Inc., v. Persky,
It is one of the contentions of appellee that this Court settled the law of the case and determined the rights of the parties in the opinion and judgment, supra.
This contention is contrary to the record. At most, we held in that opinion that the plaintiff should be allowed to amend as indicated and that under the pleadings as thus amended and the proof theretofore submitted he might be able to enforce an equitable lien for some amount. But when the thus re-amended bill of complaint had been answered and all the testimony had been taken and presented, it was shown conclusively:
(a) That the note and mortgage executed in the name of Gables Racing Association by Samuel Kantor, president, on July 20, 1931, to Nator Holding Co., a corporation, in the sum of $15,000.00 was ultra vires and void as the obligation of the corporation Gables Racing Assoc., Inc., because (1) neither the note nor the mortgage was signed in the name of the corporation. The name of the corporation was "Gables Racing Assoc., Inc." The name signed to the papers was Gables Racing Association. (2) There was no authority granted by the corporation to any one to make and execute such a mortgage and note; (3) Kantor was not president or any other officer of the corporation at the time he pretended to execute the note and mortgage in the pretended name of the corporation. (4) The note and mortgage were executed in a name other than the corporate name by one who was not an officer of the corporation and not under the corporate seal. (5) The pretended note and mortgage were for the sum of $15,000 when, if the corporation owed to the payee anything at all it was *Page 647 no more than $5100.00; (6) The mortgage and note were executed and delivered by Kantor without even the knowledge of Choate who was then president of Gables Racing Assoc., Inc., and was then the officer authorized to execute papers.
It, therefore, follows that if plaintiff was entitled to have impressed and enforced a lien for any amount at all he was limited to an equitable lien to enforce the payment of the amount of money advanced to or received by Gables Racing Assoc., Inc., and no more.
The record shows that Nator Holding Co. was a corporation principally owned and controlled by Kantor and that when Kantor executed the mortgage in the name Gables Racing Association to Nator Holding Co., he did that for the sole purpose of placing that security in the hands of Nator Holding Co., to be assigned to Simon Persky for an obligation which Nator Holding Co., or Kantor, or both, owed Persky pursuant to an agreement between Kantor and Persky that Persky would loan Kantor a certain sum of money and take as security a mortgage from Nator Holding Co., in the sum of $19,900.00 and another mortgage as collateral security from Gables Racing Assoc., Inc., for $15,000.00. Pursuant to this agreement, on June 30, 1931, Persky advanced to Kantor the sum of $7,000.00 in two checks, one for $5100.00 and the other for $1900.00 and thereafter advanced other sums to Kantor. The proceeds of the $5100.00 check was credited to the First National Bank of Miami by National City Bank of New York to be paid to Coral Gables Racing Association, Emmett C. Choate, treasurer, for the account of Samuel Kantor by direction of First National Bank Trust Co., of *Page 648 New Haven, Conn. Five Thousand dollars ($5000) of this money was used to make the cash payment for a conveyance of the lands purchased from Spurway, receiver, by Gables Racing Assoc., Inc. The balance of the purchase price, the balance being $15,000.00, was evidenced by notes and mortgage of Gables Racing Assoc., Inc., to Spurway, receiver. When Bruen and his associates purchased Gables Racing Assoc., Inc., and the stock was transferred from Choate and others to Bruen and his associates, Bruen and his associates paid the $5000.00 originally paid as stated, supra, and assumed the notes and mortgage for the balance of the purchase price which was afterwards paid.
Neither the mortgage executed by Kantor in the name of Gables Racing Association to Nator Holding Co., nor the assignment thereof to Simon Persky, nor the assignment from Simon Persky to Robert Persky was recorded until March 9, 1932, which was long after the sale and transfer of Gables Racing Assoc., Inc., to Bruen and his associates. From this it is seen that when Bruen and his associates repaid to Kantor the $5000.00 which he claimed to have paid on the purchase price of the property they paid the same without any knowledge that he had assigned his right to receive that money and thereby discharged any equitable lien which may have existed on account of the furnishing of that money for the purchase price of the property.
In view of the above stated facts, it is now my conclusion (a) that the alleged mortgage, foreclosure of which was originally sought, and the note which it was given to secure were ultra vires and void as the obligation of Gables Assoc., Inc., (b) that if the transaction *Page 649 brought into being an equitable lien in favor of Nator Holding Co., or of Samuel Kantor it secured no more than $5100.00 that being the total amount received by or used for the benefit of Gables Racing Assoc., Inc., (c) that the equitable lien, if any, was discharged when Bruen and his associates paid to Kantor, Choate and his associates the amount which they had paid on purchase price of the property, including the capital stock of Gables Racing Assoc., Inc., there then being no record of any assignment or lien of any sort from that corporation to Kantor or to his other corporation Nator Holding Co., or to Persky.
My conclusion is further that the chancellor did not reach his decree by a finding of fact based upon conflicting evidence, but that his decree was based upon a misapprehension of the law applicable to the facts of this case as shown by the great preponderance of the evidence if not without conflict.
