Cooper v. ATLANTIC SAV. ASS'N

249 Md. 228 (1968) 239 A.2d 89 COOPER v. ATLANTIC FEDERAL SAVINGS & LOAN ASSOCIATION OF FORT LAUDERDALE [No. 138, September Term, 1967.] Court of Appeals of Maryland. Decided March 7, 1968. The cause was submitted on brief to HAMMOND, C.J., HORNEY, MARBURY, BARNES and SINGLEY, JJ. Submitted by William A. Franch and Wray & Serio for the appellant.

Submitted by Albert J. Goodman, Theodore G. Bloom and Goodman & Bloom for appellee. MARBURY, J., delivered the opinion of the Court. The defendant-appellant in this case, J. Milton Cooper, and his then wife, Elaine E. Cooper, on August 5, 1960, signed ²²⁹ a note in favor of the plaintiff-appellee, Atlantic Federal Savings and Loan Association of Fort Lauderdale, in the amount of $30,000, which was secured by a mortgage on a piece of real property located in Palm Beach County, Florida. Subsequent marital discord resulted in the separation of the Coopers and the payments on the mortgage fell in arrears.

Thereafter, on March 19, 1964, a complaint was filed in the Circuit Court of Palm Beach County, Florida, in Chancery, to foreclose the mortgage. At that time the appellant was not a resident of Florida and personal service of process could not be had upon him. However, constructive service was had by publishing in a local newspaper and mailing a copy of the notice to the appellant who then resided in Washington, D.C. The Florida court, in exercise of its jurisdiction thus obtained, proceeded with the foreclosure proceedings and as the appellant did not appear to defend, a decree pro confesso was entered, followed by a summary final decree and the property was sold to the appellee, the highest bidder, for $1,000. The property was subsequently resold for $26,000 and the appellant was credited with this amount, minus costs.

This left a deficiency of $9,293.49. The appellee, on finding that the appellant was then a resident of this state, obtained the services of a Maryland attorney and brought the present action to recover the deficiency. The declaration was filed in the Circuit Court for Anne Arundel County along with a notice to plead, a motion for summary judgment, and an affidavit in support of the motion. After service of process upon him, the appellant filed a "Demurrer to Declaration in Assumpsit and to Motion for Summary Judgment." On September 9, 1966, there was a hearing on the demurrer before Judge Sachse, who, on January 10, 1967, overruled the demurrer.

The appellant then entered a general issue plea and after further affidavits and admissions, Judge Pitcher granted the appellee's motion for summary judgment and entered judgment on April 26, 1967, for the appellee against the appellant in the amount of $9,293.49, with interest from April 20, 1967, and costs of suit. The appellant apparently concedes the validity of the foreclosure proceedings and the amount of the deficiency, and the only matter now before this Court is the correctness vel non ²³⁰ of the overruling of appellant's demurrer. The bases for the demurrer are a Florida statute, two Florida cases, and paragraph 15 of the final decree rendered by the Florida court. It is apparent to us that the lex loci contractus governs this case and this seems to be conceded by the parties.

The statute, Florida Statutes, Section 702.06, provides as follows: "Deficiency decree; common law suit to recover deficiency. — In all suits for the foreclosure of mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a deficiency, should one exist, shall be within the sound judicial discretion of the court, but the complainant shall also have the right to sue at common law to recover such deficiency, provided no suit at law to recover such deficiency shall be maintained against the original mortgagor in cases where the mortgage is for the purchase price of the property involved and where the original mortgagee becomes the purchaser thereof at foreclosure sale and also is granted a deficiency decree against the original mortgagor." The contention of the appellant is that the Florida courts have construed this statute to mean that when, pursuant to a foreclosure action, a court retains jurisdiction for the purpose of entering a deficiency decree, that this is a bar to bringing an action at law to collect a deficiency under the mortgage. A reading of the statute and the cases cited does not show this to be the case. On its face, the statute does give the complainant the right to maintain a suit at common law to recover a deficiency unless three circumstances are present, i.e., where the mortgage was for the purchase price and the mortgagee is the purchaser at the foreclosure sale and also is granted a deficiency decree against the original mortgagor. The last requirement did not occur in this case and no deficiency decree was