NCNB NATIONAL BANK OF FLORIDA, N.A., A NATIONAL BANKING ASSOCIATION, APPELLANT,
v.
BARNETT BANK OF TAMPA, N.A., A NATIONAL BANKING ASSOCIATION, APPELLEE
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NCNB National Bank appeals a foreclosure judgment, challenging the priority of competing mortgage liens on the same property. The court reverses, holding that while Barnett Bank's initial mortgage lien is superior to NCNB's, Barnett Bank's subsequent advances under a future advance clause are subordinate to NCNB's mortgage because Barnett Bank had agreed in writing not to make such advances.
Barnett Bank's mortgage lien is superior to NCNB's only to the extent of the initial $100,000 loan. The additional amount of Barnett Bank's lien attributable to the future advance made in breach of its written agreement with NCNB is subordinate to NCNB's mortgage lien.
[1] A future advance made under a mortgage, secured by a future advance clause, may be subordinate to a subsequently recorded mortgage if the prior mortgagee breached an agre…
[2] A mortgagee's agreement not to make future advances under a mortgage, upon which a subsequent mortgagee relies, can bind the prior mortgagee even if the mortgagor did not…
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Join FLexlaw to unlock all legal intelligence“We agree that appellee's mortgage lien is superior to that of appellant to the extent of $100,000, which was the amount of the initial loan by appellee to the mortgagor secured by appellee's mortgage.”
Establishes that Barnett Bank's initial mortgage lien has priority over NCNB's as to the original loan amount.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceBoth NCNB and Barnett Bank held mortgages on the same property. Barnett Bank's mortgage was recorded first and secured an initial loan. NCNB subsequen…
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PER CURIAM.
We reverse the final judgment of foreclosure of a real estate mortgage with respect to the determination that appellee’s mortgage lien is superior to that of appellant.
We agree that appellee’s mortgage lien is superior to that of appellant to the extent of $100,000, which was the amount of the initial loan by appellee to the mortgagor secured by appellee’s mortgage. Appel-lee’s mortgage was timely recorded and was known to appellant when appellant subsequently made a loan to the mortgagor secured by appellant’s recorded mortgage on the same property. However, we do not agree that the additional amount of the lien of appellee’s mortgage which includes an advance made by appellee to the mortgagor under the future advance clause of appel-lee’s mortgage subsequent to the making of appellant’s mortgage was superior to appellant’s mortgage lien.
Prior to the making of appellant’s mortgage appellee agreed in writing with appellant that appellee would make no advances under appellee’s mortgage like the advance described above. It is undisputed that appellee, by making the foregoing future advance, breached that promise upon which appellant had relied in making the loan which was secured by its mortgage.
Section 697.04(l)(b), Florida Statutes (1985), which provides a method for the mortgagor to limit the amounts secured under a future advance clause in a mortgage, does not, in our view, mean that a mortgagee like appellee may not-be bound to another mortgagee by an agreement like that here upon which the other mortgagee relied as did appellant. Section 697.04(1)(b) does not address the circumstances of this case. Thus, we do not agree with appel-lee’s argument which would interpret section 697.04(1)(b) to permit no method of limiting future advances under a mortgage like that involved here except for the method provided in that section for the mortgagor to use. See Green, “Search Real Estate Records Before Making Future Advances,” 58 Fla.B.J. 704, 705 (Dec.1984). Absent specific statutory language which does not exist in section 697.04(1)(b), we do not conclude that the legislature intended to effectuate the type of change to longstanding practices of mortgage lenders which would be brought about by appel-lee’s interpretation.
Reversed and remanded for proceedings consistent herewith.
RYDER, A.C.J., and LEHAN and PATTERSON, JJ„ concur.