Florida/Georgia Personal Injury & Workers Compensation

...covered "any and all future advances, either in money or supplies made by the party of the second part to the part of the first part." This clause is valid, Bullard v. Fender, 140 Fla. 448, 192 So. 167, although a statute enacted in 1941, now being Section 697.04 F.S....

...ll secure advances, readvances after a partial payment or reduction of the balance to zero, and so forth until the agreement is terminated. A mortgage used to secure future advances will contain an express "future advances" provision consistent with section 697.04, Florida Statutes (2008), and will thereby confer on those advances the same date of record priority as the original mortgage....

...age to the extent that monies were not actually distributed prior to the filing of the notice of commencement. The appellants contend that appellees' mortgage was not entitled to priority because of its failure to meet the requirements of Fla. Stat. § 697.04 (1971)....

..., providing the mortgagee, by the terms of his agreement with the mortgagor, was obligated to make the advances. See 80 A.L.R.2d 179, 191. The Florida Supreme Court announced support for this view in a case arising prior to the passage of Fla. Stat. § 697.04....

...On the other hand, where the agreement gives the mortgagee the option of making future advances, most courts give priority to the claims of intervening lienors as to all payments made by the mortgagee after notice of the liens. IV American Law of Property § 16.73 (1952). Section 697.04 originally pertained only to agricultural loans. In 1953, the statute was amended to read as follows: "697.04 Future advances may be secured....

...ies signed the construction loan statement setting forth the conditions upon which First Federal Savings and Loan Association of Eustis would advance the funds to the mortgagor. The court held that the mortgage fell squarely within the protection of § 697.04 such that its lien was prior in dignity to subsequent mechanics' liens even with respect to advances made by the mortgagee subsequent to notice of mechanics' liens....

...Thus, appellees can make a reasonable argument that even assuming that their mortgage does not comply with the statute, it nevertheless should be given priority over the mechanics' liens in the manner that mortgages for obligatory future advances were given in Florida when there was no statute. However, in the passage of § 697.04 and subsequent amendments thereto, the legislature appears to have pre-empted the field of mortgages to secure future advances, at least with respect to the priorities of third persons without actual notice thereof. Though not necessary to its decision, the Supreme Court in Downing v. First National Bank of Lake City, Fla. 1955, 81 So.2d 486, did say that "Section 697.04 F.S....

...That the agreement, by its terms did not impress a lien for future advances on collateral other than equipment. (The trial court ruled that the agreement was ambiguous in this respect.) The resolution of Point 1 requires a determination of the applicability to personal property of Sec. 697.04, Fla. Stat., between January 1, 1967 when the Florida Uniform Commercial Code became effective, and July 1, 1970 when Sec. 697.04 was amended to eliminate its reference to personalty....

...Stat., provides: "The following laws or parts of laws, although not repealed, shall yield to and be superseded by any provisions of the code which may be inconsistent or in conflict therewith: Chapter 697 — Instruments deemed mortgages and the nature of a mortgage." Sec. 697.04, as it existed at the time the security agreement in question was executed, covered both real and personal property, and provided: "697.04 Future advances may be secured (1) Hereafter, any mortgage or other instrument given for the purpose of creating a lien on real or personal property ......

...mum principal amount which must be specified in such mortgage or other instrument... ." In summary, Sec. 679.204(5) of the Code is broad and permits security agreements to include future advances with or without commitment to make the advances. Sec. 697.04 likewise permits this, but goes on to affirmatively require that the instrument state the maximum principal amount of unpaid future advances that may be secured at any one time. The security agreement in question admittedly did not comply with this provision. The question then devolves whether this provision of Sec. 697.04 was superseded by the Code, because it was either inconsistent with or in conflict with the Code. Professor Daniel E. Murray, in 26 U. of Miami L.Rev. 72, at page 88, concluded there was a conflict: "Original section 697.04(1) of the Florida Statutes provided that any mortgage or other instrument creating a lien on real or personal property which provided for future advances was required to provide for the maximum amount of the future advances and for a period not to exceed 20 years. This section was in conflict with a UCC provision, section 679.9-204(5) of the Florida Statutes. As a result, section 697.04 has been amended to delete any reference to personal property." In the case of In Re Sanelco, 7 U.C.C....

...Reporting Service 65 (M.D.Fla. 1969), the Referee in Bankruptcy found neither a conflict nor an inconsistency between the statutes. Following In Re Sanelco, the Florida Legislature, in Extraordinary Session, passed Chapter 70-34, Laws of Florida, 1969, which amended Sec. 697.04 to delete any reference to personal property, thereby leaving it applicable only to realty....

...t was inconsistent with the legislative intent of the Code. The decision in In Re Sanelco, supra, was just such an interpretation. To this decision, the legislature immediately responded by enacting Chapter 70-34, Laws of Florida, which amended Sec. 697.04 to delete any reference to personalty, stating in the preamble: "Whereas, section 697.04, Florida Statutes provides that any mortgage or other instrument given for the purpose of creating a lien on real or personal property may secure future advances as well as the existing indebtedness, and that "the total unpaid balance...

...a dollar ceiling, and Whereas, the Florida Uniform Commercial Code further provides, in section 680.10-104(3), Florida Statutes, that chapter 697, Florida Statutes, entitled "Instruments deemed mortgages and the nature of a mortgage," which includes section 697.04, is "not repealed (but) shall yield to and be superseded by any provisions of the code which may be inconsistent or in conflict therewith," and Whereas, primary objectives of the Florida Uniform Commercial Code include the achievement...

...local peculiarities in the requirements for security agreements, and Whereas, it is the intent of this legislature that security agreements covering future advances under the Uniform Commercial Code shall not be required to meet the requirements of section 697.04, Florida Statutes, ......

...." We believe it abundantly clear that part of the legislative intent in adopting the Uniform Commercial Code in Florida was to require that future advance provisions of security agreements covering personalty meet only the requirements of the Code. To permit the challenged requirements of Sec. 697.04 to survive the adoption of the Code would not assist in "making uniform the law among the various jurisdictions", but would create diversity and multiformity....

...the law governing commercial transactions", but would burden and complicate it. It would do violence to the expressed objective of "achieving uniform coverage of the subject matter" by fragmentizing the law on an identical point. We hold that the future advance requirements of Sec. 697.04, Fla....

...Stat., as they relate to personal property, are inconsistent with the legislative intent embodied in the provisions of the Florida Uniform Commercial Code, and were superseded by Code Sec. 679.204, Fla. Stat. The security agreement in question was, therefore, not required to comply with the provisions of Sec. 697.04, supra, and the trial court erred in so ruling. Appellant secondly argues that the agreement, even if not rendered invalid by Sec. 697.04, did not impress a lien for future advances on collateral other than equipment....

...ed, thus endangering the bank's security, since the civil suit posed the threat of civil damages, as well as the possibility of criminal liability. We find that the trial court's interpretation of the agreement signed by the bank is overbroad. Under Section 697.04(1)(a), Florida Statutes, any mortgage which secures not only existing indebtednesses, but also future advances made within 20 years of the original mortgage, whether the advances are obligatory or at the option of the lender, has prior...

...elf. "Any mortgage or other instrument given for the purpose of creating a lien on real property ... may, and when so expressed therein shall, secure not only existing indebtedness, but also such future advances ... as are made within 20 years... ." § 697.04(1)(a), Florida Statutes (1993) (emphasis added)....

...s recorded, which was prior to the marriage of the mortgagor. The appellant contends that there was no lien on the property until after the $10,000 was paid over to the mortgagor at his request, which was subsequent to his marriage to the appellant. Section 697.04, Florida Statutes, F.S.A., provides: "(1) Hereafter, any mortgage or other instrument given for the purpose of creating a lien on real or personal property, or both, including agricultural, horticultural, or fruit crops, planted, growi...

...put upon the property.' Jones on Mortgages, Sec. 457, Vol. 1, 8th Ed." A provision in a mortgage that it covered future advances was held to be valid, citing Bullard v. Fender, supra, although the scope of such a provision was said to be limited by section 697.04, Florida Statutes, F.S.A....

...gages subordinated to Snead's liens because the mortgages did not specify that they secured future advances; and (2) to have the lenders' undisbursed construction funds declared as held in trust to pay for labor and materials supplied by Snead. *519 Section 697.04, F.S....

...We hold that Snead, having actual knowledge of the facts, cannot complain that the constructive knowledge afforded by the recording statute was imperfect or incomplete. Cone Bros. Constr. Co. v. Moore, 141 Fla. 420, 193 So. 288 (1940). Moreover, the lenders' mortgages satisfy the requirements of § 697.04, F.S. 1975. To speak of a construction loan mortgage as one securing "future advances," and therefore subject to § 697.04, blurs a distinction carefully drawn by Mr....

...696, 6 So.2d 629 (1942), or not, Franklin Savings & Loan Co. v. Fisk, 98 Fla. 683, 124 So. 42 (1929), construction loan mortgages written in terms of a present debt, but intended to secure postponed disbursements, were held effective against liens of subsequent laborers before the 1941 Legislature enacted § 697.04....

...lidate the prior lien of a mortgage given to secure repayment of a certain loan, the disbursement of which was postponed. Rather, the legislation was intended to limit the time in which future advances could be made under the security of a mortgage, § 697.04(2), and to change the law concerning *520 previously more troublesome varieties of mortgages for "future advances," such as those under which the mortgagee has only an option, but no obligation, to make advances. Silver Waters Corp. v. Murphy, 177 So.2d 897, 900-901 (Fla.App.2d, 1965). Just as before 1941, it was held afterwards without aid from § 697.04 that advances upon a note and mortgage for a stated sum certain are secured by the mortgage lien: "As to third persons the recording of the mortgage was notice that the $10,000 was already advanced or to be advanced and as between the parties, the mortgagee admits that she was bound to advance the money upon demand by the mortgagor." Simpson v. Simpson, 123 So.2d 289, 293 (Fla.App.2d, 1960) (emphasis added). Snead points out that the 1963 Legislature changed the operative words of § 697.04 to provide that mortgages "may, and when so expressed therein shall, secure not only existing indebtedness, but also such future advances......

...taxes have not been paid. We conclude that we should not ignore the non-payment 12 “Each advance” includes both the initial disbursement of a mortgage loan and any subsequent advances, while “future advance” refers to subsequent disbursements described in section 697.04, Florida Statutes....

...er this paragraph and under paragraph (a) or subsection (2). If the mortgage, trust deed, security agreement, or other evidence of indebtedness subject to the tax levied by this section secures future advances, as provided in s. 697.04, the tax shall be paid at the time of recordation 26  on the initial debt or obligation secured, excluding future advances; at the time and so often as any future advance is made, the t...

...adjustment interval of not less than 6 months shall be taxable as a future advance only to the extent such increase is a computable sum certain when the document is executed. Failure to pay the tax shall not affect the lien for any such future advance given by s. 697.04, but any person who fails or refuses to pay such tax due by him or her is guilty of a misdemeanor of the first degree....

...1,165.79. Appellant contends that since the two subsequent notes contained no reference to any security, they are not subject to the open-end provision contained in the mortgage. We disagree. The above-mentioned statute governing open-end mortgages (§ 697.04, Fla.Stat.) contains no requirement that sub *91 sequent notes make reference to the security of the mortgage....

...gage 3 and must be paid prior to recording the mortgage. Section 199.052(7)(d), Florida Statutes (1971), provides: “(d) If the mortgage, deed of trust, or other lien subject to the tax levied by this chapter secures future advances, as provided in § 697.04, the tax shall be paid at the time of execution on the initial debt or obligation secured, excluding future advances; at the time and so often as any *1005 future advance is made, the tax shall be paid on all sums then advanced....

...secured by the mortgage. The shortcoming of the cases proffered by counsel for the Debtor is that these cases deal with future advances secured by mortgages on real property as opposed to personal property and as such are governed by Florida Statute 697.04(1). Since the adoption of the Uniform Commercial Code by the State of Florida, future advances with reference to personal property are governed by Section 697.04(1) of the Florida Statutes. Under Florida Statute § 697.04(3), there is no requirement for the enforcement of a future advance clause that the future advance be made within the scope of the agreement or within the parties contemplation....

...Lewis, Fla., 73 So.2d 72 , dissolved the injunction in the cause. It also appears that the lower court’s injunction involved in Lewis v. Lewis, Fla., 66 So.2d 260 , was not entered until March 4, 1953, fifty-six days after Art Lewis pledged his stock to Frank Miller to secure future advances, and that under Section 697.04, F.S.A....

...ny such advance unless and until "the tax due” on each advance has been paid. Id.; see Glenn Wright Homes (Delray) LLC v. Lowy, 18 So.3d 693, 696 (Fla. 4th DCA 2009). Steinberg . reasons that section 201.08(l)(b) should be read in conjunction with section 697.04(l)(b), Florida Statutes (2010), entitled “Future advances may be secured.” Steinberg points to language in section 697.04(l)(b), which states: “any increase in the principal balance as a result of negative amortization or deferred interest shall be secured by the mortgage.” Reading sections 201.08(l)(b) and 697.04(l)(b) together, Steinberg concludes “that any increase in the principal balance as a result of negative amortization is secured by the mortgage” and is a form of taxable future advance. The problem with this argument is. that nothing in section 697.04 expands or contracts the concept of a taxable future advance set forth in section 201.08(1)(b). See also Wane v. Loan Corp., 552 Fed.Appx. 908 (11th Cir.2014). Section 697.04 primarily concerns the securing of future advances under a mortgage; it is not a taxation statute....

...y such advance unless and until the tax due” on each advance has been paid. Id.; see Glenn Wright Homes (Delray) LLC v. Lowy, 18 So. 3d 693, 696 (Fla. 4th DCA 2009). Steinberg reasons that section 201.08(1)(b) should be read in conjunction with section 697.04(1)(b), Florida Statutes (2010), entitled “Future advances may be secured.” Steinberg points to language in section 697.04(1)(b), which states: “any increase in the principal balance as a result of negative amortization or deferred interest shall be secured by the mortgage.” Reading sections 201.08(1)(b) and 697.04(1)(b) together, Steinberg concludes “that any increase in the principal balance as a result of negative amortization is secured by the mortgage” and is a form of taxable future advance. The problem with this argument is that nothing in section 697.04 expands or contracts the concept of a taxable future advance set forth in section 201.08(1)(b). See also Wane v. Loan Corp., 552 F. App’x 908 (11th Cir. 2014). Section 697.04 primarily concerns the securing of future advances under a mortgage; it is not a taxation statute. Section 201.08(1)(b) creates an exception to the general rule of taxability of future advances: Notwithstanding the aforestated...

...erminated on January 7, 2003, and the Homeowners Association obtained title free of this encumbrance. Razak argues that section 95.281 is not controlling here because the future advances clause of the mortgage provides him the protection provided by section 697.04(1)(a), Florida Statutes (2004), which states: Any mortgage or other instrument given for the purpose of creating a lien on real property, or on any interest in a lease-hold upon real property, may, and when so expressed therein shall,...

...filed for record as provided by law. Razak maintains that based on this language, the future advance clause represents a lien on the property for twenty years even though no future advances have been made. Razak thus suggests that the provisions of section 697.04 prevail over those of section 95.281 when a future advance clause is contained in the mortgage and that accordingly, the lien securing the initial promissory note in the instant case was valid for twenty years regardless of whether future advances were actually made....

...Razak's argument also suggests that this statute creates an irrevocable lien to secure future advances for twenty years even if the mortgaged property is transferred after the initial debt is satisfied and no future advances are made. We cannot agree. Section 697.04 specifies that such a lien only secures those future advances that "are made within [twenty] years....

...Accordingly, we conclude that pursuant to section 95.281, the lien created by the mortgage to secure the promissory note terminated five years after the note matured. *620 Because no future advances were made, any potential lien that might have encumbered the property pursuant to section 697.04 did not exist....

(1927); Walls v. Endel, 20 Fla. 86 (1883). . Section 697.04, Florida Statutes, F.S.A. . McEwen v. Growers’

encumbering the collateral and creating a lien. § 697.04(l)(a), Fla.Stat. (1987). The initial mortgage

...rate the absence of this triable issue. We cannot agree. In support of its motion for summary decree plaintiff showed that its mortgage was executed and recorded November 10, 1964, securing future advances in accordance with the provisions of F.S.A. § 697.04, and that defendant’s judgment of November 9, 1964, was not recorded until July 14, 1965....

...sure action. We reverse. In November of 1990, the Mustards executed a mortgage on their property in Putnam County to Barnett Bank (not a party to this action) to secure payment of a $50,050 note. This mortgage is an open-ended mortgage authorized by section 697.04, Florida Statutes, and contains a future advance clause which states as follows: This mortgage is given to secure not only existing indebtedness, but also such future advances, whether such advances are obligatory or are to be made at...

...granted, bargained, sold, and conveyed, and by these presents does grant, bargain, sell, and convey, unto Mortgagee that tract or parcel of land in Walton County . . . . Paragraph 24 provided: Future Advances: Pursuant to F.S. 697.04, this mortgage shall secure not only the existing indebtedness evidenced by the note but also such future advances as may be made by Mortgagee to Mortgagor within 20 years from the date hereof to the same extent as if such future advances were made on the date of the execution of this mortgage....

lenders’ mortgages satisfy the requirements of § 697.04, F.S. 1975. To speak of a construction loan mortgage

...Carol City project. “(b) No maximum principal amount to be secured thereby, plus interest thereon, and any disbursements made for the payment of taxes, levies, or insurance on the property described therein is specified in said deed as required by Section 697.04 Florida Statutes [F.S.A.], and said deed is not enforceable as a mortgage by reason of the fact that Plaintiff has failed to show compliance with Section 199.141 Florida Statutes [F.S.A.], and neither said deed nor the 27 other deeds e...

...re-existing debt to be included within its terms or unless it can be shown that the third party otherwise had notice that the specific pre- existing debt at issue was to be included within the grasp of the dragnet clause. 3 Section 697.04(1)(a), Florida Statutes (2005), states that a mortgage on real property “may, and when so expressed therein shall, secure not only existing indebtedness, but also such future advances ....

Federal falls squarely within the protection of Fla.Stat. 697.04, F.S.A. and that its lien thereunder was entitled

...vances under appellee’s mortgage like the advance described above. It is undisputed that ap-pellee, 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....