
    Jimmy R. SMITH and Patricia Segrest Smith, Appellants, v. John Vernon HAGGARD and Wife, Jennifer Ann Haggard, Appellees.
    No. 1D05-4645.
    District Court of Appeal of Florida, First District.
    Feb. 28, 2007.
    Rehearing Denied April 23, 2007.
    Bret A. Moore, of The Moore Law Firm, P.A., Niceville, for Appellants.
    Mark Welton and John C. Bryan, Jr., of Welton & Williamson, LLC, Crestview, for Appellees.
   BROWNING, C.J.

Appellants appeal a final judgment of foreclosure and allege that the trial court erred by not determining that Appellants tendered legal payment to Appellees prior to the entry of the final judgment of foreclosure that barred its entry. We agree and reverse.

This appeal stems from an action to foreclose an agreement for deed given by the Appellees to Appellants. After considerable litigation the trial court entered the two orders that form the basis of this appeal. One order was entered on June 3, 2004, and provides that Appellants owe Appellees $90,815.30 and that such amount must be paid on or before May 12, 2004, to the office of Appellees’ attorney, and if not paid on that date, upon submission of an affidavit from Appellees’ attorney of nonpayment, a final judgment would be entered ex parte. Proceedings after the June 3, 2004, order necessitated entry of another order specifying and ordering payment by Appellant of $90,815.30, plus a per diem interest charge of $25.09 from May 12, 2004, until payment of such amount to Appellees’ attorney on or before October 15, 2004. If not paid, the order further provided that the remedies available to Appellees under the court’s order of June 3, 2004, were available to Appellees.

After entry of the October 13, 2004, order, Appellants, on October 19, 2004, tendered a good and sufficient check for the amount owed to Appellees under the October 13, 2004, order, made payable jointly to Appellees and Washington Mutual Bank, the holder of the mortgage lien on the property to be conveyed by Appel-lees to Appellants; the mortgage indebtedness was the debt of Appellees, who could not give Appellants a marketable title without removing this lien by payment. Appellees rejected such tender on the ground that Appellants were required to pay the full amount only to Appellees, and that they would have to trust that Appellees would pay Washington Mutual Bank and clear the title to the property Appellants were purchasing. In other words, Appellees insisted on Appellants’ receiving an encumbered title at closing and trusting Appellees to do the proper thing, pay off Appellees’ mortgage indebtedness. Appellants prudently rejected such possibility, paid Washington Mutual Bank directly, and paid the balance owed to Appellees solely. These payments would have provided to, and for, Appellees’ benefit, the total amount due to them under the judge’s orders, but Appellees rejected such payment as well and continued the litigation before the trial court by moving ex parte for entry of a final judgment of foreclosure. Appellants made a timely objection to entry of such final judgment.

At the ensuing hearing, Appellants argued that their tender of such payment constituted “payment” as a matter of law, but the trial court disagreed and ordered the lands sold at a foreclosure sale. Ap-pellees bid in the property for $50,000.00, leaving a deficiency of $48,815.30, plus interest. Appellants were unable to bid because of their funds being under the control of their financing bank, and they did not have the $1,300.00 clerk’s fee that was imposed.

The precise issue presented by this appeal has never been addressed by an appellate court of this state. However, there are cases that deal with the elements of “legal payment” that give guidance. See Goble v. Frohman, 901 So.2d 830 (Fla.2005); Nehme v. Smithkline Beecham Clinical Lab., Inc., 863 So.2d 201 (Fla.2003). These cases define “payment” not only as direct payment, but also the discharge of a creditor’s debt by a debtor in certain circumstances. Here, Appellees’ debt, a mortgage indebtedness that had to be satisfied before Appellees could convey an unencumbered title to the property to Appellants as required by the parties’ agreement for deed, would have been discharged had not Appellees refused Appellants’ tender. We conclude that in these circumstances, Appellants’ tender of the joint check to Appellees constituted legal payment.

We are not unmindful of, and consider persuasive on this decision, the long-standing equitable principle that substance prevails over form. See Schupler v. E. Mortgage Co., 160 Fla. 72, 33 So.2d 586 (1948). Our decision is buttressed by this maxim. Appellants, by their tender of the joint check to Appellees, provided them with every dollar owed to them if Appellants performed as required by the parties’ agreement for deed. To hold that payment was improper because Appellees wanted to personally pay their lien indebtedness to Washington Mutual Bank violates such maxim.

Moreover, to hold otherwise would lead to an absurd result and impose burdensome consequences on the real estate closing market. Closing attorneys and title companies close thousands of transactions each business day. Where the property involved in a transaction is subject to an existing lien, which is the rule rather than the exception, at closing any lien-holders are paid off and the amount credited to the party that created the lien. Payment to the lienholder is considered payment to the debtor party because it is for the benefit of such party by discharging that party’s debt and clears the title for the purchasing party, as required by most contracts to purchase. The consequences of not following such a rule would expose closing agents to professional liability, foster litigation, and encourage unwanted business practices.

For these reasons, we REVERSE and REMAND for proceedings consistent with this opinion.

KAHN, J., concurs in result; DAVIS, J., dissents with opinion.

DAVIS, J.,

dissents.

I respectfully dissent. I cannot find that the Smiths properly exercised their right of redemption because they failed to comply with the trial court’s orders.

On June 28, 2000, the Smiths purchased a house from the Haggards and agreed to pay the Haggards the purchase price plus interest and taxes in monthly installments. Because the' Smiths failed to make some of the payments, the Haggards brought a foreclosure action. At some point after the sale of the property, which was never recorded, the Haggards obtained a mortgage on the property through Washington Mutual Bank.

The parties entered into a settlement agreement by which the Smiths either could pay sums owed as of January 23, 2004, or could give written notice of their intent to close a loan and close the loan within thirty days of that notice. The Haggards moved for entry of final judgment due to the Smiths’ failure to comply with the settlement agreement. The Smiths opposed the motion arguing that the Haggards would not cooperate with the Smiths’ lending institution. On June 3, 2004, the court entered an order setting the amount of money due and directing the Smiths to pay the money to the Haggards’ counsel. The court also stated that the Haggards’ counsel could execute an affidavit and a proposed final judgment of foreclosure if the Smiths failed to comply with the order.

In response to motions filed by both parties, the trial court entered another order on October 13, 2004, again stating that the Smiths should pay the Haggards’ attorney and that payment was due no later than October 15, 2004. The Smiths did not tender payment until October 19, 2004, and the Haggards’ attorney refused to accept the check because it was made jointly payable to the Haggards and Washington Mutual Bank. On October 26, 2004, the trial court entered a final judgment of foreclosure stating that the property would be sold on November 29, 2004, unless the Smiths paid the Haggards or their attorneys the total amount owed. On November 10, 2004, the Smiths filed a notice of payment of redemption amount stating that they paid a portion of the sums owed directly to Washington Mutual Bank and the remaining sums to the court registry.

The trial court found that the Smiths failed to properly exercise their right of redemption because the Smiths failed to deliver payment by October 15. The trial court also found that the Smiths’ attempts to exercise their right of redemption by paying the Haggards and the mortgage company jointly and by paying off the mortgage directly were improper. The court noted that this was not a normal real estate closing and that it should not have been treated as such by the Smiths. The trial court confirmed the sale of the property.

I cannot agree with Judge Browning’s position that the Smiths properly exercised their right of redemption in this case because the Smiths failed to comply with the trial court’s orders. The trial court repeatedly set deadlines for the tender of payment and the Smiths repeatedly failed to meet these deadlines. Additionally, the Smiths should have tendered payment directly to the registry of the court or to the mortgagee, which was the Haggards in this case, not to the mortgagee and a third party. Indian River Farms v. YBF Partners, 777 So.2d 1096, 1099 (Fla. 4th DCA 2001); Saidi v. Wasko, 687 So.2d 10, 12 (Fla. 5th DCA 1996). If the Smiths truly wanted to exercise their right, all they had to do was comply with the trial court’s order. Therefore, I would affirm the trial court’s final judgment of foreclosure and confirmation of the sale of the house. I note that there is no majority opinion of precedential value in this case, but merely a judgment of this court to reverse and remand for additional proceedings.  