Gabel v. Drewrys Limited, U.S.A., Inc.

68 So.2d 372, 39 A.L.R.2d 1083 (1953)

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Nature of the Case

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Facts

McCaffrey, a beer distributor, became indebted to Drewry's Limited (P). After receiving several bad checks from McCaffrey, P procured a note from him for about half the amount of the debt, secured by a mortgage on the property at issue. The parties entered a concurrent agreement which recited a payment schedule on the debt, and P's agreement to forbear 'for the time being' any legal action to collect the debt as long as McCaffrey adhered to the schedule. Prior to taking the mortgage, P had examined the record for any prior interests on the same property and found none. P promptly recorded its mortgage. The property at issue was subject to a prior unrecorded mortgage. Upon learning that McCaffrey was in financial trouble, the senior mortgagee (D) recorded his mortgage. McCaffrey later defaulted in his agreement with P, which filed suit to foreclose the mortgage, making D a party to the action. D cross-claimed to foreclose his mortgage. The lower court found that P's mortgage was superior. D appeals, arguing that P's mortgage was not supported by consideration, and was therefore not enforceable.