## Facts

- Della K. Thomson owned separate statutory real property in Florida.
- Della and her husband, John M. Thomson, executed in Alabama a promissory note and a mortgage conveying Della’s Florida land as security for John’s debt.
- Alabama law treated a married woman as lacking capacity to mortgage her separate estate to secure her husband’s debt, while Florida law permitted such a mortgage when properly executed by husband and wife.
- The note included usurious interest under Alabama law, which imposed forfeiture of all interest for usury.
- Kyle, the noteholder and mortgagee, received payments and proceeds from third parties (including Rankin Roberts and Taylor) intended to be credited against John’s indebtedness.
- A later written settlement agreement between Kyle and the Thomsons expressly excluded the note and mortgage at issue.
- Kyle sued in Florida circuit court to foreclose the mortgage; the court entered a foreclosure decree and also a deficiency money decree against John M. Thomson.
- The Thomsons appealed, asserting (among other defenses) Della’s incapacity under Alabama law, usury, and entitlement to credits for payments.

## Issues

1. Whether the validity of a mortgage conveying Florida real property, executed in another state by a married woman who would lack capacity under her domicile’s law, is governed by Florida situs law or by the law of the place of execution.
2. Whether a promissory note executed and payable in Alabama, though secured by a mortgage on Florida land, is governed by Alabama law as to interest and usury penalties in a Florida foreclosure.
3. Whether a settlement agreement that expressly excludes the note and mortgage bars foreclosure or instead confirms the continuing obligation.
4. Whether usury and payment credits must be raised as defenses in an answer rather than by cross-bill when the asserted credits are less than the mortgage debt.
5. Whether alleging the other party prevented performance of conditions precedent is equivalent to pleading performance or a legal excuse for nonperformance.

## Decision

- The court affirmed the foreclosure decree, but modified it to require proper accounting credits.
- The mortgage on Florida land was held valid and enforceable under Florida law, notwithstanding Alabama’s married-woman incapacity rule.
- Alabama law governed the note’s interest and usury consequences; because the note was usurious under Alabama law, all interest was forfeited in the foreclosure accounting.
- The settlement agreement did not bar foreclosure because it expressly excluded the note and mortgage, thereby recognizing them as existing obligations.
- Usury and payments were treated as defensive matters to be pleaded in the answer (not a cross-bill) when they merely reduce the mortgage debt.
- The deficiency money decree against John M. Thomson was reversed, and the cause remanded for recalculation of the amount due after deducting forfeited interest and proper payment credits.

## Legal Principles

- The law of the situs governs real property conveyances, including the construction, validity, effect, and the parties’ capacity to convey or encumber land located in that state.
- A mortgage on in-state land is enforceable under situs law even if the mortgagor would lack capacity under the law of her domicile or the place of execution.
- The validity and interpretation of a personal obligation executed and to be performed in one state are governed by that state’s law when enforced elsewhere.
- A promissory note executed and payable in one state, though secured by a mortgage on land in another state, is governed by the former state’s law as to the rate of interest and usury penalties; forfeiture of all interest for usury follows into the foreclosure accounting.
- A settlement agreement that expressly excludes a particular note and mortgage does not discharge them and does not bar foreclosure.
- Usury and payment credits that reduce the mortgage balance are proper matters of defense in the answer, and are not suitable for a cross-bill when the credits are less than the debt.
- To recover as for performance, conditions precedent must be substantially performed; alleging the other party prevented performance is insufficient absent allegations of willingness and ability to perform within the required time, and repudiation does not convert nonperformance of conditions precedent into performance.

## Conclusion

The court enforced a mortgage on Florida land under Florida situs law despite contrary capacity rules at the place of execution, applied Alabama law to strip all interest for usury on the Alabama note, required credits for payments in the foreclosure accounting, and reversed the deficiency judgment for recalculation consistent with those deductions.


Thomson v. Kyle, 39 Fla. 582, 23 So. 12 (Fla. 1897)