216 Mass. 440 | Mass. | 1914
The plaintiff, who asserts that he is the holder of a second mortgage, seeks to set aside a foreclosure made by the
The mortgage under which the plaintiff claims was given in the first instance under these circumstances: Robert S. Brown in March, 1911, was arrested upon an indictment, and one Fried-berg and another entered into a recognizance in the penal sum of $3,500 for his appearance. Friedberg was an attorney at law, practicing in Boston, and acted as attorney for Brown. In September, 1911, this mortgage was given by Margaret L. Brown, the wife of Robert, to Friedberg to indemnify the latter for his liability as surety upon the recognizance. It is not necessary to determine whether this transaction was illegal under Rule 4 of the Superior Court, which forbade Friedberg as an attorney at law to “become bail or surety in any criminal proceeding in which he is employed,” for the reason that it does not appear that the plaintiff, when he took an assignment of the mortgage, knew that Friedberg was attorney for Brown at the time he became surety for him. Hence it must be assumed in his favor that in this respect he was a bona fide holder of the note and mortgage, and, if so, it was valid in his hands notwithstanding its possible original infirmity. Taylor v. Page, 6 Allen, 86.
The question then presented is, whether when a mortgage and note are given for one consideration and purpose, viz., as indemnity for suretyship on a bail bond, they can be transferred by the first holder before his suretyship is discharged to a third person under an oral agreement that they are to be held as security for another and different obligation of the original mortgagors, and confer upon the transferee the same security and rights against a prior mortgagee that he would have had if the second mortgage had run directly to him. This point is not decided by Joslyn v. Wyman, 5 Allen, 62, Stone v. Lane, 10 Allen, 74, TJpton v. National Bank of South Reading, 120 Mass. 153, and cases of that class, where, a mortgage having been satisfied, the mortgagor orally has agreed that it shall stand as security for a new loan, and later has come into equity to get the mortgage discharged. In such cases it has
In the case at bar the note and mortgage were given as indemnity or security against a liability assumed by Friedberg, the payee and grantee. Before the obligation had been satisfied to secure which the mortgage had been given, and therefore while it possessed all its initial vitality, it was transferred by Friedberg at the request of the original mortgagor to the plaintiff as security for a loan to the original mortgagor. It was a note for a fixed amount in the ordinary form, secured by mortgage and issued as collateral for the .performance of one obligation, and before its satisfaction transferred to a third person at the request of the maker as collateral for a different obligation. This violated no rule of law. The mortgage was not conditional upon the discharge of the mortgagee as surety upon the bail bond, but upon the payment of the note, which itself was held as collateral. The release of the note from its use as collateral by its first holder, before its payment or discharge, and its transfer by him to a new creditor of the maker at the latter’s request, carried with it the mortgage security. The fact that the obligation for which the note and mortgage first were given was discharged after the transfer to the plaintiff was of no consequence. Before that discharge, the note and mortgage had ceased to have any relation to that obligation and had become collateral to a different one. The plaintiff’s legal title on the record is perfect. There is no equity in the mortgagor under these circumstances which would enable her to dispute the rights of the plaintiff under his mortgage. He took it as security at the mortgagor’s request from one in whose hands it was outstanding before it had been paid. The defendants,
But it is contended by the defendants that the plaintiff’s title is defective in another respect. The title of Margaret L. Brown, the plaintiff’s mortgagor, came through a deed from Annie B. Nelson, who was the grantee in a deed from George A. Brown, which recited that the grantor had affixed his seal and that it was sealed in the presence of attesting witnesses, but in truth it did not have a seal affixed thereto. This fact appeared upon the registry of deeds. Margaret L. Brown, however, with her husband, after the deed to her from Annie B. Nelson, lived in the only house situated upon the premises described in the deed, although there was no evidence as to the use made by her of other portions of the premises. It follows from the taking of possession under this deed, invalid for want of a seal, that she became at least a disseisor of the premises which the deed pm-ported to convey to her. Bellis v. Bellis, 122 Mass. 414. Possession of the house under the circumstances disclosed may be inferred to have carried with it possession of the tract conveyed. Williams v. Carty, 205 Mass. 396, 398. Having thus taken possession and become disseisor of the estate, she had a right to convey by mortgage whatever title she had as disseisor. Slater v. Rawson, 6 Met. 439, 445. Wishart v. McKnight, 178 Mass. 356, 362. Percival v. Chase, 182 Mass. 371, 376. Such title gives the plaintiff a standing in court. The confirmatory deed of George A. Brown to Annie B. Nelson, executed after the hearings began in this case, properly sealed and declaring that the earlier deed from him to Nelson also was sealed, obviated the defect in the title arising from lack of a seal on the earlier deed (Holbrook v. Chamberlin, 116 Mass. 155), and, not affecting the strict legal rights of the defendants, cured whatever defects a mere disseisor might encounter in equity. See Gaylord v. Pelland, 169 Mass. 356.
The master had discretionary power to receive evidence of this confirmatory deed even after the hearings had been closed.
The advertisement of the foreclosure sale under the power contained in the first' mortgage, and under which the defendant Graves claims title, in its description of the land to be sold, followed that given in the mortgage, but omitted to except therefrom a tract of about three acres on which was a story and a half dwelling-house called the Rose cottage, which had been released from the lien of the mortgage. It is not necessary to determine whether this misdescription invalidated the sale, because the plaintiff expressly has waived this ground. See, however, Chace v. Morse, 189 Mass. 559,561; Moore v. Dick, 187 Mass. 207; People’s Savings Bank v. Wunderlich, 178 Mass. 453.
There are circumstances bearing upon the good faith of the defendant Graves in making the foreclosure to be considered. The duty of one acting under a power of sale in a mortgage is to use that reasonable degree of effort and diligence to secure and protect the interests of the mortgagor, the owner of the equity of redemption and junior lienors, to the observance of which he is bound by the obligation of good faith. Montague v. Dawes, 14 Allen, 369, 373. New England Mutual Life Ins. Co. v. Wing, 191 Mass. 192. The master has found that the mortgage was purchased by Graves in the name of Willard, with the intent of instituting foreclosure proceedings and enabling him to acquire the premises by purchase at such sale, if he could do so without paying a larger sum than he was willing to pay, (which may not have been a fair price); that he instituted foreclosure proceedings within fifteen days after his purchase of the mortgage, and allowed the shortest period permitted by law to elapse between the first advertisement and the sale. This advertisement was printed in a newspaper of limited circulation in the neighborhood, although five other newspapers circulated there to a much larger extent. The paper was selected by the attorney for Graves in good faith but without information from Graves, who lived near the land sold, as to the newspaper which would furnish the best medium of spreading information of the sale. No other notice of the sale was given. Graves knew that two neighbors, Goodwin and Haskins, were desirous of purchasing portions of the premises and would be likely to be bidders at a sale if they knew about it, but he gave
The master correctly excluded evidence to prove the amount which the plaintiff advanced when he took the assignment of the second mortgage. The mortgage having become a valid obligation in his hands through foreclosure, although at first taken as collateral, he is entitled to enforce his contract according to its terms. A decree is to be entered setting aside the foreclosure sale and allowing the plaintiff to redeem.
So ordered.