272 Mass. 223 | Mass. | 1930
This is a bill in equity brought by the owners of a parcel of land, situated in Salisbury in this Commonwealth, to restrain the defendant from foreclosing a mortgage and to have the mortgage cancelled on the ground of fraud, or, if the mortgage be held to be valid, to ascertain the amount of the mortgage debt.
The bill alleges that the plaintiffs are the owners of the land in question, having derived title through one Elvira True; that the defendant claims to hold a mortgage on the premises for $1,000, given him by said Elvira True on August 13,1925, and is about to foreclose the same; that at the time of the giving of. the mortgage Mrs. True was incapacitated by reason of age, illness and impaired mentality, and was induced to make the conveyance through the fraud, duress and undue influence of the defendant. The bill also alleges that the mortgage was given without consideration and that no part of the alleged debt has been paid.
The case was referred to a master who made the following findings: The defendant from 1889 to 1896 was a retail
About 1898 or 1899 the parties had a settlement. The amount due from the defendant for the conveyance of Mrs. True’s interest in the Newburyport property was credited on his bill for groceries and repairs and a note for $500 evidencing the balance was executed by Mrs. True and given to the defendant. The note was negotiable in form and bore interest but no maturity date. About every five years thereafter a renewal note was executed by Mrs. True and the old note was surrendered. No interest was ever paid on any of the notes or called for by the defendant, although each was in the sum of $500 with interest. In 1893 or 1894 Mrs. True spoke to him about his bill and asked him what she should do about it, and he told her “to let it go” for the time being.
The master further found that the only resources of Mrs. True were the produce of the property on which she lived, and that at no time did she have sufficient funds to pay her indebtedness without mortgaging the property. When the last of the renewal notes prior to the' one in suit was given she expressed regret at her inability to pay it. In June or July, 1924, the defendant informed her that the note would be due in about a year and he felt that she should do something with it; that on the next renewal he would draw up a different form and include some of the interest. To this she replied that she wanted him to have all that was coming to him and wished she could have paid him before. On August 13, 1925, the defendant and bis son went to Mrs. True’s home and there she executed the note and mortgage in question. The mortgage was for the sum of $1,000 with
It is the contention of the plaintiffs that the only valid consideration for the mortgage note was the obligation of Mrs. True arising out of the $500 note executed by her in 1919 or 1920; that when each note in the series was executed by Mrs. True it was presumed to be taken in payment of the then preexisting indebtedness on the preceding note; that there was a partial failure of consideration for the $1,000 note to the extent of $350, this sum representing the difference between $1,000 and $500 plus interest on the note given in 1919 or 1920.
It is plain that the defendant’s mortgage was available only to secure the payment of such sums as should be due him in equity and in good conscience under recognized rules of law. Saunders v. Dunn, 175 Mass. 164. Hence, to the extent, if any, to which there was a failure of consideration, the defendant could not recover on the note or enforce the claim against the security. G. L. c. 107, § 51. Parish v. Stone, 14 Pick. 198. Earle v. Reed, 10 Met. 387. Aikey v. Gardner, 243 Mass. 77, 84, 85. But unless the
The fact that some of the debt arising by way of interest was outlawed by the statute of limitations is immaterial in view of the mortgagor’s express promise in writing to pay. Chace v. Trafford, 116 Mass. 529. Custy v. Donlan, 159 Mass. 245. Clark v. Jones, 233 Mass. 591. Whether the renewal notes effected payment of the first and succeeding notes depended on the intention of the parties and the other circumstances attending the transaction. Fowler v. Bush, 21 Pick. 230. Taft v. Boyd, 13 Allen, 84. Dodge v. Emerson, 131 Mass. 467. Eames v. Cushman, 135 Mass. 573. Agawam National Bank v. Downing, 169 Mass. 297, and cases cited.
“The long established presumption here existing is that the giving of a negotiable note is a discharge and extinguishment of prior indebtedness between the parties on which it is founded. While that presumption is rebutted where it appears that thereby the security held for the original debt will be released, nevertheless it is ordinarily a question of fact whether such a result follows.” Stebbins v. North Adams Trust Co. 243 Mass. 69, 73. Curtis v. Hubbard, 9 Met. 322, 328. Brewer Lumber Co. v. Boston & Albany Railroad, 179 Mass. 228. Paddock & Fowler Co. v. Simmons, 186 Mass. 152, 153. Brown v. Bishop, 225 Mass. 276. Upon the facts found by the master and the reasonable inferences to be drawn therefrom, the conclusion is justified that neither the defendant nor Mrs. True intended that the obligation to pay interest was abandoned, or should be affected in any respect, by the giving and acceptance of the renewal notes. It is apparent from the statements made by her in 1893 or 1894, in 1919 or 1920, and in 1924 and 1925 that at all times she was anxious to pay the defendant what she owed him, and would have done so if she had been able. When the mortgage note was given she understood that it was for an amount largely in excess of previous notes, but intended that it should
Although if a negotiable promissory note is given for a preexisting debt it is presumed that the creditor intended to receive it in payment of such debt, this presumption may be rebutted and controlled; “and the fact that such presumption would deprive the creditor taking the note of the substantial benefit of some security, such as a mortgage, guaranty, or the like, has been held to be sufficient evidence to meet and repel the presumption.” Lovell v. Williams, 125 Mass. 439, 441, 442. Cary Brick Co. v. Wheeler, 210 Mass. 338, 340.
As the plaintiffs have not argued that the master’s finding, that the execution of the mortgage note was free from fraud or duress, was unwarranted, that question is treated as waived.
The master has found that the notes were not understood by the parties to be taken in satisfaction of the obligation to pay interest; they therefore cannot be given that effect. It follows that the final decree must be affirmed.
Ordered accordingly.