291 Mass. 168 | Mass. | 1935
The plaintiff is the trustee in bankruptcy of Tremblay Lumber Co., a Massachusetts corporation. As such trustee he brought this action of tort against the defendant to recover damages alleged to have arisen from the foreclosure of a mortgage on real estate owned by the
The evidence of the plaintiff tended to show these facts: The real estate in question prior to 1927 had been purchased by Eugene Tremblay. He improved it as a warehouse in connection with his lumber business. ■ On May 23, 1927, he was indebted to the defendant as maker of nine promissory notes and as indorser of notes of other-, persons. He was also indebted to the defendant on a note signed by him and his wife jointly for $3,000. There was conference between the president of the defendant and Tremblay about the latter furnishing additional security for his indebtedness to the bank by giving a mortgage on his warehouse property. His aggregate indebtedness to the defendant then was in the principal sum of $32,486. A note in that sum was given under date of May 23, 1927, secured by a second mortgage on his warehouse real estate. It was a promise to pay the principal sum and also to "pay on demand such further sums of money as the said Peoples National Bank may advance to me on the security of this mortgage ... or which may hereafter become owing by me to the said Peoples National Bank during the continuance of this mortgage, either for money loaned and advanced, or upon checks, promissory notes or renewals of such notes, or other forms of indebtedness, together with interest . . . .” Substantially the same language was contained in the condition of the mortgage on the real estate securing such collateral note. This note and the mortgage were given as collateral security for the indebtedness of Tremblay to the defendant. On June 15, 1927, Tremblay incorporated his business under the name Tremblay Lumber Co., the present bankrupt. Shortly thereafter he conveyed to the corporation the equity in the real estate subject to a first mortgage to a savings bank and to the second mortgage to the defendant already described, which the grantee assumed and agreed to pay. On June 23, 1927,
It is plain that the note for $32,486 and the mortgage by which it was secured were according to their terms collateral security for the direct indebtedness of Tremblay as maker on notes to the defendant, for his indebtedness as indorser of notes made by others, and for the joint note of himself and his wife. There was no evidence that this latter note had been paid at the time of the foreclosure. The plaintiff contends that acceptance by the defendant of notes of the corporation for $25,085.78 indorsed by Tremblay in place of a like amount of notes by Tremblay as maker, and the surrender of these latter notes stamped as paid, extinguished these notes as an obligation of Tremblay. Even if that contention be accepted, it did not extinguish the $3,000 joint note of Tremblay and his wife. There was no evidence that that note was ever surrendered or extinguished. Testimony in behalf of the defendant was to the contrary. Hence the mortgage might be foreclosed. That contention
There was no testimony in behalf of the plaintiff that the indebtedness secured by the mortgage had been paid in any other way than by notes of the corporation. The burden of proof was on the plaintiff to show that there was no breach of the condition of the mortgage at the-time of the foreclosure in order to prevail on this aspect of the case. That burden has not been sustained. The testimony in behalf of the defendant is explicit to the effect that it has not been paid. While the jury were not obliged to believe that testimony, that does not supply the defect in the proof of the plaintiff’s case. There is nothing in Rogers v. Barnes, 169 Mass. 179, at variance with what is here decided.
The plaintiff contends that he was entitled to go to the jury because of the inadequacy of the bid finally accepted at the foreclosure sale. At the trial the plaintiff conceded "that there was no fraud at the foreclosure.” Tremblay and his wife and attorney were present at the sale. There is nothing in the record to indicate that there was not full
-. There was no error in the exclusion of inquiry whether .the notes of the bankrupt indorsed by Tremblay were protested. The terms of the collateral note and mortgage covered liability arising from such indorsements without protests.
■ There was no error in directing a verdict for the defendant.
Exceptions overruled.