241 Mass. 388 | Mass. | 1922
This is a suit in equity praying for the cancellation of an assignment of a note and a real estate mortgage assigned to the plaintiff by the defendant Medford Trust Company, or in the alternative to have the mortgages and deeds referred to in the bill reformed by reason of a mutual mistake respecting the
It is plain that the plaintiff is not entitled to have the mortgages reformed as it appears that since the assignment to him the rights of subsequent purchasers for value without notice have intervened. Nickerson v. Massachusetts Title Ins. Co. 178 Mass. 308. Livingstone v. Murphy, 187 Mass. 315. Hillside Co-operative Bank v. Cavanaugh, 232 Mass. 157, 161.
The question then is whether the plaintiff on the facts found by the master is entitled to a decree for a rescission of the transaction. The facts so far as material to the issues involved are, that on April 7, 1919, the defendant New England Realty Company, Inc., hereafter called the realty company, owned a large tract of land in Somerville which included five lots fronting on Gordon Street, numbered 157 to 161, both inclusive; the entire tract was subject to a mortgage held by one Robinson, by the terms of which any lot might be released therefrom by the payment of $200.
On April 7,-1919, the realty company executed and delivered to the Medford Trust Company a mortgage for $3,800 on each of the five lots; each mortgage purported to be given to secure the payment of the grantor’s note of the same date and amount with interest. Contemporaneously with the delivery of the notes and mortgages, the grantor and grantee entered into five separate agreements in writing, by the terms of which the realty company was to erect a building on each of the lots, and the sum of $3,800 was to be advanced by the trust company to the realty company in nine instalments, the same to be paid as the work progressed, and upon reports in writing to be made to the trust company by one Lovering, who was to be employed by the company for that purpose. At the same time the realty company took out five insurance policies, each of which insured in the sum of $5,000 the building to be erected on the several lots, each policy being payable in case of loss to the trust company, as mortgagee, as its interest might appear. Although it was understood by the parties that five houses should be erected, only four in fact were constructed; they were on lots 157 to 160 both inclusive, no work being done on lot 161; the trust company advanced $3,800 on each of the four houses erected.
On or about January 14, 1921, the trust company began foreclosure proceedings under each of the four mortgages covering lots 158, 159, 160 and 161, and advertised a sale of the lots to be held on February 8, 1921. The sales were adjourned from time to time to April 14, 1921, when lots 158, 159 and 160 were sold to the defendant, the Park Trust Company, for $4,250 each; the mortgage on lot 161 had been previously assigned to the plaintiff; no house had been built on that lot, although during the negotiations between the parties both the plaintiff and the Medford Trust Company believed that the house Nos. 86-88 Gordon Street stood on lot 161 and continued in that belief until after August 1, 1921, when the plaintiff being about to sell under foreclosure proceedings was informed that the lot was vacant. The master found that the present market value of lot 161 is about $400. The plaintiff paid the Medford Trust Company for thé assignment $3,800,— the principal of the mortgage debt, and $299.93 accrued interest and expenses incident to the foreclosure proceedings,— and received at the time an assignment of a policy of fire insurance, which had been issued to cover a building on that lot. When he learned that there was no building he abandoned the foreclosure proceedings. The master finds that he incurred expenses in connection with these proceedings amounting to $71. He further finds that the plaintiff is ready, willing and able to reassign the mortgage and note to the trust company.
There is but little controversy as to the facts. It is undisputed that the plaintiff and the representatives of the Medford Trust
The finding that “It was equally open to each of the parties to have ascertained the mistake at any time after the work of construction was begun” does not affect the right of the plaintiff to relief in equity on the ground that he was negligent in not having discovered the mistake before taking the assignment. An examination of the records in the registry of deeds would not ' have disclosed the mistake nor given any information respecting it. From the finding of the master the plaintiff was well warranted in believing that the facts relating to the premises conveyed by the mortgage were peculiarly within the knowledge of the Medford Trust Company; its agent inspected the buildings on the lots from time to time as they were in process of construction, and issued certificates for payments on the instalments as the work progressed; these facts, together with the
There is nothing on this record to show that the parties cannot be put in statu quo, by the Medford Trust Company returning to the plaintiff the amount received, on tender of a reassignment of the note and mortgage.
If material, which we do not decide, the finding that the realty company is now financially unable to make payment of the note held by the plaintiff, does not affect the result. Besides, it was not in evidence that the company was able to pay it when the assignment was made.
The plaintiff’s exception to the admission by the master of evidence offered by the Park Trust Company for the purpose of showing its reasons for the purchase of lots 107 and 157 has become immaterial, in view of the conclusion reached.
The cross bill filed by the Medford Trust Company praying for a reformation of the mortgages and deeds therein set forth “so as to correctly describe the lots of land included therein” cannot be maintained. As previously stated the rights of bona fide purchasers without notice have intervened. The Park Trust ' Company acquired as against the Medford Trust Company an unimpeachable title to lots 157, 158, 159 and 160.
A decree is to be entered ordering the defendant Medford Trust Company, upon tender to it of the note and reassignment of the mortgage, to pay the plaintiff the consideration received for the note and assignment, with costs from the Medford Trust Company. The cross bill is to be dismissed, with costs to the Park Trust Company against the Medford Trust Company.
So ordered.