287 Mass. 97 | Mass. | 1934
These are separate petitions, brought in the Land Court by different and antagonistic petitioners, for the registration of title to the same land. The Land Court ordered registration in the name of Lewis P. Kaufman as trustee, upon his petition. The contestant in that petition and the petitioner in. the other, the Federal National Bank of Boston, alleged exceptions.
On July 28, 1930, one Celia Green, a widow, was the trustee of the Back Bay Real Estate Trust named in a recorded declaration of trust relating, not to the locus, but to other specified real estate and “any and all lands, leases and mortgages on real estate that may be conveyed or assigned to me as Trustee.” The trust so declared was described by the Land Court as “an ordinary real estate operating trust without naming any original beneficiaries, but reserving or creating power in the trustee to issue one hundred shares to shareholders, who would then become beneficiaries.” No shares were ever issued, and no cestui que trust ever existed. In truth, Celia Green was the sole
In the operation of this so called trust, Celia Green had become indebted to the Federal National Bank of Boston to the amount of $26,750, of which $6,000 was secured by a mortgage upon the locus, given by her to the bank. This constituted the only encumbrance upon the locus. The title to the locus stood in the name of Celia Green, free from trust.
On July 28, 1930, Celia Green went to the bank and saw its then president. He asked to have the mortgage on the locus increased to $25,000, as security for the debt. She signed as trustee a new note to the bank for $26,750, reciting that she had deposited as collateral security therefor three mortgage notes secured respectively by three mortgages on different lots of land, one of which was the locus. The president directed the attorney for the bank to prepare a mortgage upon the locus for $25,000 from Celia Green as an individual to herself as such trustee, and an assignment of that mortgage from her as such trustee to the bank. The documents were drawn, executed and delivered accordingly, and the mortgage and, assignment were recorded on July 29, 1930. The assignment was in the statutory form appended to G. L. (Ter. Ed.) c. 183. Accompanying the mortgage was the usual mortgage note for $25,000, signed by Celia Green and payable to Celia Green, Trustee of Back Bay Real Estate Trust under a specified declaration of trust, or order. This note was delivered to the bank with an indorsement reading, “Waiving demand and notice, Celia Green Trustee of Back Bay Real Estate Trust.” As a part of the transaction the bank discharged the earlier mortgage securing the amount of $6,000.
On June 6, 1933, the bank by its receiver foreclosed the $25,000 mortgage by sale, and bought in the locus, giving to itself, under the power of sale in the mortgage, a foreclosure deed which was duly recorded. It now claims a title proper for registration.
After all this, on August 3, 1933, Celia Green gave to the petitioner Kaufman, as trustee under a recorded decía
The mortgage was indeed void. Celia Green could not owe money to herself, nor hold a valid promissory note against herself, nor give herself a valid mortgage to- secure a note in which she was both maker and payee. Gorham’s Admr. v. Meacham’s Admr. 63 Vt. 231. Cameron v. Steves, 9 New Brun. 141. The common practice of drawing a negotiable instrument to one’s own order is supported on the theory that the instrument acquires vitality when indorsed. Navin v. McCarthy, 240 Mass. 447. Roby v. Phelon, 118 Mass. 541, 542. Foley v. Hardy, 119 Kans. 183, 42 Am. L. R. 1064, and note. Since the mortgage was void, Celia Green retained an unencumbered title in fee simple and full power to create a valid legal or equitable mortgage in favor of the bank or any other mortgagee.
When Celia Green indorsed and delivered the mortgage note, it became valid in the hands of the bank. Navin v. McCarthy, 240 Mass. 447. She purported to assign the void mortgage to the bank by an instrument under seal, with the intention of making the bank the holder of a valid mortgage upon the locus in the sum of $25,000. If construed as an assignment, the instrument would be ineffective, for there was no valid mortgage which could pass by assignment. But for centuries, where a deed of real estate shows by its language that it was intended to pass title by one form of conveyance, by which however title could not pass, courts have made the deed effective by
Upon this principle, can the purported assignment of mortgage be construed as a mortgage, in order to carry out the undoubted intent to make the bank the holder of a valid mortgage for $25,000? The purported assignment bore a seal. The signature of Celia Green as trustee was as effective to convey her individual property as though she had signed simply her name. At law, the official and
Thus it appears that the purported assignment contained all the essentials of a mortgage deed of land. Construed in the light of the general intent with which it was made, it conveyed to the bank the fee in the locus so as to vest in the bank the same interest as mortgagee as was set forth in the invalid mortgage to which reference was had. The purported assignment was itself a mortgage. Under the power of sale, thus incorporated into the effective mortgage by reference to the invalid mortgage, the bank lawfully foreclosed and obtained a good legal and equitable title, proper for registration. The supposed defect in title, upon which Kaufman relied, did not exist. We need not
The exceptions of the bank are sustained, and final decrees are to be entered, dismissing the petition of Kaufman and registering title in the bank. G. L. (Ter. Ed.) c. 231, §§ 124, 142. Silverstein v. Saster, 285 Mass. 453, 458, and cases cited.
Ordered accordingly.
For convenience, the Tercentenary Edition of the General Laws is cited in this opinion; but the provisions cited were in force in 1930 when the instruments under construction were made and recorded.