313 Mass. 1 | Mass. | 1943
The plaintiff seeks judgment against the defendants on account of their promissory note dated September 1, 1922, payable to the plaintiff on demand with interest at five and one-half per cent payable semi-annually, and representing a mortgage loan made by the plaintiff to the defendants and secured by a mortgage of real estate. No question as to the statute of limitations is involved. The trial judge allowed the defendants’ motion for a directed verdict and reported his action to this court upon the stipulation that if this was error, judgment shall be entered for the plaintiff in a stated sum, together with interest from the date of the writ.
There was evidence that the defendants, on January 15, 1931, conveyed the mortgaged real estate to one Powers, the deed containing the following language: “Subject to a first mortgage of $20,000.00 held by the . . . [plaintiff], all the stipulations and agreements of which mortgage the grantee herein agrees to perform.” On January 19, 1931, Powers executed and delivered to the plaintiff a “guarantee” note which recited that the plaintiff was the holder of the defendants’ said note and mortgage and that “I waiving all right to demand and notice, hereby guarantee to said Bank and its assigns the full payment of said note, and the full and perfect performance of all the promises, covenants and agreements of said mortgagor in said mortgage contained, and I also agree and promise to and with said Bank that I will pay all taxes that may be assessed on the premises described in said mortgage, whether the same shall be assessed to me, or to said Bank, or to any other person, and to pay Interest on the same at the rate of 5½% . . . per annum.”
On March 4, 1931, the defendant Roger L. Putnam wrote the plaintiff to the effect that it had sent him the receipt
In 1933 the plaintiff requested of Powers that interest on said mortgage be paid quarterly instead of semi-annually from June 1, 1933, and on November 27, 1935, the plaintiff’s president wrote Powers to the effect that there had been no reduction of the principal of the mortgage loan and that the plaintiff would like to see it reduced, and that “In order to assist you in doing this we are willing to reduce the rate of interest to 5%, dating from the first of December, if you will pay $50.00 quarterly on account of the principal of the loan, to be made on the first of March 1936 when the interest is next due and quarterly thereafter.” On January 7, 1936, the plaintiff’s “investment committee” voted: “Loan . . . L. J. Powers, voted to make rate five per cent from December 1, 1935.” Quarterly payments of $50 each on the principal and interest at five per cent were paid beginning March 3, 1936, and continuing to and including September 3, 1937.
On December 14, 1937, the plaintiff’s “investment committee” voted: “Loan . . . Lewis J. Powers. Voted, to reduce the rate of interest to three and one-half per cent per annum contingent upon three hundred dollars a quarter being paid, from which the interest at the rate of three and one-half per cent would be paid and the balance applied to the principal of the loan.” On December 14,1937, the plaintiff’s president wrote the following letter to Powers: “In accordance with our conversation of December 10th the matter of adjustment of interest rate and principal payments has been approved by our Board of Investment on the following basis: Effective September 1, 1937 and due as of
On December 26, 1937, Powers told the plaintiff that he thought he might not be able to “carry the property longer.” The note in question “was not changed,” and no notations of any votes or any correspondence with Powers were made on it. The plaintiff, on November 10, 1938, brought suit against Powers on the “guarantee note,” but nothing was recovered. There was evidence, however, of a notation, evidently on the back of the note in suit where payments of interest and payments on principal were entered, as follows: “Assumed by Lewis J. Powers 1-19-31.” As bearing upon the value of the mortgaged real estate, there was evidence that the plaintiff’s “investment committee” appraised it at $30,000 on January 17, 1933, at $25,000 on October 22, 1935, and at $22,500 on January 10, 1938. Each of these appraisal values is greater than the amount that was due on the mortgage note at the times of the appraisals,
The defendants had the burden of showing that the time for payment of the note was extended, and that they thereby became discharged of their obligations. Phillips v. Vorenberg, 259 Mass. 46, 70. It is true that the letter of December 14 begins with the statement: “In accordance with our conversation of December 10th the matter of adjustment of interest rate and principal payments has been approved by our Board of Investment on the following basis.” The record contains no other reference to any conversation on December 10, but there is evidence that on December 14, 1937, the date of the letter in question, the board of investment passed the vote hereinbefore set out. From a comparison of the vote with the letter that was written by the president, it is apparent that he went beyond the terms of' the vote. The statement in the vote that the rate of interest
The defendants contend, however, that that letter “was an offer for an unilateral contract and was accepted by Powers when he started to make the payments in accordance with the terms of the letter.” The parties have assumed that the plaintiff’s president had authority to bind the plaintiff, and the defendants contend that “the arrangement” between the plaintiff and Powers was “for one year, effective September 1, 1937,” and that during “that year the bank agreed to quarterly payments of $125.00 on principal, and interest at 3¡H>%.” Obviously, the defendants must stand or fall by our conclusion as to whether a contract was formed, for if no valid binding agreement was made for an extension, their rights have not been impaired, and their obligations have not been affected. Accordingly, in determining this question, we must look to the dealings between the plaintiff and Powers as evidenced by the letter of December 14, 1937.
If we assume, without deciding, that the letter amounted to an offer for an extension of the time of payment of the principal of the mortgage note, the defendants appear to concede that Powers was required to accept the offer by, at least, an act, and they contend that he did so when he
That an offer for a unilateral contract is accepted by the act or acts of the offeree in accordance with the offer is not questioned. See Bornstein v. Lans, 104 Mass. 214; Bishop v. Eaton, 161 Mass. 496, 499; Mathey v. Louis G. Freeman Co. 295 Mass. 361, 362-363. The question here is whether an acceptance can be found where the act or acts of the offeree are a part or parts only of those required by the offer. We are of opinion that our decisions are to the effect that an acceptance of an offer must be in accordance with its terms, that is, by full performance by the offeree, in order that a contract may come into existence, and that there was no acceptance in the case at bar within the meaning of our cases. Wentworth v. Day, 3 Met. 352, 354-355. Bishop v. Eaton, 161 Mass. 496, 499. Buffington v. McNally, 192 Mass. 198, 201. John McClure Estate, Inc. v. Fidelity Trust Co. 243 Mass. 408, 412. Des Brisay v. Foss, 264 Mass. 102, 111. Cohen v. Bailly, 266 Mass. 39, 45. Mathey v. Louis G. Freeman Co. 295 Mass. 361, 363. See Lewis v. Blume, 226 Mass. 505, 507; Jewett v. Warriner, 237 Mass. 36; Elliott v. Kazajian, 255 Mass. 459, 463. The defendants rely upon the case of Price v. Minot, 107 Mass. 49. But in that case there was a written contract signed by both parties, and the rights of the parties were considered as depending upon the “contract.”
In view of our conclusion, it is unnecessary to determine whether an agreement founded upon consideration to reduce the rate of interest discharges the surety. See, how
It follows from what has been said that it was error to allow the defendants’ motion for a directed verdict, and that judgment is to be entered for the plaintiff in accordance with the stipulation.
So ordered.