280 Mass. 295 | Mass. | 1932
The plaintiffs, .carpenters and builders, repaired some of the damage done by fire to property then owned by one Levinton on ¡which the defendant held a mortgage. The work was done under contract with Levinton which contained an assignment to them of his interest in money then “due or to become due to him from the respective fire insurance companies who are insuring the fire loss on said building.” . The contract also set out: “The said owner does hereby authorize and empower and request the insurance companies covering the loss on said building to make the drafts totaling thirteen hundred thirty-eight ($1,338) dollars payable to the said contractors directly and the balance of the fire loss to be payable to him.” After work had been begun the plaintiffs went to
The trust company held a first mortgage for $6,000 and insurance policies, issued to Levinton as owner, payable to it as first mortgagee and to one Freedman as second mortgagee. It received $2,492 from the settlement of fire loss. It became owner on the foreclosure made after the plaintiffs’ work was completed. The mortgage was in default at the time of the fire and of the contract; principal, interest and taxes were overdue. No surplus existed after application of the amount of the foreclosure sale and the receipts from insurance to the mortgage debt. The defendant pleaded the statute of frauds. The trial judge
In Palmer Savings Bank v. Insurance Co. of North America, 166 Mass. 189, Field, C.J., declared the law of this Commonwealth to be, where the loss upon a policy of fire insurance was made payable to a mortgagee as his interest may appear, that, if the mortgage is outstanding at the time of the loss and the mortgage debt exceeds the loss, the mortgagee can recover the whole amount payable for the loss in his own name. The mortgagor is entitled only to any balance remaining after the mortgage is paid. Hence the assignment made here by Levinton to the plaintiffs conveyed to them only the balance which might remain for him after any amounts due upon the first and second mortgages had been paid. There was no such balance. They took nothing by the assignment. In this state of the law, there is nothing to justify finding that the defendant bank agreed to defer to the claim of the plaintiffs any claim which it might have to the insurance. The statements of Bies must be taken to mean that the bank would respect the assignment, and would pay over to the plaintiffs anything properly coming to them. If another meaning were given his language it would amount to a promise to pay the debt of Levinton. Such a promise is enforceable only if it or some memorandum of it is in writing. G. L. c. 259, § 1, Second. Admittedly there was no written promise or memorandum. In such an aspect of the case the statute of frauds is a complete defence.
• There is here no element of fraud. Money had and received will not lie. The plaintiffs did not enter into their contract with Levinton in reliance upon any representation made by the defendant. They may have continued to perform their contract with him through mistaken belief that, whatever might be due upon the mortgage, they would be paid from the insurance money before any other application would be made of it by the trust company; but they do not testify that but for such belief they would not have gone on, nor that they
Had the plaintiffs sought a mechanic’s hen for work done under their contract, the prior mortgagees would be preferred to them. G. L. c. 254, § 7. They are in the unfortunate position of any workman who has added value to a mortgaged building under contract with the owner and has not been paid before the mortgage is foreclosed. The mortgagee or purchaser at foreclosure is not bound to pay either the contract price or the value added by the work, although what he obtains may be enhanced in value by that work. Neither has any relation of contract or quasi contract with the workman. The buyer, speaking generally, has paid in the price bid the value of the work. He is not enriched unjustly. In the case before us, the defendant has, seemingly, both the building enhanced in value by the work for which the insurance money was intended to be applied under the contract, and the insurance money; but, in fact, through the price paid at the foreclosure the increased value due to the contract work has been made good to the owner, Levinton. The legal situation is the same as if the price had been paid to the owner. The latter has received it in the credit of the price bid upon the mortgage debt.
It follows that the judge was right in his ruling; and, pursuant to the stipulation, since the evidence would not support a verdict for the plaintiffs, the order must be Judgment for the defendant.