285 Mass. 90 | Mass. | 1933
This is a suit in equity by one claiming as owner of the equity of redemption of certain real estate, which was subject to a mortgage, against a foreclosing holder of the mortgage (hereinafter called the defendant), for an accounting as to the alleged surplus in the hands of the defendant after satisfying from the proceeds of a foreclosure sale the requirements of the mortgage conditions. The Standard Oil Company of New York, Inc., by order of court was made a codefendant. It appeared and filed a .plea and answer, alleging that, as holder of certain tax titles, it was entitled to have an accounting between it and the defendant alone. The judge found that the “Standard Oil Company is not entitled to such accounting and to the surplus in the hands of the defendant Haines shown thereby.” The principal defendant, by plea and answer, contended that on the facts shown on the record the plaintiff at the time of the sale in foreclosure did not occupy a position which entitled him to the accounting he claims or to the relief given him by the final decree. The case was heard by a judge of the Superior Court who made a statement
The report of material facts discloses, in substance, that the $2,000 note and mortgage described in the amended bill, in 1926, were owned by the administratrix of Hiram W. Phillips, the mortgagee therein named; that the mortgaged property had been sold for the taxes of 1922, on January 9, 1924, for the taxes of 1923, on January 7, 1925, and for the taxes of 1924, on September 29, 1925; that the mortgage note was long overdue and after July 2, 1925, the interest on the mortgage was in arrears; that for the convenience of the administratrix the mortgage was assigned to the defendant; that the defendant’s attorney took the matter up with the plaintiff, who had inherited the property mortgaged from the original mortgagor; that the plaintiff was unable to pay the note and foreclosure proceedings were had under the power of sale contained in the mortgage; that the property was sold to Grace L. Donovan for the sum of $2,800 and the property conveyed to her as set forth in paragraph 2 of the bill; that the attorney for the assignee paid out of. the proceeds of the sale to the administratrix the principal and interest due on the mortgage note, paid the charge of the auctioneer and the cost of advertising, and had in his hands a balance of $552.17, from which the court ordered a deduction of $100 as a reasonable attorney’s fee, leaving a balance of $452.17. The report states that “The said tax titles are accurately described in Section 1, paragraphs a, b and c, of the defendant Haines’s answer; and the further facts therein recited relative to the conveyances of said tax titles by the purchasers thereof [Ida M. Hodsdon and Reginald G. Hodsdon] to Grace L. Donovan on July 13, 1926, . . . and the conveyance by Grace L. Donovan to the defendant Standard Oil Company on September 10,1931, . . . save as
The report further states that “The plaintiff made no claim upon the defendant Haines for an accounting of the surplus of the proceeds realized at the foreclosure sale until on or about October 13, 1931, after the property had been conveyed by Donovan to the Standard Oil Company. Shortly afterwards this suit was begun”; that “No claim for such an accounting appears to have been made at any time by Grace L. Donovan or her predecessor[s3 in title under the tax deeds, or by the Standard Oil Company until the filing of its answer on December 3, 1932, to the plaintiff’s substitute bill of complaint.” The report further states that “It appears from the foreclosure deed and affidavit attached thereto that the mortgaged property was advertised to be sold, and was conveyed — ‘subject to any and all . . . tax titles. ’ I deem it a reasonable inference that the price bid by the purchaser was for the mortgaged property subject to such tax titles as were outstanding.” No question of parties is raised. The original purchasers of the tax titles appear to be residents of Vermont.
The trial judge, in view of the facts admitted by the pleadings and upon the demands and notices of the respective parties to admit facts, and upon all of the evidence, found and ruled “that the plaintiff is entitled to an accounting from the defendant Haines of the surplus proceeds realized from said foreclosure sale, and that there is due
The defendant’s contention is that, on the facts shown on the record, the plaintiff at the time of the sale in foreclosure did not occupy a position which entitled him to the accounting he claims or to the relief given him by the final decree. This contention is based upon the ground that right of the plaintiff arises from equitable consideration only, that the mortgage was a paramount encumbrance which included an irrevocable power to sell the whole property, and that the plaintiff’s right to a surplus arising on the exercise of this power is subject to liens such as other mortgages, mechanic’s liens and judgment liens. This is undoubtedly true as to mortgages, liens and judgments which attach to the equity of redemption subsequently to the mortgage foreclosed, but is not applicable to existing mortgages or other liens which are paramount to the mortgage foreclosed. Such prior mortgages and liens do not carry a right in law or equity to any excess received in foreclosure of a subsequent mortgage. Wiggin v. Heywood, 118 Mass. 514. Silva v. Turner, 166 Mass. 407. Antonellis v. Weinstein, 258 Mass. 323. Cook v. Basley, 123 Mass. 396. Moreover, here the foreclosure sale was subject to any and all tax titles, and the trial judge made the reasonable inference therefrom “that the price bid by the purchaser was for the mortgaged property subject to such tax titles as were outstanding.”
It is to be noted that the defendant Standard Oil Company which acquired tax title to the premises through mesne conveyance from the purchasers at the tax sales of the mortgaged premises, and made claim to an accounting and to the surplus in the hands of the defendant, was denied relief and did not appeal. See Chute v. Cronin, 273 Mass.
Decree reversed.