200 Mass. 414 | Mass. | 1909
The defendant pledged to the plaintiff three mortgages, as collateral security for the payment of his promissory note. The contract of pledge gave the plaintiff “ full power and authority to sell and assign and deliver the whole of said property, or any part thereof, or any substitute therefor, or any addition thereto, at any brokers’ board, or any public or private sale, at the option of said trust company or its
The first question is whether the plaintiff could make a valid foreclosure of the mortgage under the power of sale contained therein. It was an assignee of the mortgage, and was within the terms of the power given by the mortgagor. As the holder of the mortgage title it had the right to foreclose, unless restrained by the terms of its contract with the defendant as pledgor. The contract was silent on this point. The broad power to sell the pledged property did not in itself give a right to foreclose the mortgage. But the pledgee of property has the control of it for the time being, and he represents not only his own interest, but that of the pledgor, in taking any proper action for the preservation of it and the collection and care of its proceeds. If the pledged property is a promissory note or other evidence of debt, he may collect it when it becomes due. If it is stock in a corporation he may collect the dividends. If it is a mortgage upon land and regularly assigned to him, he may foreclose the mortgage for a breach of the condition, if he deems such action best for the interests of himself and the pledgor. 22 Am. & Eng. Encyc. of Law, (2d ed.) 895, 896, and cases cited. The right of a pledgee to foreclose a mortgage is recognized in this Commonwealth, although most of the cases
It follows that the plaintiff, after the foreclosure, held the real estate in trust for the defendant, and it had no right to sell it without regard to his interests. The terms of the contract of pledge gave it no right to make such a sale as that which the defendant offered to prove. The third instruction requested should have been given.
Exceptions sustained.