Williams v. Whitinsville Savings Bank

| Mass. | Jun 26, 1933

Crosby, J.

This is an action of contract or tort in which the plaintiff seeks to recover $3,000, the balance unpaid and remaining to be advanced by the defendant on a mortgage note, or for damages in that amount for having alienated or released the real estate held as security therefor, for less than the face of the note. The defendant’s answer is a general denial. The case was called for trial and a-jury was empanelled. The trial judge on motion of the defendant directed a verdict in its favor at the close of the plaintiff’s opening statement to the jury. To this direction the plaintiff excepted. One Roscoe, a builder, borrowed money from the defendant on a construction loan mortgage in 1927. It was agreed that the bank was to advance $11,000, the total amount of the loan payable in instalments as the building reached various stages of completion, and $8,000 was so advanced under this agreement. Roscoe, after the first mortgage was given, to the defendant bank, placed a second mortgage on the property to a third person for $1,500. During the construction of the building the second mortgagee foreclosed his mortgage. The notice of foreclosure sale recited that the property would be sold subject to the first mortgage of $11,000. At the time of the foreclosure sale the house was not completed and the builder, who in the meantime became bankrupt, was in default. There were two instalments to be paid by the first mortgagee but those instalments were not paid because the builder had stopped work on the house. The property was sold at the foreclosure sale under the second mortgage for $1,500 to a purchaser who was not the owner, mortgagor, or any one connected with the bank or with the second mortgagee. This purchaser, having completed the building, made the following arrangement with the bank: the bank discharged the first mortgage and took a new mortgage from the purchaser for $11,000, crediting the $8,000, previously advanced to Roscoe, and advancing to the purchaser the sum of $3,000. The plaintiff, as trustee in bankruptcy of the estate of Roscoe, seeks in this action to recover from the defendant the difference between the first mortgage of $11,000 and $8,000 actually advanced to Roscoe under the construction loan agreement, contending that upon completion of the building the bank was obliged to pay that difference of $3,000 to him.

In the colloquy at the bench during which the plaintiff stated his case to the court, it was admitted by the plaintiff that when Roscoe was adjudged bankrupt he had ceased work on the building and left it uncompleted. In these circumstances, as Roscoe failed to complete performance of the conditional loan agreement, the defendant was under no obligation to make further advances to him, and as the plaintiff as trustee has no greater rights than his bankrupt at the time of the adjudication, the defendant was not required to make any advances to him. Bennett v. Aetna Ins. Co. 201 Mass. 554" court="Mass." date_filed="1909-05-17" href="https://app.midpage.ai/document/bennett-v-ætna-insurance-6430640?utm_source=webapp" opinion_id="6430640">201 Mass. 554, 556. The law was the same under the insolvency laws of this Commonwealth. Pratt v. Wheeler, 6 Gray, 520.

The completion of the building by some one other than the owner created no such obligation on the part of the bank as contended for by the plaintiff. O’Connell v. Root, 254 Mass. 218" court="Mass." date_filed="1926-01-05" href="https://app.midpage.ai/document/oconnell-v-root-6437306?utm_source=webapp" opinion_id="6437306">254 Mass. 218. Joly v. Stoneman, 271 Mass. 352" court="Mass." date_filed="1930-05-27" href="https://app.midpage.ai/document/joly-v-stoneman-6439462?utm_source=webapp" opinion_id="6439462">271 Mass. 352, 356, 357. Rothenberg v. Newton Mortgage Corp. 273 Mass. 399" court="Mass." date_filed="1930-11-26" href="https://app.midpage.ai/document/rothenberg-v-newton-mortgage-corp-6439706?utm_source=webapp" opinion_id="6439706">273 Mass. 399. The case of Cox v. Hoxie, 115 Mass. 120" court="Mass." date_filed="1874-04-17" href="https://app.midpage.ai/document/cox-v-hoxie-6417670?utm_source=webapp" opinion_id="6417670">115 Mass. 120, cited and relied-on by the plaintiff, is distinguishable in its facts from the present case. There it was decided that where a mortgage was given as security for a loan of $2,560 and an agreement to advance a further sum on certain conditions, the mortgage could not be redeemed by payment of the amount actually lent so long as the liability under the agreement to make further advances existed. In the case at bar, in view of the facts shown, no such obligation rests upon the defendant. Accordingly, the defendant could make any arrangement which it saw fit to make with the purchaser of the equity of redemption at the foreclosure sale under the second mortgage.

It follows that the direction of the verdict for the defendant upon the statement of the plaintiff made to the judge and jury of the evidence which he expected to present was proper. The státement of expected evidence failed to show any legal liability on the part of the defendant. It was said in Farnham v. Lenox Motor Car Co. 229 Mass. 478" court="Mass." date_filed="1918-02-28" href="https://app.midpage.ai/document/farnham-v-lenox-motor-car-co-6434331?utm_source=webapp" opinion_id="6434331">229 Mass. 478, at page 482: “. . . there is no fundamental objection to a ruling of law made upon a fair statement of what the evidence is expected to be. In reason there is no distinction between a rule of this nature and the well recognized practice of this court in appropriate cases of permitting a ruling to be made on the footing that on the opening statement of counsel to the jury no case is shown in law.” As a verdict was rightly directed for the defendant in accordance with its motion, the entry must be

Exceptions overruled.