Atlas Mortg. Co. v. Tebaldi

• Decision Date: 28 December 1939
• Citation: 24 N.E.2d 554,304 Mass. 554
• Parties: ATLAS MORTGAGE COMPANY v. PASQUALE TEBALDI.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

304 Mass. 554

24 N.E.2d 554

ATLAS MORTGAGE COMPANY v. PASQUALE TEBALDI.

Supreme Judicial Court of Massachusetts, Hampden.

December 28, 1939

September 21, 1939.

Present: FIELD, C.

J., DONAHUE, QUA DOLAN, & COX, JJ.

Mortgage, of real estate: foreclosure.

No invalidity in a sale in foreclosure of a real estate mortgage was shown by evidence that the mortgagee and the mortgagor came to an understanding before the sale that the mortgagee would accept a sum in cash and a new mortgage for the balance: that the terms announced at the sale were "cash in ten days" but the mortgagee's representative then told the mortgagor that the understanding would be carried out if he purchased; and that without requesting an adjournment the mortgagor, after bidding up to a certain amount which was all he could obtain in cash within ten days, allowed the property to be bid in by the mortgagee for a price substantially less than its fair value.

CONTRACT. Writ in the District Court of Springfield dated December 14, 1935.

Upon removal to the Superior Court, the action was tried before Hurley, J. M. J Donovan, for the defendant.

L. A. Stone, for the plaintiff.

DOLAN, J. This is an action of contract to recover a balance and interest due on a promissory note for $17,080, secured by a mortgage of real estate, given by the defendant to the plaintiff. The mortgage was foreclosed by sale, and this action is to recover a deficiency remaining after the application of the purchase price received at the sale.

At the trial before a jury the plaintiff introduced the note and rested. The signature was admitted. G.L. (Ter. Ed.) c. 231, Section 29. The special defence relied upon by the defendant was that the "sale was conducted improperly, not in good faith and as it should have been conducted, wherefore the plaintiff is not entitled to recover." The jury returned a verdict for the defendant. Thereafter, under leave reserved, the judge ordered the entry of a verdict for the plaintiff in the sum of $3,543.30 (the amount agreed at the trial to be due if the defendant is liable).

The case comes to this court on two bills of exceptions: one containing the defendant's exceptions to the action of the judge in ordering the entry of a verdict for the plaintiff; and the other containing the plaintiff's exceptions to the exclusion of certain evidence, and a statement that, in the event the defendant's exceptions are not sustained, the plaintiff's exceptions are waived.

The evidence material to the exceptions saved by the defendant is as follows: The mortgage given by the defendant to secure his note was in the usual statutory power of sale form. G.L (Ter. Ed.) c. 183, Sections 8, 18, 21, and appendix. In July 1935, there being a default in payments on the note, the plaintiff proceeded to foreclose the mortgage. The usual notice was published in a newspaper. The terms of sale stated in the notice were: ". . . $1000.00 will be required to be paid in cash by the purchaser at the time and place of sale as earnest money. Other terms to be announced at the sale." The notice was signed: "Atlas Mortgage Company, present holder of said Mortgage, by James E. Davis, its President and Treasurer." The name of Troy T. Murray appeared on the notice as attorney for the mortgagee. Prior to and at the time of the sale, one Figoni, an attorney at law, represented both the defendant and the Memorial Realty Corporation, of which the defendant was president, treasurer and principal stockholder.

As the result of a talk with the defendant about two weeks before the sale, Figoni had a conversation with Davis, the president and treasurer of the plaintiff corporation, concerning the proposed foreclosure of the mortgage. In the course of the conversation Figoni inquired whether or not they "could get together," stating in substance that he, Figoni, "understood" the terms of the sale were to be $1,000 in cash and that a mortgage would be taken back on the same terms as the original mortgage. Davis told him that this was "satisfactory." Figoni told Davis he was making the inquiries and arrangements on behalf of the defendant, and that "we had a corporation, and that we were going to bid; the corporation was going to bid"; that "definitely" it was the corporation, the Memorial Realty Corporation, that was being discussed, and not the defendant, Tebaldi. No agreement was made at this conversation in regard to the terms to be announced at the sale. Figoni's "best recollection" was that he saw the published notice before he talked with Davis.

On the day set for the sale, August 22, 1935, Murray, the attorney acting for the plaintiff, postponed the sale for one day because Davis was not present and was not available. The evidence was conflicting concerning whether any terms of sale were announced on August 22. The auctioneer testified that he stated the same terms as were stated the next day. Figoni testified that no terms were announced on August 22. On August 23 there were present only those who had been present the previous day -- Figoni, the defendant, the auctioneer, Murray, and two real estate brokers. The terms announced were "$1000 down and the balance in cash in ten days." Figoni then told Murray the terms were not as he understood they were to be; that he understood there was to be a deposit and a new mortgage; that "we are not prepared at this moment to pay . . . the balance in cash in ten days. If we had known . . . we would have made different arrangements." Murray replied that he knew nothing of plans for a new mortgage and that the terms announced were those that he had been instructed to have announced. Asked whether the sale would proceed despite Figoni's understanding, Murray said the sale would go on. However, he did tell Figoni that any agreement he had made with Davis would be carried out if he purchased the property. Neither Figoni nor the defendant requested an adjournment.

After the bidding started, as a result of a conversation with the defendant, Figoni bid up to $12,800 for the corporation. The property was sold to the plaintiff for $13,000. The fair market value of the property was $18,000. After the bid of $13,000, Murray asked Figoni whether he was going to bid higher. The latter stated: "we are not prepared at this moment to bid any higher than that." The defendant testified that $13,000 in cash was all he could obtain in ten days.

If the defendant had known that a payment of cash within ten...