Attorney General v. Dime Sav. Bank of New York, FSB

• Decision Date: 27 July 1992
• Citation: 596 N.E.2d 1013,413 Mass. 284
• Parties: ATTORNEY GENERAL v. The DIME SAVINGS BANK OF NEW YORK, FSB, & others. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1013

596 N.E.2d 1013

413 Mass. 284

ATTORNEY GENERAL v. The DIME SAVINGS BANK OF NEW YORK, FSB, & others.

¹

Supreme Judicial Court of Massachusetts,

Suffolk.

Argued May 7, 1992.

Decided July 27, 1992.

Stuart T. Rossman, Asst. Atty. Gen., for the Atty. Gen.

R.K. Gad, III, Boston (Colin J. Zick with him), for defendants.

Joel Feldman, Worcester, Margaret F. Turner and Kathleen E. McGrath, Boston, for City Life/Vida Urbana and another, amici curiae, submitted a brief.

Before LIACOS, C.J., and WILKINS, ABRAMS, LYNCH and GREANEY, JJ.

ABRAMS, Justice.

The Attorney General brought this action for declaratory and injunctive relief against The Dime Savings Bank of New York, FSB (Dime). ² The dispute arises out of mortgage loans made by Dime in Massachusetts which have resulted in foreclosure. After foreclosing, Dime has brought actions in trespass against foreclosed mortgagors and tenants holding over after notice to quit and has sought and obtained injunctions to eject holdover mortgagors and tenants from the mortgaged properties. The Attorney General seeks a declaration that Dime's practice violates G.L. c. 184, § 18 (1990 ed.). The complaint also asks that we enjoin Dime from pursuing such a course in the future. ³ For the reasons stated, we hold that the procedure employed by Dime in these cases violates G.L. c. 184, § 18. We therefore remand the matter to the county court for entry of a declaration that a mortgagee who forecloses on real property by sale may not bring a trespass action against a holdover tenant or mortgagor in actual possession of the foreclosed premises. ⁴

1. Background. On April 7, 1992, the Attorney General began this action by filing a complaint in the Supreme Judicial Court for Suffolk County. The complaint invokes the court's equitable and supervisory powers under G.L. c. 214, § 1 (1990 ed.), and G.L. c. 211, § 3 (1990 ed.), respectively, as well as G.L. c. 231A (1990 ed.) (declaratory judgment). The case came before a single justice of the county court on a statement of agreed facts. The stipulations of fact concern a number of individual foreclosures and resulting dispossessions. After oral argument, the single justice reserved and reported the matter to this court.

The following is a summary of the statement of agreed facts. In each of the cases on which this controversy is founded, Dime held a mortgage of real property as security for an obligation. In each instance, the mortgagor defaulted on the obligation. After default, Dime recorded memoranda of entry, conducted foreclosure sales, and acquired perfected title to the properties by purchasing them at the foreclosure sales. Dime has neither sought nor accepted payments of rent from the occupants, and the Commonwealth stipulates that Dime has done nothing to create new, postforeclosure tenancies between itself and the occupants.

In each of the cases in question, the property was occupied at the time of foreclosure either by the mortgagor or a tenant of the mortgagor. ⁵ All such occupants initially entered the respective properties lawfully. In each of the cases in which the holdover occupants were tenants of the mortgagor, the creation of the tenancy postdated the grant of the mortgage.

After Dime foreclosed its mortgages, it sent notices to the occupants demanding immediate possession of the properties. In each case, the occupants refused to relinquish possession on receiving notice to do so. Dime responded by bringing actions for trespass against the occupants in Superior Court. ⁶ In each of these actions, Dime sought preliminary and permanent injunctions ordering the occupants to vacate the mortgaged premises. In some cases, the prayer for preliminary relief was heard on a "short order[ ] of notice." In no case, however, have fewer than thirty days passed between the issuance of the demand and the commencement of legal proceedings.

2. The Attorney General's power under G.L. c. 12, § 10, to bring this action. We first address Dime's contention that the Attorney General acted beyond his statutory authority in commencing this action. Dime correctly notes that the Attorney General argues in his complaint that the summary process provisions of G.L. c. 239 (1990 ed.), constitute the exclusive remedy for a mortgagee who has foreclosed on mortgaged property by power of sale and who seeks to gain possession of the property. Dime concedes that this claim amounts to an assertion that the Superior Court lacks subject matter jurisdiction to hear Dime's trespass claims. Dime further concedes that such a claim falls within the Attorney General's power, under G.L. c. 12, § 10 (1990 ed.), to "take cognizance of all violations of law or of orders of courts, tribunals or commissions affecting the general welfare of the people." See Commonwealth v. Mass. CRINC, 392 Mass. 79, 88, 466 N.E.2d 792 (1984) (Attorney General has "broad common law and statutory powers to represent the public interest"). This concession is fatal to Dime's claim.

Dime maintains that the Attorney General has conceded that it has avenues other than summary process available for recovering possession of mortgaged property. Dime contends that this concession subverts the Attorney General's contention that the Superior Court lacks subject matter jurisdiction to hear Dime's claims. The Attorney General, however, has made no such concession. The Attorney General continues to argue that, after foreclosure by sale, a foreclosing mortgagee must employ summary process to dispossess holdover tenants or mortgagors. According to the Attorney General, the commencement of trespass actions to eject holdover tenants and mortgagors violates G.L. c. 184, § 18. See infra. Under G.L. c. 12, § 10, the Attorney General is authorized to take note of such statutory violations. See Commonwealth v. Mass. CRINC, supra.

3. G.L. c. 184, § 18. General Laws c. 184, § 18, provides, in pertinent part, that "[n]o person shall attempt to recover possession of land or tenements in any manner other than through an action brought pursuant to [G.L. c. 239] or such other proceedings authorized by law." Dime argues that a mortgagee's use of a trespass action to recover possession of mortgaged premises is "authorized by law." G.L. c. 184, § 18. Dime further maintains that a court's common law power to enjoin a continuing trespass justifies an injunction ordering holdover mortgagors or their tenants to vacate the premises. Because an action for trespass will not lie in the cases as stated, however, we conclude that the "other proceedings authorized by law" include neither a common law action for trespass nor an injunction based thereon. ⁷

It is well settled that "[a]n action of trespass, being a possessory action, cannot be maintained, unless the plaintiff had the actual or constructive possession of the property trespassed upon at the time of the trespass." Emerson v. Thompson, 2 Pick. 473, 484 (1824). See New England Box Co. v. C & R Constr. Co., 313 Mass. 696, 707, 49 N.E.2d 121 (1943); Milton v. Puffer, 207 Mass. 416, 418, 93 N.E. 634 (1911); Hersey v. Chapin, 162 Mass. 176, 179, 38 N.E. 442 (1894); Abbott v. Abbott, 97 Mass. 136, 140 (1867). Neither party contends that Dime has actual possession of the properties in question. Indeed, the disputed issue in this case is the means by which Dime may gain such possession.

We have not addressed the question whether an owner out of possession has constructive possession sufficient to maintain an action of trespass where actual possession is in another. ⁸ Courts that have considered the question, however, have concluded that, for the purposes of a trespass action, there can be no constructive possession by an owner of property actually possessed by another. See Frost v. Johnson, 256 Ala. 383, 54 So.2d 897 (1951); More v. Urbano, 151 Conn. 381, 198 A.2d 211 (1964); McCausland v. York, 133 Me. 115, 174 A. 383 (1934); Jaycox v. E.M. Harris Bldg. Co., 754 S.W.2d 931 (Mo.Ct.App.1988); Green v. Pettingill, 47 N.H. 375 (1867); Daniels v. Coleman, 253 S.C. 218, 169 S.E.2d 593 (1969). The "fiction of 'constructive possession' has no application when another is in actual possession." W. Prosser & W. Keeton, Torts § 13, at 77 n. 99 (5th ed. 1984). ⁹

Dime argues that the label attached to its action is irrelevant. Dime suggests that it might have brought an action for writ of entry under G.L. c. 237, or a common law action in ejectment. The short answer to this argument is that Dime did not bring such actions. The propriety of such other actions therefore is not before us.

Moreover, Dime's argument is self-contradictory. Although it maintains that the trespass label is insignificant, Dime also contends that a court's traditional power to enjoin a continuing trespass justifies the injunctions it has obtained. However, each case cited by Dime for the proposition that a court will enjoin a continuing trespass involves an owner or owners of real property in actual or constructive possession. See, e.g., Fenton v. Quaboag Country Club, Inc., 353 Mass. 534, 233 N.E.2d 216 (1968) (homeowners suffered injuries to person and property from golf balls which were hit from adjacent course); Anntco Corp. v. Shrewsbury Bank & Trust Co., 353 Mass. 250, 230 N.E.2d 795 (1967) (store owner and commercial landlord aggrieved by overburdening of easement for drainage); Chesarone v. Pinewood Builders, Inc., 345 Mass. 236, 186 N.E.2d 712 (1962) (owner of unoccupied land complained of flooding caused by drainage system constructed on neighboring land); Doody v. Spurr, 315 Mass. 129, 51 N.E.2d 981 (1943) (homeowner sought decree enjoining defendant from parking automobile on and driving over homeowner's property); Suburban Land Co. v. Billerica, 314 Mass. 184, 49 N.E.2d 1012 (1943) (land owner and water company complain of town's construction of water pipes across plaintiffs' property without taking by eminent domain); Ferrone v. Rossi, 311 Mass. 591, 42 N.E.2d 564 (1942) (...