Bielanski v. Westfield Sav. Bank

• Decision Date: 26 April 1943
• Citation: 48 N.E.2d 627,313 Mass. 577
• Parties: BIELANSKI v. WESTFIELD SAV. BANK (two cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

313 Mass. 577

48 N.E.2d 627

BIELANSKI

v.WESTFIELD SAV. BANK (two cases).

Supreme Judicial Court of Massachusetts, Hampden.

April 26, 1943.

Bill of Exceptions from Superior Court, Hampden County; Brown, Judge.

Actions in contract and in tort by Stanley Bielanski against Westfield Savings Bank for alleged wrongful foreclosure of a mortgage given to the defendant by the plaintiff. The trial judge refused to direct verdicts for defendant in the two actions, and the defendant brings exceptions.

Defendant's exceptions sustained and judgment in each case entered for defendant.

Before FIELD, C. J., and QUA, DOLAN, COX, and RONAN, JJ.

D. M. Macaulay, of Springfield, for plaintiff.

T. H. Kirkland, of Springfield, and H. B. Putnam, of Westfield, for defendant.

RONAN, Justice.

The defendant has saved exceptions to the refusal of the judge to direct verdicts for it in two actions, one in contract and the other in tort, for the alleged wrongful foreclosure of a mortgage given to the defendant by the plaintiff.

The plaintiff, on February 1, 1936, purchased from the defendant certain premises consisting of a building containing twenty-six apartments, four stores, and a brick barn used for a garage, for $35,000, which he paid for by a note for this amount, payable on demand and secured by a mortgage. As a part of the transaction the parties executed an agreement, hereinafter referred to as the first rent agreement, with reference to the payment of a part of the rents collected by the plaintiff. This agreement, after reciting that its consideration was the delivery of the deed to the plaintiff and the acceptance by the defendant of his note secured by a mortgage, required the plaintiff to pay $300 each month ‘from the revenue of said property’; certain portions of these monthly payments were to be allocated, in certain amounts representing one-twelfth of the annual interest on the mortgage and taxes and a fixed amount for water and insurance, to the payment of these carrying charges of the property and the balance, if any, at the end of the year was to be applied to the principal of the note. The plaintiff was to permit the defendant to inspect his books of account dealing with the property. He was not to make any major repairs without the prior written approval of the defendant. The defendant agreed to credit and apply the monthly payments in the manner stated. This rent agreement also contained the following provision: ‘Nothing in this agreement shall be construed to interfer [sic] in any way with the provisions and powers contained in the first mortgage given by’ the plaintiff to the defendant. This agreement continued in force until June 15, 1937, when it was superseded by a second rent agreement similar in all respects to the previous agreement except that it called for monthly payments of $320.

The rents were attached on June 26, 1937, in a trustee process brought against the plaintiff and his wife. The plaintiff consulted counsel who testified that, in accordance with the plaintiff's directions, a request was made upon the defendant to take possession of the property under the mortgage. The defendant made an entry on June 28, 1937, and appointed a real estate firm to collect the rents. The plaintiff denied that he knew that the defendant had made an entry, although he testified that on July 2, 1937, he read the written notice given to him by the real estate firm to be delivered to the tenants and which read: ‘TO ALL TENANTS IN THE PROPERTY AT 84 and 86 MAPLE STREET-161-163-165-167-Lyman Street IN POSSESSION OF THE WESTFIELD SAVINGS BANK. You are hereby notified that all rents due and payable are to be paid to Mr. Stanley Bielanski.’ This notice was signed by this real estate firm as agents for the defendant. Thereafter the plaintiff collected the rents until July 15, 1937, and turned them over to the real estate firm. He had made all previous payments of rent to this same firm as a matter of convenience to him and they transferred these amounts to the defendant. There was evidence that the defendant, on July 1, 1937, mailed a demand for the payment of the note on or before July 10, 1937. The plaintiff denied that he received such notice. The defendant began foreclosure proceedings on July 15, 1937, by publishing notice of the foreclosure sale, which was held on August 9, 1937. The defendant bid in the property for $34,582, which was approximately the amount due on the mortgage. The defendant then sold the property for $34,500 to a corporation which was formed by the members of the real estate firm. The plaintiff left Holyoke on July 15, 1937, for a few days' trip to New York. On his way back to Holyoke, he was injured in an automobile accident and was confined for more than three weeks in a hospital in Connecticut. He knew nothing about the foreclosure until the defendant had disposed of the property.

The plaintiff contends that he performed and observed all that he was required to do under the second rent agreement; that by virtue of this agreement there was no breach of the mortgage; and that he was entitled to recover both in contract and in tort for damages resulting from this alleged unauthorized foreclosure of the mortgage.

The note, mortgage and the first rent agreement were all executed at the same time as parts of the same transaction and were the method adopted by the parties by which the plaintiff was to pay for the conveyance of the property. The intent of the parties is to be ascertained by construing together these three instruments as comprising a single plan by which the defendant was to be paid. Bryne v. Dorey, 221 Mass. 399, 109 N.E. 146;Skilton v. R. H. Long Cadillac LaSalle Co., 265 Mass. 595, 164 N.E. 652;Charlestown Five Cents Savings Bank v. Zeff, 275 Mass. 408, 176 N.E. 191;Baker v. James, 280 Mass. 43, 181 N.E. 861;Mansfield v. Lang, 293 Mass. 386, 200 N.E. 110;Lamson & Co., Inc., v. Abrams, 305 Mass. 238, 25 N.E.2d 374.

An indebtedness evidenced by a demand note becomes due as soon as the note is delivered. An action for its collection may be maintained without any previous demand. Farmers National Bank of Annapolis v. Venner, 192 Mass. 531, 78 N.E. 540,7 Ann.Cas. 690;Goodfellow v. Farnham, 239 Mass. 590, 132 N.E. 363;Forestiere v. Springfield Institution for Savings, 303 Mass. 101, 20 N.E.2d 950. The mortgage given by the plaintiff does not appear in the record, but the statement in the bill of exceptions that the mortgage was ‘a statutory-form mortgage upon the statutory condition’ we interpret to mean that the mortgage was in the form set forth in G.L. (Ter.Ed.) c. 183, § 55(5). A mortgage in that form would have the force and effect attributed to it by virtue of G.L.(Ter.Ed.) c. 183, §§ 19-21. The mortgage must therefore be assumed to state that it was given as security for the payment of the demand note. The note was due without a demand, and we do not think that a demand for payment was a condition precedent to the exercise of the power of sale contained in the mortgage. In Alden v. Lincoln, 13 Metc. 204, an action of trover by the mortgagee against an officer who had attached and sold the goods that were mortgaged as security for the payment of a demand note, it was contended that as the plaintiff had not made any demand upon the mortgagor the former had no right of possession. In...