Charlestown Five Cents Sav. Bnak v. Zeff

• Decision Date: 26 May 1931
• Parties: CHARLESTOWN FIVE CENTS SAV. BANK v. ZEFF.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

275 Mass. 408

176 N.E. 191

CHARLESTOWN FIVE CENTS SAV. BANK

v.ZEFF.

Supreme Judicial Court of Massachusetts, Suffolk.

May 26, 1931.

Appeal from Municipal Court of Boston, Appellate Division; E. Adlow, Judge.

Action by the Charlestown Five Cents Savings Bank against Barnett Zeff and others. The trial judge found for defendants, and the case was reported to the Appellate Division. From an order dismissing the report, plaintiff appeals.

Reversed and rendered.Stover, Sweetser & Lombard and Willis W. Stover, all of Boston, and John R. Salmon, of Cambridge, for appellant.

S. B. Stein, of Boston, for appellee.

CROSBY, J.

The plaintiff seeks to recover from the defendants, as guarantors, the balance of the principal and interest remaining unpaid on a mortgage note after crediting thereon the net proceeds received by the plaintiff from a foreclosure sale of the premises described in the mortgage. The writ is dated July 15, 1930. The defendants Weiner and Rottenberg were defaulted. The remaining defendant, Zeff, in his answer pleaded several defences, all of which were waived at the trial except the one that the action was prematurely brought. The case was heard and determined solely on that issue. The trial judge refused to grant certain requests of the plaintiff and found for the defendants. He ruled that as to them under the contract of guaranty the note would not be due and payable until May 29, 1932. The case was reported to the Appellate Division which ordered that the report be dismissed. From this order the plaintiff appealed. The report contains all the material evidence.

The note was secured by a mortgage of real estate signed and delivered simultaneously therewith. The mortgage recites that it is given ‘to secure payment of sixth thousand dollars in three years with interest at the rate of six per centum per annum, payable quarter yearly, as provided in a certain note of even date, and also to secure the performance of all agreements herein contained. * * * It is also agreed * * * that in case any default in the condition of this mortgage shall exist for more than thirty days the entire mortgage debt shall become due at the option of the holder hereof.’ The note does not contain the above recitals, but across the end of it appears the following: ‘Secured by Mortgage of Real Estate at No. 236-50 Dorchester St., 225 East Eighth St., in the city or town of South Boston to be recorded in Suffolk Registry of Deeds.’ The mortgage was signed. ‘The South Boston Construction Co. by Benny Weiner, Treasurer, by Barnett Zeff, President,’ and was dated, acknowledged and recorded May 29, 1929, that being the date of the note, and also the date of the guaranty which is written under the note as follows: ‘For Value Received, We jointly and severally guarantee and promise to pay the above note and interest, according to the tenor thereof, waiving demand and notice. No extension or indulgence or partial release shall prevent my remaining fully liable. Benny Weiner Barnett Zeff Nathan Rottenberg Witness, M. E. S. Clemons to all three.’ The quarterly interest on the note due February 28, 1930, was not paid when due, and as it remained unpaid on April 1, the plaintiff entered and took possession of the premises; on April 29, the default still continued and the plaintiff sold the premises at public auction under the power of sale in the mortgage. Pursuant to the terms of the acceleration clause in the mortgage the plaintiff exercised its option as to the entire mortgage debt becoming due in the event of any default, and foreclosed the same for non-payment of the principal debt as well as for the overdue interest. The net proceeds of the foreclosure sale amounted to $38,648.21, and this sum was credited on the note. On July 15, 1930, this action was brought against the defendants as guarantors to recover $21,351.79-the unpaid balance of the note with interest from the date of the sale to the date of the writ. The single issue to be determined is whether, as the note is dated May 29, 1929, payable ‘in three years,’ and the writ is dated July 15, 1930, the action was prematurely brought.

The guaranty is to be construed strictly, and the defendants are entitled to rely upon its terms. Davis v. Wells, 254 Mass. 118, 125, 149 N. E. 693....