Dugan v. Manchester Fed. Sav. & Loan Ass'n

• Decision Date: 06 January 1942
• Docket Number: No. 3267.,3267.
• Citation: 23 A.2d 873
• Parties: DUGAN v. MANCHESTER FEDERAL SAVINGS & LOAN ASS'N et al.
• Court: New Hampshire Supreme Court

23 A.2d 873

DUGAN

v. MANCHESTER FEDERAL SAVINGS & LOAN ASS'N et al.

No. 3267.

Supreme Court of New Hampshire. Hillsborough.

Jan. 6, 1942.

[Copyrighted material omitted.]

Transferred from Superior Court, Hillsborough.County; Lorimer, Judge.

Suit in equity by one Dugan against Manchester Federal Savings & Loan Association and others for rescission of a mortgage foreclosure and cancellation of a mortgage foreclosure deed.The trial court, after making certain findings, transferred, without ruling, the question whether, under the circumstances, petitioner was entitled to relief.

Case discharged.

Petition in equity for rescission of mortgage foreclosure and cancellation of mortgage foreclosure deed.Trial by the Court.Lorimer, J, found the facts.The important ones are the following: January 15, 1938, petitioner mortgaged his property to the defendant association (hereinafter referred to as the Bank), in the sum of $3,600.This was a second renewal of prior loans.The condition of the loan provided for $36 monthly payments, to be applied on the principal and interest.A further provision was that taxes should be paid by the borrower, and if not paid within thirty days after due date, then the whole principal, interest, and taxes would become due, without notice or demand.Petitioner paid $50 per month for a while, and then $36.Default occurred in two monthly payments, and also in payment of taxes for 1938 and 1939, which the Bank paid.In August, 1939, petitioner and his partner, one Creeden, who did business as Creeden Tobacco Company, were petitioned in bankruptcy.They were discharged April 3, 1940.The Bank had proved its claim as a secured claim, and in May, 1940, not knowing of the discharge, petitioned the Bankruptcy Court for leave to foreclose its mortgage.May 8, 1940, the petition was granted; May 14, 1940, the Bank started its foreclosure proceedings by publishing notice thereof in the Manchester Union, May 16, 23, and 30.Copy of the publication was sent to petitionerMay 16 by registered mail at what was his actual home and address.This was returned "unclaimed".A second like notice sent in the same manner was mailed May 20 and likewise returned.The sale took place as advertised June 8.Present at the sale, besides the auctioneer, were a representative of the Bank and the defendant purchasers, Mr. and Mrs. Sofronas.All three were bidders, and the property was finally sold to Mrs. Sofronas for $3,850, subject to taxes (probably $240 as in two previous years), and at least $300 had to be expended in repairs.The property was carried on the books of the Bank at a valuation of $5,100, assessed for $6,000, and valued by a real estate man in its then condition at $6,500.The Bank's claim at the time of the sale was $3,410.74.The Bank deeded the property to Pota A. Sofronas June 10, 1940; she paid part of the purchase price and financed the balance with the defendant Bank.Petitioner did not know of the foreclosure proceedings, nor of the sale thereunder until June 19, when he received a notice by mail to the effect his rent was due to Mrs. Sofronas since June 8.He had not seen the foreclosure notice published in the Union, nor did he have any such notice from any other source.He thereupon consulted counsel, who instituted these proceedings.The petitioner now claims that through mistake and misfortune he was prevented from avoiding the foreclosure sale; that had he been apprised of the Bank's action he could have saved his property by financing a loan elsewhere; that the Bank did not act in good faith; that he was misled in believing the Bank still carried the loan as not in default, in that it accepted the regular monthly payment of $36 May 31, 1940; that consequently this constituted a waiver of a claim of default, and that the Bank was therefore estopped from going through with the sale.The petitioner further claims that the price paid at the sale was inadequate, that the sale was unconscionable, that it amounted to a fraud on the petitioner, and that consequently the sale should be set aside.Other pertinent facts appear in the opinion.The Court, after making certain other findings, transferred, without ruling, the question as to whether, under the circumstances, petitioner is entitled to relief.

Sheehan & Phinney, of Manchester (John J. Sheehan, of Manchester, orally), for petitioner.

David V. Prugh and Wyman, Starr, Booth, Wadleigh & Langdell, all of Manchester (Robt. P. Booth, of Manchester, orally), for the Association.

John J. Broderick and McLane, Davis & Carleton, all of Manchester (George E. Nelson, of Manchester, orally), for Sofronas.

BURQUE, Justice.

The Bank had a right to foreclose.Two defaulted payments of taxes in addition to two defaulted monthly payments gave the Bank that right.The foreclosure proceedings were regular; the publication complied with the provision in the mortgage, and forwarding of copy thereof complied with the statute.P.L.Ch. 215, § 23.The statute does not provide that proof of receipt of notice sent by registered mail is a prerequisite to a right of foreclosure.If petitioner is entitled to relief, it must...