Flynn v. Curtis & Pope Lumber Co.

• Decision Date: 30 March 1926
• Citation: 255 Mass. 352,151 N.E. 379
• Parties: FLYNN v. CURTIS & POPE LUMBER CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

255 Mass. 352

151 N.E. 379

FLYNN

v.CURTIS & POPE LUMBER CO. et al.

Supreme Judicial Court of Massachusetts, Norfolk.

March 30, 1926.

Appeal from Superior Court, Norfolk County; McLaughlin, Judge.

Suit by Christine A. Flynn against the Curtis & Pope Lumber Company and others. From a decree for plaintiff, defendant named appeals. Affirmed.

See, also, 139 N. E. 533, 245 Mass. 291.

G. R. Farnum, of Boston, for appellant.

J. B. Jacobs, of Boston, for appellee.

BRALEY, J.

The material facts concerning the relation of the parties to the transactions, as alleged in the bill as amended, having been stated in Flynn v. Curtis & Pope Lumber Co. et al., 139 N. E. 533, 245 Mass. 291, when this case was first before us upon report, it is unnecessary to restate them, and the following decree, from which no appeal was taken, was entered after rescript:

‘This cause came on to be heard at this sitting of the court upon the substitute bill of complaint and the answers thereto, and the report of the master and the exceptions to the same, and upon the rescript of the Supreme Judicial Court, and thereupon after hearing of the parties, and upon consideration thereof, it is hereby ordered, adjudged and decreed:

‘1. That the plaintiff's exceptions to the master's report be and hereby are overruled.

‘i. That the master's report be and hereby is confirmed.

‘3. That the defendant Myer Rittenberg is a bona fide purchaser for value, without notice.

‘4. That the bill of complaint be dismissed, as against the defendant Myer Rittenberg and the defendant Morris Finkelstein.

‘5. That the defendant Curtis & Pope Lumber Company on October 15, 1919, held the property in question as equitable mortgagee of the plaintiff, to secure any indebtedness due to it from the plaintiff and Martin Flynn, her husband, including moneys expended in the completion of the garage and dwelling house.

‘6. That the plaintiff is entitled to an accounting from the Curtis & Pope Lumber Company for the difference between the fair value of the equity of redemption conveyed to the defendant Rittenberg on October 16, 1919, and the amount secured by said equitable mortgage, after making all proper charges and credits.

‘7. That the case be recommitted to the master to take the account from the Curtis & Pope Lumber Company of the equity of redemption conveyed to the defendant Rittenberg on October 16, 1919, and the amount secured by said equitable mortgage after making all proper charges and credits.’

The case was recommitted accordingly and upon the coming in of the master's report, to which the defendant took twelve exceptions, a final decree was entered April 21, 1925, overruling the exceptions, confirming the report, and ordering the defendant to pay the plaintiff $18,578.43 which consisted of $13,972.22, the difference between the fair value of the equity of redemption, and the amount secured by the mortgage after making all proper charges and credits and $4,606.21 interest at the rate of six per centum per annum from October 16, 1919, up to and including April 13, 1925, from which the defendant appealed.

Defendant held in the name of its nominee a second mortgage on the property which it caused to be foreclosed under circumstances which made it an equitable mortgagee. Flynn v. Curtis & Pope Lumber Company, supra. And when it became such mortgagee there was outstanding a construction mortgage for $30,000, which the company desired to replace by a permanent mortgage for a like amount. The defendant employed a broker to whom it paid a commission to negotiate a loan and through his efforts an agreement was made with the Boston Mutual Life Insurance Company whereby the defendant agreed to accept $25,000 in cash and $3,000 ‘in the form of equities in the three properties on Warwick Road, Newton, which had come into the hands of the Boston Mutual Life Insurance Company as the result of foreclosure proceedings or otherwise,’ and also permitting the insurance company to retain $2,000 as security for the completion of buildings which was to be paid to the defendant. A mortgage was placed on the property in accordance with these terms, and the defendant completed the work and received the amount. It sold the property on Warwick Road for $1,352.72, entailing a loss of $1,649.28, with which the master charged the defendant.

It is contended under the first and second exceptions that it should have been credited with, or allowed to set off the difference between, $3,000, the amount advanced in lieu of cash, and the amount received for the sale. The master finds:

‘That the defendant did not consult the plaintiff or her husband as to the condition attached to the placing of the permanent mortgage, nor did the defendant consult the plaintiff or her husband as to the employing of Brown (the broker).’

The defendant, however, held the property subject to the construction mortgage given by the plaintiff to the Beacon Investment Association. If for its own convenience of management or of financing the indebtedness it took without the plaintiff's knowledge or assent other property instead of cash when discharging the construction mortgage by means of the permanent mortgage, it should be chargeable in the account with the resulting loss. The plaintiff was under no obligation to pay for the defendant's misjudgment of the value of this part of the consideration of the permanent mortgage.

The third and fourth exceptions are to the disallowance of interest on all items representing the money paid or advanced by it from the dates of the respective payments, to October 16, 1918, the date of the sale of the property by the defendant. And to the disallowance of its claim for interest on sums paid or advanced as set forth in the report between March 28, 1918, the date of the foreclosure sale under the defendant's mortgage, and October 16, 1919, the date of the sale of the property by the defendant to Rittenberg. The foreclosure sale was March 19, 1918, and the defendant during the period referred to in the exceptions denied any relation of trust and confidence whatever with the plaintiff, refused to recognize her equitable rights, and claimed to be the sole owner. It must be presumed that the defendant knew the law, and having acted to the disadvantage of the plaintiff, compensation should not be awarded under the guise of interest. Morse v. Hill, 136 Mass. 60;Hayes v. Hall, 74 N. E. 935, 188 Mass. 510;Rolikatis v. Lovett, 100 N. E. 748, 213 Mass. 545; Flynn v. Curtis & Pope Lumber...