Fudim v. Kane

• Decision Date: 28 February 1927
• Docket Number: No. 6308.,6308.
• Citation: Fudim v. Kane, 136 A. 306 (R.I. 1927)
• Parties: FUDIM v. KANE et al.
• Court: Rhode Island Supreme Court

136 A. 306

FUDIM

v. KANE et al.

No. 6308.

Supreme Court of Rhode Island.

Feb. 28, 1927.

Exceptions from Superior Court, Providence and Bristol Counties; Willard B. Tanner, Presiding Justice.

Action of assumpsit by Samuel Fudim against Benjamin Kane and others, in which the defendants were defaulted for nonappearance. The court refused to remove the default, and assessed damages after taking testimony, and defendants except. Exceptions overruled, and case remitted, with directions.

See, also, 133 A. 351.

Wilson, Churchill & Curtis, of Providence, for plaintiff.

Robinson & Robinson and McGovern & Slattery, all of Providence, for defendants.

BARROWS, J. This was an action of assumpsit by a mortgagor to recover a surplus alleged to be in the hands of the assignees of the mortgagee after a foreclosure sale.

Two mortgages existed on plaintiff's property, the first for $6,000 and the second for $12,000. The latter was held by defendants. Interest being in default thereon, acting under the power of sale in the mortgage they advertised a sale of the property. The sale as advertised was actually made with notice that it was subject to the first mortgage. At the sale were numerous bidders, one of whom bid $14,500. Among those present was the holder of the first mortgage, who asserted that his interest was in default and said his mortgage would have to be paid. No representations were made by any one in authority that the sale was to be free from all incumbrances, nor had defendants authority so to sell. The utmost that the facts can be said to show is that defendants supposed the purchaser could deduct the amount of the first mortgage from his bid.

To one of the holders of the mortgage, Kane, as was permitted by the express terms of the power of sale, the property was knocked down for $15,000, and he received from all five defendants a mortgagees' deed reciting the sale to have been subject to the first mortgage and acknowledging the receipt of said bid. No steps have been taken to attack the mortgage sale for mistake.

When the case was reached for trial in the superior court, defendants were defaulted for nonappearance. False statements in connection with Kane's alleged illness were admittedly made, but there is no evidence that defendants' counsel had knowledge of them.

Subsequently the superior court refused to remove the default and assessed damages after taking testimony. The case is here on exception (1) to the action of the superior court refusing to remove the default and (2) to the amount of damages assessed.

(1) Removal of default was within the judicial discretion of the superior court. Its action is reversible only for abuse of discretion. We agree with it that the circumstances of defendants' absence from the trial were such as to indicate that the one defendant, Kane, who acted as spokesman for the other four, had no intention of being present at the trial. This view was fortified by his subsequent unexplained failure to appear at the hearings on removal of default and assessment of damages when his presence was desirable and continuances for the purpose of securing the same were granted at his own counsel's request. There was no abuse of discretion in the superior court's refusal to remove the default.

(2) The same question which defendants desired to raise by way of defense, if the default had been removed, is brought up on their exceptions to the amount of damages assessed. The claim is that plaintiff, after default, is entitled to nominal damages only because the purchaser retained from the $15,000 acknowledged purchase price $6,000 with which to pay the first mortgage. The alleged result was that the foreclosure sale left the mortgagees with a loss of $3,000 rather than with a surplus. They assert that, unless the $15,000 actually came into their hands, plaintiff, though perhaps entitled to relief in some other form of action, is not entitled to recover for money had and received.

The default admits liability only. The amount of damages is subject to proof. Hicks v. Wilbur, 38 R. I. 268, at page 274, 94 A. 872. A surplus on foreclosure sale is held to the use of the owner of the equity of redemption. Jones on Mortgages (7th Ed.) § 1698; Gilson v. Nesson, 208 Mass. 368, 94 N. E. 471. It cannot be used without such owner's consent to discharge a prior mortgage. Bobbitt v. Blackwell, 120 N. C. 253, 26 S. E. 817. It may be recovered in an action of assumpsit. Reynolds v. Hennessy, 15 R. I. 215, 2 A. 701; Schiavino v. Salzillo, 45 R. I. 203, 121 A. 423. The right to a surplus accrues "forthwith or very shortly after the sale, without any previous demand" and the recitals in the mortgagees' deed are prima facie proof of the amount received at foreclosure sale. Reynolds v. Hennessy, supra, at page 219, 2 A. 703. These recitals are not conclusive (Jones on Mortgages, 1698; Hedley v. Briggs, 2 R. I. 489), nor is defendant's affidavit in connection with them conclusive (Gilson v. Nesson, supr...