Gerber v. Berstein

• Decision Date: 03 July 1936
• Parties: GERBER et al. v. BERSTEIN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

295 Mass. 132

3 N.E.2d 223

GERBER et al. v. BERSTEIN.

Supreme Judicial Court of Massachusetts, Essex.

July 3, 1936

Exceptions from Superior Court, Essex County; Dillon, Judge.

Action of contract by Morris Gerber and another against Lena Berstein. Verdict for $3,708.25 was directed in favor of plaintiffs, and defendant brings exception.

Exception sustained.

S. Kaufman, of Lynn, for plaintiffs.

A Kobrin and L. Kobrin, both of Lynn, for defendant.

FIELD Justice.

This is an action of contract on an alleged agreement of the defendant to assume and pay certain mortgages on real estate in Lynn. The writ is dated October 29, 1932. The answer is a general denial and payment. Morris Gerber and the Gerber Realty Trust ‘ by its trustee, Morris Gerber’ were originally named as parties plaintiff but the ‘ action of the co-plaintiff, ‘ Gerber Realty Trust" was ‘ waived’ in open court leaving Morris Gerber the sole plaintiff. He is referred to herein as the plaintiff. The judge denied the motion of the defendant for a directed verdict and on motion of the plaintiff directed a verdict for him in the amount of $3,708.25. The defendant excepted.

These facts appear to have been undisputed. On May 10, 1929, the plaintiff conveyed the premises by a quitclaim deed to one Kavanagh who, on the same day, by a quitclaim deed, conveyed them to ‘ Morris Gerber as he is trustee of the Gerber Realty Trust.’ Neither deed contained any provision that the grantee assume and pay existing mortgages. A deed, dated July 15, 1929, in the usual short statutory form with warranty covenants (see G.L.[Ter.Ed.] c. 183, § 16), signed by the plaintiff and his wife, who released dower and other interests, wherein the grantors were described as ‘ Morris Gerber individually, and as Trustee of the Gerber Realty Trust, under a declaration of trust dated May 10th, 1929, recorded with the Essex South District Registry of Deeds, Book 2805, Page 535 and recorded anew herewith,’ conveyed the premises to the defendant who agreed to assume and pay certain existing mortgages. There were three such mortgages. The premises were then subject to a first, a second and a third mortgage, each given to secure a promissory note of the plaintiff. On November 16, 1932, the premises were sold on the foreclosure sale of the first mortgage for the principal amount of such mortgage.

The plaintiff testified that at the time of the conveyance of the real estate to the defendant he as an individual had no title to the premises in question, that he had not paid the notes secured by the mortgages, and that before the date of the writ he assigned by a written instrument all his rights against the defendant which accrued to him by virtue of these notes to the third mortgagees. Witnesses called by the plaintiff testified that there was due on the second mortgage note the sum of $1,000, with interest from July 5, 1932, and on the third mortgage note the sum of $2,050, with interest from June 18, 1932.

1. There was no error in the denial of the defendant's motion for a directed verdict.

The plaintiff in this action as it now stands is Morris Gerber, without words describing him as trustee. But the testimony of the plaintiff that as an individual he had no title to the premises in question at the time of the conveyance thereof is binding upon him. Two grounds on which the defendant relies to show that the plaintiff cannot maintain this action are based on an attempt to distinguish between Morris Gerber as an individual and Morris Gerber as trustee of the Gerber Realty Trust as the grantor. The defendant contends in substance (a) that Morris Gerber as an individual was not the grantor in the deed by which the real estate was conveyed to the defendant because as an individual he had no title thereto and, consequently, is not entitled to the benefit of the defendant's agreement to assume and pay the existing mortgages and (b) that if Morris Gerber as an individual was the grantor in this deed his covenants were broken when the deed was given because as an individual he had no title to the premises in question and, consequently, the consideration for the defendant's promise failed. The defendant's contention cannot be sustained on either of these grounds.

According to the undisputed facts, at the time the conveyance to the defendant was made the plaintiff had title to the real estate, subject to the existing mortgages, though as trustee of the Gerber Realty Trust, that is, the plaintiff was at law the owner of such real estate subject to the equitable rights of the beneficiaries of the trust. Kaufman v. Federal National Bank of Boston, 287 Mass. 97, 102, 191 N.E. 422. And he conveyed this real estate by a deed executed by him as an individual and also as trustee of the trust. There was, however, no limitation of the grant to real estate which the plaintiff as against the beneficiaries of the trust had the right under the trust instrument to convey. Therefore, by the deed, title to the real estate, subject to existing mortgages, passed from the plaintiff to the defendant, the grantee, whether or not such conveyance was in violation of the terms of the trust and whether or not the grantee took title to the real estate subject to the terms of the trust. Taft v. Decker, 182 Mass. 106, 65 N.E. 507. And, since at law the official and individual capacities of a trustee are not separated, the plaintiff, though described in the deed as a grantor ‘ individually, and as Trustee,’ was the grantor of the real estate, irrespective of the capacity in which he owned it. Kaufman v. Federal National Bank of Boston, 287 Mass. 97, 101, 102, 191 N.E. 422. See G.L. (Ter.Ed.) c. 4, § 7, cl. 11. He was also the covenanter, and liable personally on the covenants, except as by agreement, express or implied, his liability thereon was limited to the property of the trust. See Hussey v. Arnold, 185 Mass. 202, 203, 204, 70 N.E. 87; Larson v. Sylvester, 282 Mass. 352, 359, 185 N.E. 44. The fact that he executed the deed as a grantor ‘ individually’ negatives any such limitation by agreement. Furthermore, the promise of the defendant to assume and pay existing mortgages, which her acceptance of the deed imports (Flynn v. Kenrick, 285 Mass. 446, 448, 189 N.E. 207), ran to the plaintiff, as grantor, irrespective of the capacity in which he owned the real estate. And the mortgages secured debts for which the grantor was liable, though the transfer of title from the plaintiff as an individual to the plaintiff as trustee took place after the mortgages were made and though the mesne conveyances did not provide that the grantees would assume and pay such mortgages. See Furnas v. Durgin, 119 Mass. 500, 506, 507,20 Am.Rep. 341. See, also, Jones, Mortgages of Real Property (8th Ed.) § 950, and cases cited. Consequently the plaintiff, irrespective of the capacity in which he owned the granted premises, was entitled to the benefit of the defendant's agreement to assume and pay the mortgages. And, even if the plaintiff's rights under this agreement were held by him in trust, an action at law thereon was brought properly by the plaintiff in his own name without words describing him as a trustee. Alfano v. Donnelly, 285 Mass. 554, 555, 189 N.E. 610.

The defendant contends, however, that her promise to assume and pay the mortgages was dependent on the covenants of title in the deed, and that the consideration for such promise failed by reason of breach of such covenants, on the sole ground that the plaintiff as an individual was not the owner of the granted premises at the time the deed was given or the promisee of the defendant's promise contained therein. For reasons already stated, this contention cannot be sustained. The plaintiff was the promises of the defendant's promise and the conveyance of these premises to the defendant was consideration therefor irrespective of the capacity in which the plaintiff owned such property. As already...