John Hancock Mut. Life Ins. Co. v. Lester

• Decision Date: 09 January 1920
• Citation: 125 N.E. 594,234 Mass. 559
• Parties: JOHN HANCOCK MUT. LIFE INS. CO. et al. v. LESTER et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

234 Mass. 559

125 N.E. 594

JOHN HANCOCK MUT. LIFE INS. CO. et al.

v.LESTER et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 9, 1920.

Report and Reservation from Supreme Judicial Court, Suffolk County.

Action by the John Hancock Mutual Life Insurance Company and others against Hugh W. Lester and John C. Bills, trustees, resulting in findings for plaintiffs. On report and reservation by a single justice for the determination of the Supreme Judicial Court. Decree ordered for plaintiffs.

1. ARMY AND NAVY k34-FORECLOSURE BY MORTGAGEE ON LAND OF OWNER IN MILITARY OR NAVAL SERVICE INVALID WITHOUT COURT ORDER.

Under Act March 8, 1918, s 302 (U. S. Comp. St. 1918, s 3078 1/4 ff), during the time such Soldiers' and Sailors' Civil Relief Act is in force a mortgagee forecloses under power in a mortgage given by one in the military or naval service at his own peril, unless on an order previously granted by the court, and return made and approved by it, and while a sale is not necessarily bad, it is of no validity, if made during the military service of an owner of land, or within three months thereafter, if consummated without such order and return.

2. ARMY AND NAVY k34-EQUITY HAS JURISDICTION OF FORECLOSURE UNDER FEDERAL SOLDIERS' AND SAILORS' RELIEF ACT.

The existence of the Soldiers' and Sailors' Civil Relief Act (U. S. Comp. St. 1918, ss 3078 1/4 a-3078 1/4 ss) gives the equity courts of Massachusetts jurisdiction to foreclose power of sale mortgages given by persons in the military or naval service within the time specified in the act.

3. ARMY AND NAVY k34-SHAREHOLDERS IN REALTY TRUST ‘OWNERS,’ WITHIN SOLDIERS' AND SAILORS' RELIEF ACT RELATIVE TO FORECLOSURE.

Shareholders in a large realty trust, whether their interests were legal or equitable, were ‘owners' of the property mortgaged by the trustees, within the term as used relative to mortgage foreclosures in the Soldiers' and Sailors Civil Relief Act (U. S. Comp. St. 1918, ss 3078 1/4 a-3078 1/4 ss).

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Owner.]

4. ARMY AND NAVY k34-FORECLOSURE UNDER SOLDIERS' AND SAILORS' RELIEF ACT VALID WITHOUT JOINING AS PARTIES REALTY TRUST SHAREHOLDERS IN SERVICE.

Failure to make shareholders in a realty trust parties to action for foreclosure brought against the trustees does not prevent entry of an order of sale by the state court pursuant to the Soldiers' and Sailros' Civil Relief Act (U. S. Comp. St. 1918, ss 3078 1/4 a-3078 1/4 ss), some of the shareholders being in the military and naval service, as their interests are represented by the trustees.

5. ARMY AND NAVY k34-FORECLOSURE AUTHORIZED UNDER SOLDIERS' AND SAILORS' RELIEF ACT ON PROPERTY OWNED BY REALTY TRUST SHAREHOLDERS IN SERVICE.

Mortgagees of property owned by a realty trust, wherein persons in the military and naval service of the United States owned shares, held entitled to decree of the state court authorizing foreclosure of the mortgages in accordance with the Soldiers' and Sailors' Civil Relief Act, s 302 (U. S. Comp. St. 1918, s 3078 1/4 ff); more than 14 months having elapsed since practical termination of the war with Germany by armistice, and there being no showing foreclosure would inequitably affect shareholders in military service.

George L. Mayberry, John L. Wakefield, Francis B. Patten, and Samuel Davis, all of Boston, for plaintiff, John Hancock Mut. Life Ins. Co.

Charles S. Backemann and Woodbury Rand, both of Boston, for plaintiffs President and Fellows of Harvard College.

Edward F. McClennen and Dunbar, Nutter & McClennen, all of Boston, for defendants.

JENNEY, J.

[1] It is well settled that during the time the Soldiers' and Sailors' Civil Relief Act (Act March 8, 1918, c. 20) is in force a mortgagee forecloses under a power of sale contained in a mortgage at his own peril ‘unless upon an order of sale previously granted by the court and return thereto made and approved’ by it; and that while a sale is not necessarily bad, it is of no validity if made during the ‘military service’ of an owner of the land, or within three months thereafter, if consummated without such order and return. U. S. Act March 8, 1918, c. 20, § 302 (40 Stat. 444 [U. S. Comp. St. 1918, § 3078 1/4 ff]); Hoffman v. Charlestown Five Cents Savings Bank, 231 Mass. 324, 121 N. E. 15;Morse v. Stober, 233 Mass. 223, 123 N. E. 780.

[2] It is equally clear that if there is no jurisdiction to make such order as this statute contemplates, mortgagees are deprived of the benefit of this provision, are left without an adequate remedy under powers of sale contained in their mortgages, and must either postpone foreclosure until the act ceases to apply or proceed by entry under R. L. c. 187, § 1, or by action at law under other sections of that chapter. It is urged that no order authorizing foreclosure by sale can be entered unless some owner of the property is in the military service, thus leaving mortgagees without the protection of an order under the act in cases where they either are unable to establish the existence of owners in the service, or where they do satisfy the court that no owners are therein. Hallowell v. Ames, 165 Mass. 123, 42 N. E. 558, recognized that the existence of special facts requiring equitable relief may be a sufficient basis for jurisdiction in equity in the foreclosure of mortgages, and Old Colony Trust Co. v. Great White Spirit Co., 178 Mass. 92, 59 N. E. 673, with an abundant citation of authorities declared the same rule. The statute under consideration expressly provides for orders of foreclosure, and in the Hoffman Case, 231 Mass. at page 329, 121 N. E. at page 17, it is said that ‘the existence of the Soldiers' and Sailors' Civil Relief Act is a special circumstance which is sufficient to give the equity courts of the Commonwealth jurisdiction to foreclose * * * [power of sale] mortgages within the time specified in the act.’ The Morse Case in effect approves this statement. What was said as to this question in the Hoffman Case is now decided.

The mortgages in question are upon valuable property in the business centre of Boston, and were given to secure the payment of $3,500,000. No interest has been paid since that due October 1, 1917, and...