Joly v. Stoneman
| Decision Date | 27 May 1930 |
| Citation | 271 Mass. 352 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | ALPHONSE M. JOLY v. E. HAROLD STONEMAN & another. |
March 31, 1930.
Present: RUGG, C.
J., CROSBY, PIERCE CARROLL, & FIELD, JJ.
Order. Contract Construction, Performance and breach, Waiver.
Waiver. Mortgage Of real estate: construction loan mortgage. Assignment.
A construction loan mortgage, covering land upon which the owner proposed to build several houses, contained provisions that the last instalment payment thereunder should not be made by the mortgagee to the owner until forty-one days after the completion of the houses, and that "in case of a foreclosure all right to any payments which shall not have been made shall absolutely cease and be ended." In July the owner signed an order directing the mortgagee to pay a certain sum to the order of one with whom the owner had a construction contract, and to
The order was accepted by the mortgagee. In September, when the mortgagee had paid out a part of the mortgage loan and when a substantial portion of the work of construction remained to be done, the mortgagee refused to advance any more money under the mortgage, but gave the owner an opportunity either to dispose of the houses or to secure permanent loans thereon and to pay the mortgage.
The owner thereafter disposed of five houses; and the mortgagee gave partial releases of the mortgage therefor, received payment of the amounts loaned thereon, and, in addition, received certain other sums from the owner which he distributed to creditors of the owner, including the contractor. The contractor thereby was paid a part of the sum required by the order. In January, the mortgagee commenced foreclosure proceedings upon the remaining houses, which were sold at foreclosure sales in February and March. None of the houses was completed. The contractor received none of the money represented by the mortgages and nothing from the foreclosure sales. He thereafter brought an action against the mortgagee to recover the balance of the sum mentioned in the order. Held, that
(1) By accepting the order, the defendant did not agree unconditionally to pay that sum to the plaintiff, but merely agreed to pay the plaintiff out of what would otherwise have become due to the owner as the last instalment on each house;
(2) The owner, not having completed the houses, had not become entitled to receive the last instalment from the defendant;
(3) Furthermore, the owner's right to payments from the defendant ceased after the foreclosure;
(4) As assignee, the plaintiff had no greater rights against the defendant than had the owner;
(5) The circumstances, that the owner was allowed to dispose of some of the houses and that the defendant executed partial releases of the mortgage for that purpose, did not warrant a finding that the defendant had waived the requirement of his contract with the owner relating to the completion of the houses;
(6) The plaintiff could not recover.
CONTRACT. Writ dated March 17, 1927. Material evidence at the trial in the Superior Court before Qua, J., is stated in the opinion. The judge denied a motion by the plaintiff that a verdict be ordered in his favor, and ordered a verdict for the defendants on both counts of the declaration. The plaintiff alleged exceptions to the denial of his motion and as to the ordering of the verdict on the first count only.
G.C. Richards, for the plaintiff. J.W. Sullivan & J.L. Doyle, for the defendants, submitted a brief.
This is an action of contract on a written order in favor of the plaintiff from The Homebuilders, Incorporated to the defendants which was accepted by them. The declaration is in two counts. The case is before this court on the first count only, since, on motion of the defendants, to the allowance of which the plaintiff did not except, there was a directed verdict for the defendants on the second count.
The first count alleges that the defendants accepted a written order [*] drawn on them by The Homebuilders, Incorporated in favor of the plaintiff upon which the defendants owe the plaintiff $1,384.50. At the conclusion of the evidence the plaintiff filed a motion that a verdict be directed in his favor, which was denied subject to his exception. The defendants at the close of the evidence filed a motion for the direction of a verdict in their favor; this was allowed subject to the plaintiff's exception. The case is before us on these two exceptions.
It appears from the bill of exceptions that in July, 1926, the plaintiff entered into a contract with The Homebuilders, Incorporated, a corporation, to furnish standing finish, cabinet work, and stairs for eleven houses, which the corporation was then erecting on its land, for the price of $2,769. The defendants were construction mortgagees, and it was admitted by them at the trial that the plaintiff had delivered to The Homebuilders, Incorporated all of the material called for by his contract and to the amount claimed by him, and in accordance with the terms of the contract. The plaintiff received from the defendants $1,384.50 in four checks. A written agreement in the form of a construction mortgage between the defendants and The Homebuilders, Incorporated was in force when the order was accepted and is embodied in the bill of exceptions.
The defendants held two construction mortgages on the lots of The Homebuilders Incorporated. These mortgages and the two mortgage notes described in them respectively were admitted in evidence. Each mortgage was for $18,000 payable in six months from date, with interest at the rate of one per cent per month payable semiannually. The first mortgage is dated May 28, 1926, and is upon lots numbered four, six, eight, thirteen and fifteen; the second mortgage is dated June 19, 1926, and covers lots numbered three, seven, fourteen, sixteen and seventeen. A house was to be erected on each of the lots; the work of constructing the houses...
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