Joyner v. Lenox Sav. Bank

• Decision Date: 28 November 1947
• Citation: 76 N.E.2d 169,322 Mass. 46
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: HERBERT NEWTON JOYNER & others v. THE LENOX SAVINGS BANK& another.

322 Mass. 46

76 N.E.2d 169

HERBERT NEWTON JOYNER & others v. THE LENOX SAVINGS BANK& another.

Supreme Judicial Court of Massachusetts, Berkshire.

November 28, 1947

September 16, 1947.

Present: QUA, C.

J., LUMMUS, RONAN WILKINS, & WILLIAMS, JJ.

Mortgage, Of real estate: foreclosure. Waiver. Notice. Constitutional Law, Due process of law. Fraud. Equity Pleading and Practice, Master report of evidence, exceptions to report; Appeal.

There is no statutory requirement that a mortgagee under a mortgage of real estate in the statutory form, entering to foreclose the mortgage and recording a certificate thereof under G. L (Ter. Ed.) c. 244, Sections

1, 2, shall give notice thereof either to the mortgagor or to the holder of a junior mortgage.

An entry to foreclose, for breach of condition through failure to pay interest and taxes, a mortgage of real estate in the statutory form securing a demand note was not rendered invalid by the mere fact that it was not preceded by a demand.

Foreclosure of a mortgage of real estate in this Commonwealth, owned by a citizen of Colorado, by entry and the recording of a certificate under

G. L. (Ter.

Ed.) c. 244 Sections 1, 2, without notice thereof to the owner, was not in violation of art. 4, Section 2, of the Federal

Constitution or of Section 1 of the Fourteenth Amendment thereto.

Findings by a master upon an issue, in a suit in equity by an owner of real estate against a bank mortgagee, whether the defendant had waived an entry under G. L. (Ter. Ed.) c. 244, Section 1, to foreclose the mortgage: "The bank never intended to open or waive said entry. On the contrary, it . . . intended at all times to keep said entry in full force and effect until it ripened into a full and complete foreclosure": was interpreted by this court to mean that there was no ultimate intent to relinquish a known right, and to leave open the question, whether some intentional act of the bank was as matter of law a waiver or required an inference of waiver.

The mere receipt, by a mortgagee of real estate who has made entry to foreclose the mortgage and has recorded a certificate thereof under G.

L. (Ter. Ed.) c. 244, Sections 1, 2, of rents for the premises, and their application to the payment of sums due under the provisions of the mortgage, are not a waiver of the entry if the amount currently owing under such provisions is not thereby paid in full.

Neither a finding of conduct on the part of a bank, mortgagee of real estate, so inconsistent with reliance by it upon an entry to foreclose and a recording of a certificate thereof under G. L. (Ter. Ed.) c. 244,

Sections 1, 2, as to compel as a matter of law a conclusion that the bank had waived the entry, nor a finding of fraud on its part, was required by findings respecting its continuing as before the entry to receive the rents of the property and to apply them upon the owner's mortgage obligations, its having commenced and subsequently discontinued proceedings for foreclosure by sale, certain communications by it to the owner and a junior mortgagee, including statements of account and a communication, sent long after the entry and after the discontinuance of the proceedings for foreclosure by sale, to the effect that foreclosure would be "instituted" unless the mortgage debt were paid, and its failure to give the owner or junior mortgagee notice of the entry.

On an appeal in a suit in equity, this court did not consider evidence reported by a master without authority or matters in the appellant's brief but not in the record.

An interlocutory decree confirming a master's report impliedly overruled exceptions to the report.

BILL IN EQUITY, filed in the Superior Court on October 4, 1945. The case was heard by Leary, J.

In this court the case was submitted on briefs.

H. N. Joyner & F.

H. Wright, for the plaintiffs.

G. A. Newman, for the defendant The Lenox Savings Bank.

F. M. Myers & P.

A. Tamburello, for the defendant Holmes.

WILKINS, J. The main objective of this bill in equity is an adjudication that the plaintiffs Herbert Newton Joyner and Beatrice E. Joyner his wife, are the owners of certain real estate in Lenox subject to a first mortgage held by the defendant bank and to a second mortgage held by their son, the plaintiff Herbert C. Joyner, as assignee. This involves an adjudication that certain foreclosure proceedings conducted by the bank are of no effect and that a deed from the bank to the defendant Holmes, who purchased from the bank and now occupies the real estate, should be cancelled. There are, among others, prayers for an accounting, for an order for delivery of possession, and for "rent or damages . . . for the unlawful detainer of said premises" and "for the use and occupation of said premises . . . [and] personal property" thereon. The case was referred to a master, who filed a report, which was confirmed. The plaintiffs appealed from a final decree dismissing the bill, and from another "final decree," entered on the same day, dismissing the bill against the defendant Holmes. The second decree is superfluous and we disregard it.

On April 13, 1933, the plaintiffs Herbert Newton Joyner and Beatrice E. Joyner (hereinafter sometimes called the owners), as tenants by the entirety, received a deed to the real estate from one Cutting, and assumed and agreed to pay two mortgages. The first mortgage, in statutory form and dated October 19, 1928, was given by one Reading to the defendant bank to secure the payment of a promissory note for $1,500 payable on demand with interest at five and one half per cent payable semiannually. The second mortgage was given by Reading to one Reagan to secure the payment of a note for $500. On August 18, 1933, the second mortgage was discharged, and there was substituted a new second mortgage, running from the owners to Reagan, in the principal sum of $500 payable in two years with interest at six per cent. On February 18, 1936, the new second mortgage was assigned for a valuable consideration to the plaintiff Herbert C. Joyner.

From 1933 to 1937 the owners made their home on the real estate. In the latter year the three plaintiffs went to Denver, Colorado, where they all remained until 1944 except for a brief visit to the real estate by the plaintiff Herbert C. Joyner in 1938. During their absence the real estate was occupied by three successive tenants, a Blanchard family until September, 1940, a Crowell family from November,

1940, until September 15, 1942, and the defendant Holmes until February 26, 1943, when he in good faith purchased the property from the bank and proceeded to make improvements. The original rental to the Blanchards was made by the owners by correspondence from Denver. "Sometime afterwards they made an agreement with the bank whereby the Blanchards would pay the rent . . . to the bank. The bank accepted this arrangement and collected such rents." The rents, however, were insufficient to pay interest and taxes, and as early as some time before November 16, 1939, the owners were in default as to both. On that date the bank began proceedings for foreclosure by sale, and advertised a sale by public auction on the property to be held on December 9, 1939, at 2 P.M. On November 15, 1939, the attorney for the bank wrote the plaintiff Beatrice E. Joyner, "Your letter about the place in New Lenox is at hand and I have taken the matter up with Mr. Sears [treasurer] at the savings bank. He states that the investment committee has gone over the proposition carefully and the committee finds that the property is not being kept up as it should be. The Blanchards are paying the rent to the bank but there is still due taxes for 1938 amounting to $51.75 and 1939 amounting to $55.20 and another tax will be due on January 1st next. There is also due $36.08 for interest. Mr. Sears says that if these amounts are paid up at once that the foreclosure proceedings which have already been started will be dropped. There would be a small charge for advertising and for legal services in preparing the foreclosure papers. I will send you a notice of the sale probably on Friday of this week and if you will pay the above charges at once I will cancel the advertisement and stop any further expense." On December 1, 1939, the bank made an entry to foreclose, without informing the owners, and a certificate under oath of two competent witnesses to prove the entry was duly recorded the following day. G. L. (Ter. Ed.) c. 244, Sections 1, 2. Thereafter "the bank continued to collect all rents" and applied them to the payment of interest, taxes, and repairs, so that at the end of the three year period following the entry taxes and repairs were paid in full, but there were arrears of interest in the amount of $128.07.

The only money other than rents paid to the bank after the beginning of foreclosure proceedings was $75 telegraphed by the plaintiff Herbert C. Joyner, which was received December 8, 1939, and applied toward legal services and expenses of those proceedings. On December 9, 1939, the bank telegraphed the plaintiff Herbert C. Joyner, "Foreclosure proceedings Lenox property postponed two weeks, same hour and place. Bank sending statement." On the same day the bank sent him a statement showing the rents collected, the disbursements made, and the state of the account on December 1, when interest and taxes in arrears were respectively $81.08 and $55.20, and there was a balance of $5.75, which the bank intended to apply in payment of taxes.

On December 15 1939, the plaintiff Herbert C. Joyner wrote a letter to the bank, which, after discussing the account and the real estate, concluded, "As to your loan, I presume what you are interested in is the interest and the security. The security...