Katauskas v. Lonstein

• Citation: 266 Mass. 29,164 N.E. 810
• Parties: KATAUSKAS v. LONSTEIN et al.
• Decision Date: 24 January 1929
• Court: United States State Supreme Judicial Court of Massachusetts

266 Mass. 29

164 N.E. 810

KATAUSKAS

v.LONSTEIN et al.

Supreme Judicial Court of Massachusetts, Worcester.

Jan. 24, 1929.

Appeal from Superior Court, Worcester County; H. T. Lummus, Judge.

Suit to enjoin a mortgage foreclosure by Peter Katauskas against Jacob Lonstein and others, with which two petitions to enforce liens for labor and materials were consolidated. From the decree, defendant named appeals. Decree modified, and, as modified, affirmed.

F. P. McKeon, of Worcester, for appellant.

C. E. Tupper, of Worcester, for appellee.

CARROLL, J.

The plaintiff brought two petitions to enforce liens for labor furnished and materials used in the construction of certain buildings on land owned by David M. Burnett and Margaret M. Burnett. One petition was based on a contract made by David M. Burnett with the plaintiff for the erection of a garage, and the other was based on a contract between the same parties for the construction of another building. The defendant Lonstein held a mortgage on these premises.

The plaintiff also brought suit in equity against Lonstein (case No. 34371) to which, by amendment, David M. Burnett was one of the parties defendant. The bill in this suit No. 34371 alleged that the Burnetts were not indebted to Lonstein; that there has been no breach of the mortgage; that Lonstein and the Burnetts fraudulently conspired to have said mortgage foreclosed in order to prevent the petitioner and other lienors from receiving payment for their claims. One of the prayers was that Lonstein the enjoined from foreclosing the mortgage. In the Superior Court a temporary restraining order was issued against Lonstein. He afterwards moved to dissolve the injunction on the ground that he was willing ‘to deposit cash’ in a sufficient sum ‘to secure the plaintiff's claim.’ Thereupon $2,000 was deposited with the clerk, and an interlocutory decree was entered dissolving the injunction.

On November 16, 1927, an interlocutory decree was entered in which it was stated: The ‘following facts appearing,’ that the plaintiff in the case numbered 34371 no longer seeks to attack the validity of the mortgage held by Lonstein or the validity of the foreclosure thereof and no longer seeks to enforce upon the land itself the liens claimed in cases numbered 34209 and 34414 but has waived in open court any right to attack the said mortgage or the foreclosure sale or to enforce the liens specifically upon the land and is content to seek payment of any claim or lien which he may establish out of said deposit, ‘in accordance with the terms thereof, as hereinbefore stated,’ it is ordered that the cases be consolidated and they are hereby referred to a master. Lonstein appealed from this interlocutory decree. He contends that the money deposited was to secure the plaintiff's rights solely in the equity suit No. 34371 attacking the validity of the mortgage to Lonstein, and was not deposited to protect the plaintiff's rights under the lien petitions.

The plaintiff brought the bill in equity to test the legality of the mortgage in order to establish the priority of his liens over the mortgage. His purpose was to show that the mortgage should be set aside and not obstruct the maintenance of his liens. His ‘claim’ as that word was used in Lonstein's motion to dissolve the injunction, was the plaintiff's ‘claim’ that he had liens upon the premises. Following this motion, a decree was entered dissolving the injunction, and on February 28, 1927, the premises in question were sold at public auction to Lonstein for $7,500. When the decree of November 16, 1927, was made, the land had been sold under the mortgage foreclosure and the plaintiff could not then enforce his liens upon the land. His only resource was the fund deposited by Lonstein. In our...