LaPorte v. Ramac Associates, Inc.

• Decision Date: 21 December 1978
• Docket Number: No. 77-82-A,77-82-A
• Citation: 121 R.I. 82,395 A.2d 719
• Parties: Phyllis M. LaPORTE v. RAMAC ASSOCIATES, INC. and Raymond M. MacDonald. ppeal.
• Court: Rhode Island Supreme Court

Page 719

395 A.2d 719

121 R.I. 82

Phyllis M. LaPORTE v. RAMAC ASSOCIATES, INC. and Raymond M. MacDonald.

No. 77-82-Appeal.

Supreme Court of Rhode Island.

Dec. 21, 1978.

[121 R.I. 87] Macktaz, Keefer & Kirby, Scott K. Keefer, Woonsocket, for plaintiff.

Sidney W. Paull, Warwick, for defendants.

OPINION

WEISBERGER, Justice.

This is an appeal by the defendants Ramac Associates, Inc. and Raymond M. MacDonald from a judgment of the Superior Court awarding the plaintiff $7,387.98 with interest and costs in an action on a promissory note which was executed by MacDonald in his capacity as president and sole officer of the corporation and personally guaranteed by MacDonald.

The facts as found by the trial justice sitting without a jury indicated that on June 1, 1973, plaintiff sold a certain parcel of land in Manville, Rhode Island, and an apartment building thereon to the defendant corporation for $10,000. Half the sum was paid at the time of sale and defendants executed the note and guarantee secured by a mortgage on the Manville property for the remainder. The mortgage agreement contained a statutory power of sale.

The corporation and MacDonald defaulted on the note and the property was sold at a properly advertised auction to plaintiff for one dollar. The plaintiff's attorney was the only bidder at the sale although approximately twenty to twenty-five people were present including an investor and real estate broker.

Thereafter, plaintiff brought an action against defendants for the deficiency due on the note, expenses of foreclosure, and the real estate and fire district taxes not paid by defendants. The defendants responded by pleading that plaintiff received full accord and satisfaction as a result of the foreclosure sale. The action resulted in a judgment for plaintiff representing stipulated ¹ damages plus the amount of fire district taxes paid by plaintiff, and this appeal ensued.

We observe that although defendants have not briefed the issue of accord and satisfaction, they do raise the issue of election of remedies. The defendants are not entitled to review on the latter issue because it was not raised in the Superior Court. Black v. Black, R.I., 377 A.2d 1308 (1977). We note, however, that in Rhode Island foreclosure on a mortgage does not bar a subsequent suit on the secured note for any deficiency. Santerre v. Trillo, 83 R.I. 176, 114 A.2d 392 (1955); Woolley v Tougas, 61 R.I. 434, 1 A.2d 92 (1938). Thus, the defendants' contention that the instant suit is barred by the earlier foreclosure is without merit.

We, of course, accept the proposition that a mortgagor is entitled to credit for the sum realized at a foreclosure sale in diminution of any balance due on the note. The question raised is factual. Specifically, defendants challenge the trial justice's finding that the sum realized at the foreclosure sale truly reflected the market value.

The defendants contend that the trial justice was clearly wrong in finding that the property had no value or a negative value and that the best evidence of the fair market value of the property was the auction bid. The defendants argue MacDonald testified as a qualified expert that after some renovation had been completed, the value of the property at the time of the foreclosure sale was $12,000 to $13,000. The defendants also note that the auctioneer testified (as a witness for the plaintiff) that the building was a poor investment and needed much repair, despite the fact that he had never been inside the building. Finally, defendants note there was no proof that the building had been condemned although the auctioneer testified he saw a condemnation sign on the building. Evidently, the purpose of defendants' observations regarding this testimony is to assert that plaintiff's witnesses were not believable.

In essence, defendants contend their witnesses were more credible than plaintiff's. This argument may be addressed to the factfinder at trial but is inappropriate in appellate proceedings. J. Koury Steel Erectors, Inc. v. San-Vel Concrete Corp., R.I., 387 A.2d 694 (1978). We have repeatedly stated that it is the function of the trial court and not the appellate court to assess the credibility of witnesses, Raheb v. Lemenski,115 R.I. 576, 350 A.2d 397 (1976); Farrell v. Meadowbrook Corp., 111 R.I. 747, 306 A.2d 806 (1973), and that findings of a trial justice sitting without a jury will not be disturbed on appeal unless the trial justice was clearly wrong or overlooked or misconceived material evidence. Coastal Finance Corp. v. Coastal Finance Corp., R.I., 387 A.2d 1373 (1978); Salo Landscape & Construction Co. v. Liberty Electric Co., R.I., 376 A.2d 1379 (1977); Kass v. Ronnie Jewelry, Inc., R.I., 371 A.2d 1060 (1977).

In this case defendants in their brief acknowledge that the trial justice considered the previously outlined...