Levin v. Century Indem. Co.

• Citation: 181 N.E. 223,279 Mass. 256
• Parties: LEVIN et al. v. CENTURY INDEMNITY CO. et al.
• Decision Date: 21 May 1932
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

279 Mass. 256

181 N.E. 223

LEVIN et al.

v.CENTURY INDEMNITY CO. et al.

Supreme Judicial Court of Massachusetts, Norfolk.

May 21, 1932.

Appeal from Superior Court, Norfolk County; F. W. Fosdick, Judge.

Action by Nathan Levin and others against the Century Indemnity Company and others. From an order sustaining a demurrer to the complaint, plaintiffs appeal.

Affirmed.

N. A. Heller, of Boston, for appellants.

E. Field and H. A. Buck, both of Boston, for appellees.

DONAHUE, J.

The defendants have demurred to the plaintiffs' amended declaration in an action of contract. The declaration asserts the liability of the defendants Goldenberg and Guiney as principals, and the defendant the Century Indemnity Company as surety on a bond dated March 25, 1930. The condition of the bond is: ‘That in case of the foreclosure of mortgage hereinafter mentioned by the abovenamed Nathan Levin and Israel M. Levin within one (1) year from the date of this bond, said Harold M. Goldenberg and/or Joseph Guiney shall pay to the said Nathan Levin and Israel M. Levin any loss not exceeding Five Thousand And No/100 ($5000.00) Dollars, occasioned by a legal foreclosure of a certain mortgagewhich is dated April 17, 1929, and recorded with Middlesex South District Deeds, Book 5345, Page 175, and the proceeds from such sale shall not be sufficient to pay the balance due upon said mortgage which has or is to be extended for one (1) year from March 21, 1930; then the above written obligation shall be null and void; otherwise it shall remain in full force and virtue.’ The declaration, in substance, recites that there were negotiations between the plaintiffs, who held a first mortgage, and the defendants Goldenberg and Guiney, who held a second mortgage, on certain real estate in Cambridge; that on March 28, 1930, an arrangement was entered into whereby the title to the real estate was to be acquired by trustees for creditors of the mortgagor under a declaration of trust, the plaintiffs were to extend their mortgage for one year from March 21, 1930, and were to receive a surety company bond ‘indemnifying them to the extent of $5000 for loss on the foreclosure of said mortgage instituted within one year from the date of the bond’; that on the same day, pursuant to the arrangement, the trustees for the creditors acquired title to the real estate, the plaintiffs and the trustees signed an extension of the first mortgage for one year from March 21, 1930, and the defendants delivered to the plaintiffs the bond, copies of the extension of the mortgage and of the bond being annexed to the declaration. The declaration further avers that ‘the purpose of said bond was to secure the plaintiffs to the extent of $5000 against loss on the first mortgage in the event that foreclosure proceedings were commenced within one year from the date of the bond, that the parties intended in said bond to so provide, and that said bond did in fact so provide.’ Further averments in the declaration are that breaches of the conditions of the plaintiffs' mortgage as extended occurred in February and March, 1931, by the failure of the owners to pay certain monthly installment payments on account of principal, interest and taxes according to the provisions of the extension of the mortgage; that the plaintiffs on March 21, 1931, commenced foreclosure proceedings under the power of sale in the mortgage by publication of notice of sale and completed the proceedings after a sale held on April 14, 1931, by recording the foreclosure deed to themselves on May 13, 1931, a copy of the foreclosure deed being annexed to the declaration; that upon the foreclosure of the mortgage a loss resulted to the plaintiffs in excess of the penal sum of the bond and that the defendants have committed a breach of the condition of the bond by refusal to pay the loss and now owe the plaintiffs the sum of $5,000, the penal sum of the bond.

The plaintiffs started their foreclosure proceedings on March 21, 1931, by making the first publication of notice of the foreclosure sale. That was within one year from the date of the bond. The other two publications were made and the foreclosure sale was held after the period of one year from...