MacFarlane v. Thompson

• Decision Date: 15 June 1922
• Parties: MACFARLANE v. THOMPSON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

241 Mass. 486

135 N.E. 869

MACFARLANE

v.THOMPSON.

Supreme Judicial Court of Massachusetts, Suffolk.

June 15, 1922.

Appeal from Superior Court, Suffolk County; Keating, Judge.

Suit by Elizabeth MacFarlane against S. Bayard Thompson to restrain the foreclosure of a real estate mortgage and for an accounting. From a decree fixing the amount required for redemption, plaintiff appeals. Reversed, and bill dismissed, unless proper parties joined.

Defendant on default had made an entry on the premises, and, though notified by plaintiff not to make any repairs or alterations, did rebuild a cesspool and completed the upper apartment of the house, and collected rents. Defendant had assigned the mortgage and mortgage notes as collateral security, and his agent, who took possession under the mortgage, did not act as agent or attorney for the assignee, and had no authority from him. The decree included in the amount necessary to redeem the expenditures for the cesspool and for completing the upper apartment.Stanley W. C. Downey, of Boston, for appellant.

William Reed Bigelow and Louis L. Green, both of Boston, for appellee.

CARROLL, J.

The plaintiff executed to the defendant in December, 1919, a second mortgage of real estate for the sum of $2,834.69, ‘upon the statutory condition, for any breach of which the mortgagee shall have the statutory power of sale.’ It was payable in monthly installments. In February, 1920, the mortgage was assigned to one Kempster by an assignment in common form; the master found that it was assigned as collateral security for the defendant's promissory note for $1,500, payable to Kempster. The assignment was not recorded. There was a default in the March installment and the defendant's agent in that month made, in the presence of two witnesses, an open, peaceable and unopposed entry and took possession of the premises; the certificate of entry was duly recorded. The plaintiff alleges that the defendant has advertised the estate for sale under the power in the mortgage, has collected the rents and assigned the mortgage, that she is ready and willing to pay the amount due on the mortgage. She asks that a temporary injunction issue restraining the foreclosure sale; that the defendant be restrained from collecting the rents, and, upon the payment of all sums due, from foreclosing the mortgage; and that the plaintiff be entitled to redeem.

The case was sent to a master, who stated the accounts between the parties and allowed the defendant for expenses in connection with the foreclosure sale. A decree was entered ordering that the plaintiff might redeem on payment of the amount found due by the master, with interest. The plaintiff appealed. We assume that the plaintiff had the right of possession under the terms of the mortgage.

The master made no specific finding as to the foreclosure sale, and the final decree makes no reference to it; but it is shown by the pleadings that there was an attempt to exercise the power, and in the account the defendant was allowed for the expenses of the sale, and an ad interim injunction was issued, restraining It. We therefore consider the question of the defendant's right to exercise the power of sale.

R. L. c. 187, § 14, now G. L. c. 244, § 14, authorizes the person who has the mortgagee's estate in the land mortgaged to do all the acts required by the power of sale, and it is well settled that an assignee of a mortgage has the right to exercise the power of sale. Union Trust Co. v. Hasseltine, 200 Mass. 414, 86 N. E. 777,16 Ann. Cas. 123. As the power passed by assignment to the assignee and holder of the mortgage, he held the mortgagee's estate in the premises, the legal title of the mortgagee was vested in the assigness and the defendant had no authority to exercise the power. The right to exercise it belonged to the assignee and not to the defendant. Barnes v. Boardman, 149 Mass. 106, 115, 21 N. E. 308,3 L. R. A. 785;Gould v. Newman, 6 Mass. 239, 241;Sadler v. Jefferson, 143 Ala. 669, 39 South. 380;Harnickell v. Orndorff, 35 Md. 341, 342;Cohoes Co. v. Goss, 13 Barb. (N. Y.) 137.

The decree also provided that the plaintiff could redeem on paying the amount found due by the master. Included in this amount were the expenses of the defendant in advertising the sale. As the defendant had no legal right to enforce the power, the plaintiff could not be compelled to pay the expenses incurred by the defendant in the sale.

The bill, however, could not be entertained as a bill to redeem until all the parties were before the court. The assignee of the mortgage was interested in the account. He held the legal title to the mortgage and was a necessary party to the plaintiff's bill in equity. He stood in the place of the original mortgagee and the decree for redemption could not be entered unless he was a party to the proceedings. Lennon v. Porter, 2 Gray, 473;Doody v. Pierce, 9 Allen, 141.

The plaintiff further alleged that the defendant prior to the entry to foreclose, had assigned the mortgage and was not at that time the owner of it, and that when the defendant's agent made the entry he did not act as the agent of the assignee, Kempster, and had no authority from him. Under R. L. c. 187, § 1 (G. L. c. 244, § 1), a mortgagee may, after breach of conditions of the mortgage, recover possession by entry, if not opposed by the mortgagor or by action, and by R. L. c. 187, § 8 (G. L. c. 244, § 8), the entry may be made or action brought by the assignee of the mortgage. The action for possession is to be brought like a writ of entry against the tenant of a freehold, and is to be conducted as if brought by the original mortgagee. In Wolcott v. Winchester, 15 Gray, 461, it was held that the assignee of a mortgage, whose assignment was not recorded in the...