Maglione v. BancBoston Mortg. Corp.

• Decision Date: 30 July 1990
• Docket Number: No. 89-P-720,89-P-720
• Citation: 29 Mass.App.Ct. 88,557 N.E.2d 756
• Parties: Peter A. MAGLIONE et al. 1 v. BANCBOSTON MORTGAGE CORPORATION.
• Court: Appeals Court of Massachusetts

Page 756

557 N.E.2d 756

29 Mass.App.Ct. 88

Peter A. MAGLIONE et al. ¹ v. BANCBOSTON MORTGAGE CORPORATION.

No. 89-P-720.

Appeals Court of Massachusetts,

Middlesex.

Argued May 22, 1990.

Decided July 30, 1990.

Edward A. Sokoloff, Maynard, for plaintiffs.

Philipp G. Grefe, Boston, for defendant.

Before BROWN, KASS and PORADA, JJ.

KASS, Justice.

Insofar as the plaintiffs have "a claim of a right to title to [the] real property" ² in question, it is as second mortgagees. The question presented is whether a judge may order the dissolution of a lis pendens recorded by a mortgagee upon condition that the mortgagor or a competing mortgagee place in escrow, or bond, the amount due on the note. We hold that a judge may do so.

Ordinarily, the presence of an undischarged mortgage--at least a recent one--in a record chain of title will serve as well as a lis pendens in discouraging transactions in the encumbered property. What provokes the lis pendens issue in this case is that the plaintiffs, the Magliones, are disputing whether they or the defendant BancBoston Mortgage Corporation ("BancBoston") have a priority of lien in land in Sudbury, which we shall refer to as the "locus." The mortgagor, a real estate developer, has defaulted on its mortgage debt. BancBoston, which became the first mortgagee at the time the developer acquired the property from the Magliones, has foreclosed on the equity of redemption and desires to sell the locus. For reasons which need not detain us, the Magliones contest whether BancBoston continued to enjoy first mortgagee status. They commenced an action in Superior Court asking for a declaration of their status, i.e., whether junior or senior, as a mortgagee and for other relief.

In connection with their action the Magliones filed a motion that the judge before whom the action was pending endorse on their memorandum of lis pendens a finding that "the subject matter of the action constitutes a claim of a right to title to real property or the use and occupation thereof...." G.L. c. 184, § 15, second par., as appearing in St.1985, c. 809. A judge of the Superior Court allowed the motion, and the plaintiffs saw to it that the memorandum of lis pendens was recorded. Aggrieved by the ruling of the Superior Court judge, BancBoston sought review from a single justice of this court, as authorized by the next-to-last sentence of G.L. c. 184, § 15. See Sutherland v. Aolean Dev. Corp., 399 Mass. 36, 39-40, 502 N.E.2d 528 (1987).

The principal amount of the promissory note payable to the Magliones by their defaulting purchase money mortgagor was $70,000. The single justice, before whom the matter came for review, entered an order that, "If and when BancBoston Mortgage Corporation places $70,000, the amount in dispute, in escrow pending the outcome of this litigation, the memorandum of lis pendens shall be vacated." As we understand the plaintiffs' position on appeal, it is that, as mortgagees, they had a legal title to the locus. Their dispute over priority of lien with BancBoston, therefore, bore on their right to title to the locus because, if junior to BancBoston, their mortgage and their legal title would be wiped out by BancBoston's foreclosure. ³

Literally, in Massachusetts, the granting of a mortgage vests title in the mortgagee to the land placed as security for the underlying debt. The mortgage splits the title in two parts: the legal title, which becomes the mortgagee's, and the equitable title, which the mortgagor retains. See Vee Jay Realty Trust Co. v. DiCroce, 360 Mass. 751, 753, 277 N.E.2d 690 (1972); Negron v. Gordon, 373 Mass. 199, 204, 366 N.E.2d 241 (1977). The purpose of vesting legal title in the mortgagee is to secure the debt owed by the mortgagor. Krikorian v. Grafton Co-op. Bank, 312 Mass. 272, 274, 44 N.E.2d 665 (1942). Negron v. Gordon, supra 373 Mass. at 204, 366 N.E.2d 241. Although a mortgage vests title, that title is defeasible and is an off-shoot of the underlying debt. "[T]he debt," as the venerable maxim puts it, "is the principal and the mortgage an incident...." Morris v. Bacon, 123 Mass. 58, 59 (1877). General Ice Cream Corp. v. Stern, 291 Mass. 86, 89, 195 N.E. 890 (1935). So it is that the mortgagor retains an equity of redemption, Carpenter v. Suffolk Franklin Sav. Bank, 362 Mass. 770, 776, 291 N.E.2d 609 (1973), and upon payment of the note by the mortgagor or upon performance of any other obligation specified in the mortgage instrument, the mortgagee's interest in the real property comes to an end. Pineo v. White, 320 Mass. 487, 489, 70 N.E.2d 294 (1946). Atlantic Sav. Bank v. Metropolitan Bank & Trust Co., 9 Mass.App.Ct. 286, 288, 400 N.E.2d 1290 (1980). These principles are enshrined in the mortgage condition described in G.L. c. 183, § 20, as the "Statutory Condition." Under the Statutory Condition, "if the mortgagor ... shall pay unto the mortgagee ... the principal and interest secured by the mortgage, ... then the mortgage deed, as also the mortgage note or notes, shall be void." Indeed, the failure to give a discharge of a mortgage after the underlying condition has been performed subjects the recalcitrant mortgagee to liability in tort. G.L. c. 183, § 55.

In practical terms, the difference...