Maksymiuk v. Puceta

• Decision Date: 24 May 1932
• Citation: 181 N.E. 388,279 Mass. 346
• Parties: MAKSYMIUK et al. v. PUCETA.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

279 Mass. 346

181 N.E. 388

MAKSYMIUK et al.

v.PUCETA.

Supreme Judicial Court of Massachusetts, suffolk.

May 24, 1932.

Exceptions from Superior Court, Suffolk County; M. Morton, Judge.

Action by Pitro Maksymiuk and another against Stanley Puceta. Findings and rulings for plaintiffs, and defendant brings exceptions.

Exceptions overruled.

F. J. Bagocius, of Boston, for plaintiff.

H. Altman and C. J. McCarthy, both of Boston, for defendant.

FIELD, J.

This is an action of contract, brought by Pitro Maksymiuk and his wife, Agafia Maksymiuk. The plaintiffs declared on an alleged promissory note for $1,000, seeking to recover a balance of $650 and interest from the defendant as indorser. The case was heard by a judge sitting without a jury, who made ‘findings and rulings' and found for the plaintiffs in the sum of $613.50. It comes before us on the defendant's exceptions to the admission of evidence, the judge's ‘findings and rulings,’ his refusal to make certain requested rulings, including a ruling that ‘the defendant is entitled to a finding in his favor,’ and the denial of the defendant's written motion that a ‘verdict be directed for him upon all the evidence in the case.’

The ‘findings and rulings' are as follows: ‘The plaintiffs are holders for value of the note in suit. It was executed on March 29, 1930, by one William Sweetlowich, payable to the defendant, and given to him as a guarantee that a third mortgage on property conveyed by Sweetlowich to him would be paid on or before October 1, 1930, and to remain in full force and effect if said mortgage was not so paid. This note was endorsed by the defendant and assigned and transferred to the plaintiffs under the following circumstances. The plaintiffs and defendant, on April 16, 1930, entered into a written agreement to exchange equities in their properties and on April 25, 1930, the defendant executed a deed of his property subject to the third mortgage referred to in the note. The agreement provided that the defendant should assign said third mortgage as a guarantee by the defendant for the payment of said mortgage by the prior owner. The deed contained a provision that the said mortgage was to be paid by Sweetlowich on or before October 1, 1930, ‘and to secure the payment thereof-a collateral mortgage is hereby assigned. * * *’ On the same day the defendant assigned said Sweetlowich mortgage and note and claim secured thereby to the plaintiffs and endorsed the note. [It is obvious from the context and from the agreement, which is made a part of the record, that the reference to ‘said third mortgage’ which was to be assigned by the defendant is a clerical error and that the mortgage intended to be referred to is the ‘Sweetlowich’ or ‘collateral’ mortgage.] The written evidence, as shown by the above named documents, indicate on their face an intention on the part of the defendant to endorse and assign the mortgage and note, not merely to transfer title thereto but also as a guarantor of the payment thereof, and this evidence of intention was corroborated by oral evidence that such was his intention-and by the further fact that the endorsement was not made ‘without recourse.’ To hold the defendant responsiblefor the balance due on the note is not to increase the consideration the defendant was called upon to pay, but to make good the value of the equity which he conveyed to the plaintiffs and for which he received the plaintiffs' equities. I find that the defendant was a guarantor of the payment of the note and endorsed it with the intention of paying it if the maker did not. The mortgage in question was duly and property foreclosed and $350.00 was obtained at the foreclosure sale and is credited upon the note.'

These facts are disclosed by the evidence: On March 29, 1930, one Sweetlowich, in exchange for a parcel of land of the defendant in South Boston, conveyed to the defendant a parcel of land in Dorchester which was subject to three mortgages and gave to the defendant an instrument of the following tenor: ‘For value received I, William Sweetlowich promise to pay to Stanley Puceta or order, the sum of One Thousand ($1,000.00) dollars payable on the first day of October, 1930, with seven per centum interest per annum. This note is given by the maker to the payee as a guarantee that a certain mortgage * * * [the third mortgage on the Dorchester property] will be paid by the maker or anyone on his behalf on or before October 1, 1930, and if the payment is made and said mortgage is discharged * * * then the payee hereby agrees for himself and his heirs, administrators and assigns to cancel this note without any payment, otherwise it is to remain in full force and effect; with interest semi-annually at the rate of seven per cent per annum, during said term, and for such further time as said principal sum, or any part thereof, shall remain unpaid.’ Written across this instrument was the notation that it was ‘secured by mortgage of real estate in South Boston * * * to be recorded in Suffolk Registry of Deeds,’ and there was testimony to the same effect. This real estate in South Boston was the parcel conveyed by the defendant to Sweetlowich.

On April 16, 1930, the defendant entered into an agreement with the male plaintiff for an exchange of real estate, whereby the defendant, the ‘party of the first part,’ agreed to sell and convey to said plaintiff the Dorchester property acquired from Sweetlowich subject to two mortgages, with the further provisions that ‘also there is a third mortgage on the property * * * which is to be paid off by October 1st, 1930, by the prior owner, and as guarantee for such payment, the party of the first part agrees to assign a certain mortgage obtained by him from said prior owner, one Sweetlowich, guaranteeing the payment thereof,’ and that the ‘terms of the exchange transaction are that the respective parties will convey to each other their respective equities in the properties above referred to, without payment of other consideration.’ On April 25, 1930, in accordance with this agreement, the defendant by a deed in short form with quitclaim covenants conveyed the Dorchester property to the plaintiffs, husband and wife, subject to two mortgages, and ‘also subject to a third mortgage * * * the principal sum due on said mortgage being $950.00 payable on or before October 1, 1930 which said mortgage is to be paid by William Sweetlowich, and to secure the payment thereof by said Sweetlowich a collateral mortgage is hereby assigned to the grantees.’ The defendant executed and recorded an assignment to the plaintiffs of his mortgage from Sweetlowich of the South Boston real estate ‘and the note and claim secured thereby.’

The instrument dated March 29, 1930, signed by Sweetlowich and described as a note, bore on its reverse side the following: ‘Endorsements Pay to the order of Pitro & Agafia Maksymiuk, Stanley Puceta. Payments of Principal Oct. 27th, 1930 Rec'd on within note, net by foreclosure sale $350.00.’

Oral evidence was admitted, subject to the defendant's exception, that at the time of the passing of papers between the defendant and the plaintiffs ‘the defendant told the plaintiffs that if Sweetlowich didn't pay the third mortgage and get a discharge on or before October 1, 1930,’ the defendant ‘would pay said third mortgage,’ and that at this time the parties agreed that if Sweetlowich did not so pay it the defendant would do so provided the male plaintiff ‘would thereupon reassign the so-called guarantee mortgage’to the defendant. There was evidence that the defendant wrote his name on the back of the instrument of March 29, 1930, and that the mortgage on the South Boston real estate was foreclosed by the plaintiffs. Other evidence, hereinafter referred to, was admitted subject to the defendant's exception.

No question of pleading appears to have been raised or passed upon in the trial court so that no such question is open here for the purpose of reversing rulings there made, Allen v. Kilpatrick, 277 Mass. 237, 178 N. E. 511, and the finding for the plaintiffs must stand if justified under any legal form of declaring, Weiner v. D. A. Schulte, Inc., 275 Mass. 379, 384, 385, 176 N. E. 114, and cases cited.

The defendant is not liable as indorser of the so-called note of March 29, 1930. Because of the condition contained therein the instrument was not negotiable (G. L. c. 107, § 23, cl. 2, and section 26; see City National Bank v. Adams, 266 Mass. 239, 165 N. E. 470, and cases cited; see, also, Costelo v. Crowell, 127 Mass. 293, 34 Am. Rep. 367), so that the defendant did not become liable thereon as indorser of a negotiable instrument. For the same reason the instrument was not a nonnegotiable promissory note. Central National Bank v. Hubbel, 258 Mass. 124, 154 N. E. 551, and cases cited. The liability of the defendant to the plaintiffs, therefore, if any, was upon a contract of guarantee.

The finding for the plaintiffs on the ground that the defendant was a guarantor of the payment of the instrument described as a ‘note’ was warranted.

The subsidiary findings descriptive of the transactions between the parties and of the foreclosure of the mortgage on the South Boston real estate are supported by the evidence above summarized.

The judge interpreted the documents correctly as indicating ‘on their face an intention on the part of the defendant to endorse and assign the mortgage and note, not merely to transfer title thereto but also as a guarantor of the payment thereof.’ By the written agreement of April 16, 1930, the defendant was to convey only the equity of redemption in the real estate in Dorchester. Fiske v. Tolman, 124 Mass. 254, 256,26 Am....