Malaguti v. Rosen

• Decision Date: 10 March 1928
• Citation: 160 N.E. 532,262 Mass. 555
• Parties: MALAGUTI v. ROSEN et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

262 Mass. 555

160 N.E. 532

MALAGUTI

v.ROSEN et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 10, 1928.

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

Suit by Benilde B. Malaguti against Dora Rosen and another. After reference to a master and the overruling of exceptions to the master's report, an interlocutory decree confirming the report and a final decree dismissing the bill were entered, from which plaintiff appeals. Affirmed.F. W. Mansfield, of Boston, for appellant.

W. P. Murray, of Boston, for appellee Rosen.

N. A. Heller and M. Spector, both of Boston, for appellee Buccola.

SANDERSON, J.

In this bill the plaintiff seeks injunctive relief, the cancellation of certain mortgages and mortgage notes, the execution of any documents necessary to restore the records of registered land to the state in which they were before the mortgages were noted, and includes a prayer for general relief. The case was referred to a master and, exceptions to his report having been overruled, an interlocutory decree confirming the report and a final decree dismissing the bill were entered, from which the plaintiff appealed.

In August, 1922, the plaintiff owned unregistered land in Massachusetts and held a mortgage on registered land on Blackwood street, Boston. A few days before sailing for Italy in the latter part of that month, she executed a power of attorney to her husband. Two days later he caused her to execute a power of attorney to counsel who had acted for both of them, for the purpose of enabling him to foreclose the mortgage on that property in the plaintiff's absence. The power to counsel was in general terms; it ‘was recorded in Suffolk county registry district * * * and recorded with the registry of deeds for unregistered land.’ Upon foreclosure under this power, in 1922, she became owner of the property and an owner's certificate of title was issued to her.

In 1925, Malaguti, purporting to act under the power to him, executed a mortgage on the property to each of the defendants, and each defendant received a mortgagee's duplicate certificate issued by the land court in accordance with the provisions of G. L. c. 185, § 68. In the power the plaintiff authorized her husband ‘to do anything of any name or nature in relation to selling, conveying, transferring, mortgaging both real and personal property of any name and nature, to enter and take possession of real and personal property held by me as mortgagee and to foreclose said mortgages, hereby granting unto my said attorney full power and authority in my name and behalf to sign, seal, acknowledge, and deliver any and all deeds or other instruments in writing which I [sie] may deem necessary or proper in the premises, and otherwise, to act in and concerning the premises as fully and effectually as I might do if personally present.’ This power was recorded in the registery of deeds for the county of Suffolk, but not with the records of registered land. Malaguti acted under this power in several matters after the plaintiff's return from Italy, but without her knowledge. The mortgage to Rosen was dated and accepted for registration in the land court September 15, 1925; that to Buccola was dated and registered September 26, 1925. The plaintiff first learned of these mortgages on October 13, 1925, and revoked the power on the same date.

The contention of the plaintiff-that the defendants were nominal parties only and that the alleged mortgages were taken and the money advanced by one individual-was made untenable by the findings that they were separate and distinct persons with no collusion between them in these transactions, and that they held their respective mortgages and notes as purcasers for value in good faith, without notice, except such as they may be charged with as matter of law. The master also found that, in so far as it could be found as a fact, each defendant holds his note secured by mortgage as a holder in due course and that each mortgagee's title is free from all incumbrances, except those which appear on his certificate and those mentioned in G. L. c. 185, § 46.

The first question presented is whether the power of attorney includes within its scope the borowing of money and the execution of notes therefor in the plaintiff's name, secured by mortgages of her registered land. There is no legal objection to a husband acting as agent for his wife in conveying or mortgaging her real estate. In interpreting the meaning of a written instrument:

‘Our first duty is to put ourselves in the place of the parties to the instrument and then to read it giving to its words their plain and ordinary meaning in the light of the circumstances and in view of the subject matter, the acts of the parties and their relations to each other.’ Aldrich v. Bay State Construction Co., 186 Mass. 489, 491, 72 N. E. 53, 54.

‘Parol testimony is admissible in this connection, not to control the written words but to apply them to their proper objects.’ Warner v. Brown, 231 Mass. 333, 336, 121 N. E. 69, 70;Wellwood v. Havrah Mishna Anshi Sphard Cemetery Corp., 254 Mass. 350, 354, 355, 150 N. E. 203.

But this rule does not make admissible statements offered in explanation of the plaintiff's purpose of her expressed intention in executing the power, New York Central Railroad v. Swenson, 224 Mass. 88, 92, 112 N. E. 639,Barbrick v. Huddell, 245 Mass. 428, 438, 139 N. E. 629; and the plaintiff's exceptions to the exclusion of evidence of that nature were rightly overruled. Likewise, evidence of any understanding between the plaintiff and her husband not mentioned in the power and unknown to the defendants was properly excluded.

The master found that after her marriage the plaintiff gave very little attention to affairs outside her home, leaving all matters pertaining to business to her husband who had his property put in the name of his wife and other members of his family for the protection of himself and them; that she did not care what her husband did with money sent to him from Italy representing the proceeds of the sale of property owned by her in that country; that Malaguti caused the power of attorney to be prepared for the purpose of enabling him to handle her affairs and to do as he liked with the properties standing in her name; and that the plaintiff did not care what her husband did under the power as the use of it was only pursuing the course always followed by her, namely, of permitting her husband to do as he saw fit with his or her property, as she left it wholly in his hands. The terms of the power do not suggest that it was intended to be limited in its scope. See Cauman v. American Credit Indemnity Co. of New York, 229 Mass. 278, 118 N. E. 259, Ann. Cas. 1918E, 841.

Authority to borrow money includes authority to execute a promissory note in the principal's name for a loan, Security Savings Bank v. Smith, 38 Or. 72, 62 P. 794,84 Am. St. Rep. 756; or to give the lender the ordinary security therefor, including bonds, notes or acceptances, and collaterals, Hatch v. Coddington, 95 U. S. 48, 24 L. Ed. 339. Under a vote of the directors of a manufacturing corporation giving the president full control of the business, he has authority to borrow money for the corporation and to give its note for the loan. Castle v. Belfast Foundry Co., 72 Me. 167. See Sprague v. Gillett, 9 Metc. 91. The authority to mortgage, expressly given, contemplated the creation of a debt or other obligation to be secured by mortgage. In our opinion upon the facts found in the case at bar the giving of a note for such obligation was incidental to and within the scope of Malaguti's authority under the power. The rule of construction illustrated by Wood v. Goodridge, 6 Cush. 117, 52 Am. Dec. 771, Hoyt v. Jaques, 129 Mass. 286, and Williams v. Dugan, 217 Mass. 526, 105 N. E. 615, L. R. A. 1916C, 110, to the effect that a power of attorney must be strictly interpreted, does not go to the extent of destroying the purpose of the power. Having reached the conclusion that the power of attorney authorized execution of notes to be secured by mortgages, we need not consider whether apart from the power Malaguti had authority to execute notes in his wife's name.

The plaintiff contends that the giving of the power of attorney to counsel, recorded in the registration division of the land court, is evidence that Malaguti understood he was to have no authority over the registered land. The law does not prohibit an owner of property bestowing upon two individuals authority to act in the same matter. One reason for the second power of attorney may have been that the mortgage of land on Blackwood street to be foreclosed was given by the Columbia Investment Company which was controlled by Malaguti. The belief of Malaguti as to the scope of the power could not affect the defendants' rights. They knew that the first power was recorded with the general records and had notice that the second was recorded in the registration division; but they had a right to rely on the fact that the first, which was still in force, in its terms authorized the conveyances which Malaguti made. The words used in the power to Malaguti were:

‘Hereby granting unto my said attorney full power and authority in my name and behalf to sign, seal, acknowledge, and deliver any and all deeds * * * which I may deem necessary. * * *’

This apparent reservation of control of the instruments to be executed is inconsistent with the import of the preceding words and with the purpose for which the power was given as disclosed by the evidence, from which it appears that the plaintiff did not intend to retain power of supervision. The insertion of the pronoun ‘I’ when ‘he’ evidently was intended is treated as a clerical error, and the power is considered as though the latter pronoun had been used.

The fact that no registered land was owned by the plaintiff at the time the power of attorney was executed is not a controlling...