Manning v. Liberty Trust Co.

• Decision Date: 09 January 1920
• Citation: 234 Mass. 544,125 N.E. 691
• Parties: MANNING v. LIBERTY TRUST CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

234 Mass. 544

125 N.E. 691

MANNING

v.LIBERTY TRUST CO.

Supreme Judicial Court of Massachusetts, Middlesex.

Jan. 9, 1920.

Exceptions from Superior Court, Middlesex County; Loranus E. Hitchcock, Judge.

Action by Joseph P. Manning against the Liberty Trust Company. Verdict for plaintiff, and defendant excepts. Judgment ordered for defendant.

James E. Cavanagh and Philip A. Hendrick, both of Boston, for plaintiff.

Wm. E. Clapp, of Boston, for defendant.

PIERCE, J.

This is an action of contract or tort to recover damages resulting to the plaintiff from the foreclosure, under a power of sale, of certain mortgages on five distinct parcels of land situated in Watertown, Massachusetts, and owned by the plaintiff. The declaration as amended is in eight counts, four in contract and four in tort. Each count in tort, after describing a particular, mortgaged parcel of land, set out in substance as the grievance complained of--

‘that in the acceptance of said mortgage the defendant was bound in the exercise of the power of sale therein contained to observe good faith and suitable regard for the interest of the plaintiff in any sale that might be made under or by virtue of said power of sale; that on or about [February 2, 1918] the defendant undertook and did sell said parcel of land with the buildings thereon at public auction, but in the conduct of said sale the defendant did not exercise good faith or suitable regard for the interest of the plaintiff in the manner and conduct of the said sale or in the advertising thereof nor in the time in which said sale took place, but on the contrary and notwithstanding the protest of the plaintiff the said premises were sold for a price for below its fair market value and by reason of the lack of good faith on the part of the defendant and the careless and negligent manner in which said sale was conducted, the plaintiff has been damaged.’

The counts in contract were based on the same allegations of fact. Primarily the case is before this court, after a verdict for the plaintiff, on exceptions to the refusal of the presiding judge to order a verdict for the defendant.

‘The plaintiff admitted the legality of the mortgages, admitted that the same were overdue and that the bank had the right to foreclose, admitted that the notices of foreclosure were published in accordance with the requirements of the statute, and of the mortgage, and that the sale was made by a licensed auctioneer,’ and rested his case ‘wholly upon this proposition: That notwithstanding a literal compliance with the requirements of the mortgage and of the statute relative to foreclosure of mortgages, the bank did not exercise good faith and a reasonable regard for the interests of the plaintiff in the conduct of the sale.’ In essence, the allegation of the declaration as interpreted by the plaintiff is a charge of bad faith, evidenced by a dishonest intention to take an unconscionable advantage of the plaintiff through the forms of law and a literal compliance with the terms of the mortgage agreement. Clark v. Simmons, 150 Mass. 357, 23 N. E. 108;Bon v. Graves, 216 Mass. 440, 447, 103 N. E. 1023.

The circumstances bearing upon the good faith of the bank are as follows: In November, 1917, the notes and mortgages then being overdue four months, the bank told the plaintiff in substance that the work on the buildings in process of construction must go on more rapidly; that the interest of the bank was being jeopardized by letting the property be with only one or two men working on it; and that some action on foreclosing the property would be necessitated unless the work was carried on more rapidly. In the middle of January, 1918, the plaintiff was again told that the interest of the bank was jeopardized by the fact that no further work was done after the talk in the previous November. Foreclosure proceedings began January 11, 1918, by...