Negron v. Gordon

• Decision Date: 12 August 1977
• Citation: 366 N.E.2d 241,373 Mass. 199
• Parties: Edna NEGRON et al. v. Edward E. GORDON, trustee, et al. Supreme Judicial Court of Massachusetts, Suffolk
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 241

366 N.E.2d 241

373 Mass. 199

Edna NEGRON et al. v. Edward E. GORDON, trustee, et al. Supreme Judicial Court of Massachusetts, Suffolk.

Argued Feb. 9, 1977.

Decided Aug. 12, 1977.

Bruce E. Mohl, Boston (Hollis Young, Boston, with him), for plaintiffs.

Kenneth D. Kerr, Boston, for South Boston Savings Bank.

Before HENNESSEY, C. J., and KAPLAN, WILKINS, LIACOS, and ABRAMS, JJ.

ABRAMS, Justice.

The plaintiffs, tenants of Edward E. Gordon (Gordon), trustee of the King Realty Trust (King), brought an action against their landlord pursuant to G.L. c. 111, § 127H, and G.L. c. 186, § 14, in the Housing Court of the City of Boston. On or about December 4, 1975, and again on December 17, 1975, the judge, having found violations of the State Sanitary Code, ¹ ordered the defendant to provide heat and hot water to the premises of the plaintiffs.

On January 8, 1976, contempt proceedings were initiated against Gordon for failure to abide by the terms of the order. Gordon was adjudged to be in contempt and was again ordered to restore the heat and hot water.

On February 25, 1976, plaintiffs' motion to join South Boston Savings Bank (bank) as a party defendant and their motion to amend their complaint were both allowed. By their amendment, relying on G.L. c. 111, § 127N, the plaintiffs sought an order requiring the bank to remedy the defective conditions existing in the premises.

On March 24, 1976, the defendant bank filed a motion to dismiss, and, on May 5, 1976, the action was dismissed as against the bank. On June 10, 1976, the bank was enjoined from voluntarily transferring, assigning or conveying its mortgage interest pending our disposition of this appeal. The plaintiffs were granted leave to appeal in forma pauperis.

Final judgment dismissing the action as to the bank was entered on August 17, 1976, and the plaintiffs thereafter duly noted their appeal. ² We granted the plaintiffs' application for direct appellate review.

In ruling on the motion to dismiss, the judge found as fact certain of the pertinent allegations in the plaintiffs' amended and supplemental complaint. We summarize the facts from the pleadings and the conclusions of the judge. The plaintiffs were tenants in the premises located at 911 Blue Hill Avenue, Dorchester. The defendant Gordon owned the property as trustee for King subject to a first mortgage held by the bank. The mortgage was on the statutory condition, G.L. c. 183, § 20, and, in the event of a breach of condition, the mortgagee had the statutory power of sale, G.L. c. 183, § 21. The defendant Gordon had failed to rectify sanitary code violations. The judge concluded that Gordon was, in all probability, financially unable to rectify the situation. Although Gordon had violated the mortgage's statutory condition, the bank had not entered into possession of the premises pursuant to G.L. c. 183, § 21. The bank neither made entry to foreclose the mortgage under G.L. c. 244, § 1, nor had it commenced foreclosure proceedings under the power of sale as authorized by G.L. c. 244, § 14. After making these findings, the judge determined that the bank did not fall within the ambit of G.L. c. 111, § 127N.

The question presented by this appeal is whether the defendant bank, as holder of a first mortgage is a corporation or other person which "has the authority to decide whether to rehabilitate, or sell or otherwise dispose of the premises" within the meaning of G.L. c. 111, § 127N. ³ We believe that mortgagees are not within the scope of § 127N. Therefore, we affirm the judgment of the Housing Court.

"When the meaning of any particular section or clause of a statute is questioned, it is proper, no doubt, to look into the other parts of the statute: otherwise the different sections of the same statute might be so construed as to be repugnant, and the intention of the legislature might be defeated. And if upon examination the general meaning and object of the statute should be found inconsistent with the literal import of any particular clause or section, such clause or section must, if possible, be construed according to the spirit of the act." Holbrook v. Holbrook, 1 Pick. 248, 250 (1823). We look, therefore, to the entire statute to determine whether or not mortgagees are within the purview of G.L. c. 111, § 127N.

General Laws c. 111, §§ 127A-127N, reflect a comprehensive legislative attempt to effectuate compliance with minimum health and safety standards for residential premises. Section 127N of that chapter, inserted by St.1974, c. 681, does not purport to create new causes of action. Instead, it authorizes the joinder of certain parties "(i)n actions brought under this chapter against owners of residential premises." The statute must therefore be construed in a manner consonant with the sections of c. 111 which create causes of action against owners.

Section 127B empowers the board of health to issue a written order to the owner of housing directing him to rectify conditions which render the premises unfit for human habitation. If the owner fails to comply with such order, the board of health may institute enforcement proceedings in the Superior Court. Further noncompliance may eventuate in the demolition of the building. This section of the statute requires that a copy of the board of health's order be sent to the mortgagee. In the event of resort to the Superior Court, it is further required that the mortgagee receive notice of the court proceedings.

Section 127C authorizes a petition to a District Court by an aggrieved tenant or by a board of health to remedy violations of the sanitary code. Section 127D provides that an order of notice issue to the owner of the premises, and requires the owner to file an answer; the answer must include the names of the mortgagees or lienors. If a District Court judge finds that the facts are as alleged in the petition, he may order that rental payments (but not mortgage payments) be deposited with the clerk of the court so that the court may make disbursements to alleviate the unsanitary conditions. G.L. c. 111, § 127F. Section 127F also requires that a copy of any court order be sent to the mortgagees and lienors.

Section 127H authorizes suit in the Superior Court by a tenant who resides in premises where there exist conditions which violate standards of fitness for human habitation. On the filing of such a petition, process is to issue and be served on the owner. Again, mortgagees must be given notice of the pendency of the petition and the date of the scheduled hearing. There is no requirement that process issue or be served on the mortgagees. If the factual allegations are substantiated, several remedies are available, including the appointment of a receiver. G.L. c. 111, § 127H (d ). A mortgagee is entitled to a copy of any order, filing, or decree made by a Superior Court judge. In the event that a receiver is appointed, the receiver is to apply rents to bring the housing up to minimum standards, G.L. c. 111, § 127I. If such funds are insufficient to complete the task, the receiver is authorized by G.L. c. 111, § 127J, to apply for financial assistance from the Commonwealth. If the receiver intends to pursue this course of action, a hearing is mandated. Mortgagees must be notified of the time and place of the hearing. If funds are expended pursuant to § 127J, such financial assistance is the debt of the owner. The receiver has no authority to look to the mortgagee for financial assistance.

Our examination of the statutory scheme leads us to conclude that the Legislature was aware of mortgagees and their unique interest in substandard housing. We therefore think it significant that § 127N omits any explicit reference to mortgagees. Such an omission casts substantial doubt on the plaintiffs' assertion that the Legislature contemplated the inclusion of mortgagees in the statutory term "any individual, trust or corporation, partnership, association or other person." We believe that, had the Legislature meant to bring mortgagees within the purview of § 127N, it would have done so by specific reference to them.

Further, if the Legislature, by passage of § 127N, had made mortgagees parties to actions under the various sections, it would have amended those preceding sections to allow for mortgagees to participate as defendants in the same manner as the owners of such premises. This it has not done. Moreover, if § 127N were intended to make mortgagees parties to those actions, such persons would be entitled to more than mere notice of the time and place of hearings or copies of court orders. The notice requirement is merely a legislative recognition of the mortgagee's unique interest in the property. It is not the equivalent of service of process; it is not the exercise of the court's jurisdiction over the mortgagee.

Further, had mortgagees been included in § 127N, then most certainly the Legislature would have amended § 127J to permit the receiver to look to the mortgagees for financial assistance to correct unsanitary conditions. This it has not done.

Additionally, we do not believe that the words of the statute lend themselves to the construction urged by the plaintiffs. We arrive at this conclusion by again scrutinizing the language of § 127N, this time in light of basic principles of the law of mortgages.

Prior to breach of the statutory condition, see G.L. c. 183, § 20, the mortgagee holds bare legal title to the property subject to defeasance on the mortgagor's performance of the obligation secured by the mortgage. Perry v. Miller, 330 Mass. 261, 112 N.E.2d 805 (1953). Pineo v. White, 320 Mass. 487, 70 N.E.2d 294 (1946). It is only for the purpose of securing the debt that the mortgagee is to be considered owner of the property. Boston v. Quincy Mkt. Cold Storage & Warehouse Co., 312 Mass. 638, 649, 45 N.E.2d 959 (1942). Krikorian v. Grafton Co-op. Bank, 312 Mass. 272, 274, 44 N.E.2d 665 (1942). "(A)ll the statutes...