Nutter v. Mroczka

• Decision Date: 26 June 1939
• Citation: 21 N.E.2d 979,303 Mass. 343
• Parties: NUTTER v. MROCZKA et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

303 Mass. 343

21 N.E.2d 979

NUTTER

v.MROCZKA et al.

Supreme Judicial Court of Massachusetts, Middlesex.

June 26, 1939.

Action of contract by John P. Nutter against Pawel Mroczka, alias, and others, for damages for failure of the named defendant to pay a mortgage that he assumed and agreed to pay on realty that plaintiff sold to the defendant. A finding was made for the plaintiff, and from an order dismissing a report to the Appellate Division the defendants appeal.

Affirmed.Appeal from Appellate Division of District Court of Lowell; O'donnell, judge.

F C. Zacharer, of Lowell, for appellants.

H. L. McLaughlin, of Lowell, for appellee.

FIELD, Chief Justice.

This action of contract was brought in the District Court-by writ dated October 19, 1936-to recover damages from the defendant because of his failure to pay a mortgage that he assumed and agreed to pay on real estate that the plaintiff sold to the defendant.

The case was heard upon an agreed statement of facts, which included the following facts: ‘The plaintiff purchased the property on July 17, 1923, and on the same day placed a mortgage thereon for $1200.00 running to the Lowell Institution for Savings securing a note for the same amount to the said bank due and payable in one year from its date and carrying 6% interest per annum payable semi-annually. * * * In the deed from the plaintiff to the defendant, it was provided that ‘this conveyance is made subject to a mortgage of $1200.00 to the Lowell Institution for Savings which the grantee assumes and agrees to pay.’ Acceptance of the deed and possession of the premises were made by the defendant on July 28, 1923, the date of the deed. This deed was under seal and it was duly recorded * * * and was admitted in evidence. Thereafter, the defendant paid the interest to the bank each six months as it became due until the payment of interest due July 17, 1936, when he failed to pay it and informed the bank that he would no longer make payments of the interest. * * * The mortgagee * * * foreclosed the mortgage on September 24, 1936, and sold the premises to itself for $850.00 and foreclosure deed was duly recorded on September 26, 1936. Demand was made on the plaintiff by the mortgagee for the deficiency of $350.00, plus interest and costs of $28.00, making a total of $378.00 due the bank. The plaintiff has not paid any part of the deficiency and claims this amount of $378.00 from the defendant.'

The plaintiff made requests for rulings which were granted, and the defendant made requests for rulings, of which some were granted and others were denied. There was a finding for the plaintiff, and a report to the Appellate Division which was dismissed. The defendant appealed.

The only contention made by the defendant is that recovery by the plaintiff is barred by the statute of limitations because the action was not commenced within six years from July 17, 1924, the day when the mortgage became due. This contention cannot be sustained.

The deed from the plaintiff to the defendant does not appear to have been signed and sealed by the defendant, and consequently he was not bound by it as by a deed. The defendant, however, by accepting this deed containing the provision that he ‘assumes and agrees to pay’ the mortgage became bound to do so by reason of his promise implied from such acceptance whereby an obligation was created in the nature of simple contract, and not in the nature of a contract under seal. Pike v. Brown, 7 Cush. 133, 134;Locke v. Homer, 131 Mass. 93, 102,41 Am.Rep. 199;Goodenough v. Labrie, 206 Mass. 599, 601, 92 N.E. 807,138 Am.St.Rep. 411;Costa v. Sardinha, 265 Mass. 319, 321, 163 N.E. 887. See, also, Everett Factories & Terminal Corp. v. Oldtyme Distillers Corp., Mass., 15 N.E.2d 829, 118 A.L.R. 965. This distinction was marked, while the old forms of action were retained, by the fact that the grantee must be sued in assumpsit, and not in covenant. See Locke v. Homer, 131 Mass. 93, 102,41 Am.Rep. 199. By reason of the nature of the obligation the applicable statute of limitations is not the twenty-year statute applicable to actions ‘upon contracts under seal,’ G.L. (Ter.Ed.) c. 260, § 1, First, but rather the six-year statute applicable to actions ‘of contract founded upon contracts or liabilities, express or implied, except actions limited by the preceding section.’ c. 260, § 2, First. See Willard v. Wood, 164 U.S. 502, 520, 17 S.Ct. 176, 41 L.Ed. 531;Taylor v. Forbes' Administrator, 101 Va. 658, 663, 665, 44 S.E. 888;Bishop v. Douglass, 25 Wis. 696. See also cases collected in 51 A.L.R. 981. In jurisdictions where a different conclusion has been reached the obligation of the grantee to assume and pay a mortgage implied from the acceptance of the deed has been regarded, contrary to the long established law of this Commonwealth, as an obligation in the nature of a contract under seal. See Brownson v. Hannah, 93 Fla. 223, 227, 231, 111 So. 731, 51 A.L.R. 976.Skeen v. Glower, 174 Ga. 510, 162 S.E. 917;First National Bank of Berwyn, Okla. v. Raymer, 180 Okl. 529, 531, 532, 71 P.2d 485;Bracklein v. Realty Ins. Co., 95 Utah, 490, 503, 504, 80 P.2d 471.

The implied contract of the defendant to assume and pay the mortgage bound him to pay the note secured thereby as its maturity, that is, on July 17, 1924. Braman v. Dowse, 12 Cush. 227, 229;Locke v. Homer, 131 Mass. 93, 105,41 Am.Rep. 199. This is the force not only of the word ‘pay’ (see Rice v. Sanders, 152 Mass. 108, 111, 24 N.E. 1079,8 L.R.A. 315, 23 Am.St.Rep. 804), but also of the word ‘assumes.’ See Locke v. Homer, 131 Mass. 93, 109,41 Am.Rep. 199. Indeed, the defendant's agreement was to pay on that date an amount which would discharge both the note and the mortgage given to secure it. Locke v. Homer, 131 Mass. 93, 97, 108,41 Am.Rep. 199;Rice v. Sanders, 152 Mass. 108, 110, 24 N.E. 1079,8 L.R.A. 315, 23 Am.St.Rep. 804;Costa v. Sardinha, 265 Mass. 319, 321, 163 N.E. 887. In the present case, therefore, upon failure of the defendant to pay the note at maturity-July 17, 1924-a cause of action for the amount due thereon immediately accrued to the plaintiff though the plaintiff had not paid the note or sustained any loss by reason of non-payment. Furnas v. Durgin, 119 Mass. 500, 506, 508,20 Am.Rep. 341.Locke v. Homer, 131 Mass. 93, 41 Am.Rep. 199;Muhlig v. Fiske, 131 Mass. 110, 113. The amount recoverable, however, where, as here, there has been a foreclosure of the mortgage, ordinarily would be limited to the amount remaining due after such foreclosure. Gerber v. Berstein, Mass., 3 N.E.2d 223. Compare Rice v. Sanders, 152 Mass. 108, 24 N.E. 1079,8 L.R.A. 315, 23 Am.St.Rep. 804.

Sometimes a deed provides expressly not only that the grantee shall pay the mortgage, but also that he shall save the grantor harmless, that is, indemnify him for any loss sustained Such a provision in a deed does not restrict the effect of the grantee's promise, implied from acceptance of the deed, to pay the mortgage. Locke v. Homer, 131 Mass. 93, 109,41 Am.Rep. 199. Where a deed is in this form the grantor, it seems has the option to bring suit upon the implied contract to pay the mortgage or upon an implied contract of indemnity. Since there would be no breach...