Santiago v. Alba Mgmt. Inc

• Decision Date: 16 June 2010
• Docket Number: No. 09-P-578.,09-P-578.
• Parties: Marilyn SANTIAGO v.ALBA MANAGEMENT, INC., & another.
• Court: Appeals Court of Massachusetts

77 Mass.App.Ct. 46
928 N.E.2d 359

Marilyn SANTIAGO ¹
v.
ALBA MANAGEMENT, INC., & another.²

No. 09-P-578.

Appeals Court of Massachusetts,
Middlesex.

Argued Nov. 12, 2009.
Decided June 16, 2010.

928 N.E.2d 360

John J. Regan, for the defendants.

Benjamin Hiller, Boston (Jeffrey M. Feuer, Cambridge, with him), for the plaintiff.

Present: McHUGH, BROWN, & HANLON, JJ.

928 N.E.2d 361

McHUGH, J.

After recovering a judgment on behalf of his minor daughter against the defendant, Alba Management, Inc. (Alba), Ramon Santiago commenced this action to obtain a declaratory judgment that Alba has both legal and equitable title to a parcel of real estate against which Santiago wishes to levy. A judge of the Superior Court allowed Santiago's motion for summary judgment and entered the declaration he sought. Alba and Windsor Realty, LLC (Windsor), appeal, contending that the record discloses that title to the property is held by Windsor. We disagree and affirm.

Background. The present action follows a suit Santiago brought against Alba in the Housing Court, as father and next friend of his minor daughter, Marilyn, to recover for lead poisoning. On November 1, 2007, Santiago and Alba entered an agreement for judgment in that suit for $300,000, but the judgment stated that Santiago could only attempt to collect the judgment from “any interest that Alba now has or may have in the property located at 177 Elm Street, Holyoke, Massachusetts” (the property). The agreement also stated that Alba denied it had any current interest in the property, while Santiago maintained that Alba was the owner.

In an effort to resolve that dispute, Santiago commenced the present action for declaratory relief seeking to establish Alba's ownership. Windsor, which claims to have obtained title to the property through a series of transfers, was made a defendant in the declaratory judgment action.

Viewed in the light most favorable to Alba and Windsor, see, e.g., Lyons v. Nutt, 436 Mass. 244, 245, 763 N.E.2d 1065 (2002), the record shows that, on February 9, 1988, an entity known as Coats & Luke Associates Limited Partnership granted the First National Bank of Boston a mortgage (the Coats & Luke mortgage) on the property and ten other parcels of land in Holyoke to secure payment of two notes, one in the amount of $4,475,524 on which it was the obligor and the other in the amount of $524,476 on which a man named Lebner was the obligor. The mortgage was upon the statutory condition and contained a statutory power of sale. See G.L. c. 183, §§ 20, 21.

On December 4, 1992, the bank assigned the Coats & Luke mortgage to Alba. Four days later, Alba made peaceable entry on the property for “breach of condition(s) of [the] mortgage” and took possession of it.³ A certificate of entry was recorded the same day.

On February 16, 1996, more than three years after its peaceable entry, Alba purported to assign the Coats & Luke mortgage on the property to Sylvan Corp., as trustee of the Appleton & Elm Realty Trust (Sylvan, trustee). Thereafter, two more purported transfers occurred. On April 30, 2002, Sylvan, describing itself as the holder of the Coats & Luke mortgage, executed what it described as a “foreclosure deed” granting the property to Sylvan Corp., free of the trust, for consideration of $50,000. The deed recited that the mortgage debt had not been paid, that Sylvan, as trustee, had sold the property at public auction,⁴ and that the auction had been preceded by appropriate published

928 N.E.2d 362

notices of sale.⁵ On October 16, 2002, Sylvan Corp. executed a quitclaim deed purporting to convey the property to Windsor for $960,000.

Alba and Windsor moved to dismiss Santiago's complaint, and Santiago moved for summary judgment. After a hearing, a judge of the Superior Court issued a written memorandum denying the motions. Santiago moved for reconsideration, and after a second hearing, the judge, concluding that “as a matter of law, there was no mortgage in existence for Alba to assign to Sylvan,” issued a second memorandum allowing Santiago's motion for summary judgment, ordering entry of a declaratory judgment stating that Alba has owned the property continuously since December 9, 1995, and explaining her reasoning for both actions. This appeal followed entry of the judgment.

Discussion. Understanding why the motion judge was correct is aided by a brief discussion of basics. First of all, under the Massachusetts title theory of mortgages, see Murphy v. Charlestown Sav. Bank, 380 Mass. 738, 747, 405 N.E.2d 954 (1980), a mortgage “splits the title in two parts: the legal title, which becomes the mortgagee's, and the equitable title, which the mortgagor retains.” Maglione v. BancBoston Mort. Corp., 29 Mass.App.Ct. 88, 90, 557 N.E.2d 756 (1990). See Atlantic Sav. Bank v. Metropolitan Bank & Trust Co., 9 Mass.App.Ct. 286, 288, 400 N.E.2d 1290 (1980). The object of the split is twofold and has important consequences.

“The first important object ... is to give to the mortgagee an effectual security for the payment of a debt; another, is to leave to the mortgagor ... the full control, disposition and ownership of the estate.... [The mortgage] is for all intents and purposes security for a debt, not an estate. Until

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