Shapiro v. Park Trust Co.

• Decision Date: 15 October 1925
• Parties: SHAPIRO v. PARK TRUST CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

253 Mass. 383

149 N.E. 313

SHAPIRO

v.PARK TRUST CO.

Supreme Judicial Court of Massachusetts, Berkshire.

Oct. 15, 1925.

Case Reserved and Report from Superior Court, Berkshire County; W. A Burns, Judge.

Suit in equity by Samuel Shapiro against the Park Trust Company, to assert vendor's lien on lumber, and to have declared void mortgages given to defendant thereon by plaintiff's vendee. On reservation and report. Bill dismissed.G. T. Phelps, P. A. Guthrie, and J. E. Magenis, both of Boston, for complainant.

J. A. Crotty, of Worcester, for respondent.

RUGG, C. J.

This is a suit in equity wherein the plaintiff seeks to assert a vendor's lien on certain lumber and to have declared void mortgages given to the defendant on that lumber by the Howard Lumber Company. The defendant filed a plea setting up res judicata and waiver of its lien by the plaintiff. It is recited in the report that the case came on to be heard upon the defendant's plea. There is no categorical finding that the facts alleged in the plea were true. The hearing, so far as disclosed by the report, appears to have included not only the facts set up in the plea but the question whether certain lumber was so delivered by the plaintiff as vendor to the Howard Lumber Company as his vendee as to enable the latter validly to mortgage it. It is doubtful if that issue was raised by the plea. No order for the appointment of a commissioner was made. The report of the judge contains the substance of the material evidence together with certain rulings of law. The parties have argued the case broadly, but they have also argued it on the theory that the facts alleged in the plea were found to be true. The report fairly interpreted means that all the facts set up in the plea were found to be true or follow as an inevitable consequence from those expressly found to be true and from the reported evidence. The case is considered on that footing.

The pertinent facts are that the plaintiff as seller and the Howard Lumber Company as buyer, each as assignee of the original party, had a contract in writing with each other for the sale by the plaintiff and the purchase by the Howard Lumber Company of a considerable quantity of lumber. By the terms of the contract the lumber was to be sawed under the supervision of the buyer and piled by the seller according to the instructions and under the supervision of the buyer in yards to be rented by the latter. The buyer agreed to pay ‘$25 per one thousand feet log scale for the lumber as cut and put into piles upon receipt’ of invoices and other documents and the further sum of $35 per thousand feet board measure as the lumber was loaded on cars upon receipt of further invoices and bills of lading. Lumber was received by the buyer and piled in its yard and invoices for lumber sawed and piled at $25 per thousand were sent to the buyer by the plaintiff. The buyer thereupon executed and delivered to the defendant several mortgages, which were duly recorded, covering such lumber and including according to the undisputed evidence all the lumber of the mortgagor in its yard. No question is made as to the form of the mortgages. The plaintiff thereafter brought a writ in an action of contract against the Howard Lumber Company in which the present defendant was named as trustee. Service of that writ was made upon the present defendant as trustee and by attachment of all the lumber sold and delivered to the Howard Lumber Company under the contract, which in form was covered by the mortgages given by that lumber company to the present defendant. The declaration in that action was framed to recover the amount due to the plaintiff from the Howard Lumber Company for the lumber sold under the contract. The present defendant as trustee in that action answered, ‘No funds.’ The plaintiff filed interrogatories to the trustee, which were fully and completely answered by the trustee. The interrogatories amongst other matters sought information concerning the loans made by the present defendant to the Howard Lumber Company and the mortgage security given therefor, and concerning the mortgages given covering the lumber here in question and the indebtedness remaining due from the lumber company to the trustee. After hearing on a motion that the trustee be discharged on its answer the judge, before whom that case was tried, found that the plaintiff waived the right further to interrogate the trustee touching the validity of the mortgages held by it. The motion was granted and the trustee was discharged. On the day when the order for the discharge of the trustee was entered, the trustee, the present defendant, made demand upon the attaching officer of the present plaintiff as plaintiff in that action for the amounts due to it from the Howard Lumber Company on its mortgages covering the lumber held by such attachment, setting forth a just and true account of the debts due it. G. L. c. 223, § 75. The attachment was then released by the attaching officer. Final judgment was entered in favor of the trustee.

[2][3] The issue touching the validity of the mortgage from the Howard Lumber Company to the defendant was directly involved in the action brought by the plaintiff against the lumber company, in which the present defendant was summoned as trustee and answered, ‘No funds.’ The facts in that action were within the terms of G. L. c. 223, § 79. The lumber covered by the mortgages was in the actual possession of the mortgagor, who was the defendant in that action, and the mortgagee, the present defendant, was summoned as trustee in the usual way. The provisions of G. L. c. 223, §§ 79, 80, afford full opportunity for the trial of issues concerning the validity and amount due on the mortgage. All questions affecting the interests of the mortgagee in the mortgaged property are to be finally settled in that action, when the mortgagee rightly is summoned as trustee. A mortgagee thus summoned as trustee of the principal defendant in an action against the mortgagor in possession of mortgaged personal property has a right, provided he files appropriate pleadings, such as an answer of ‘No funds,’ to have the validity of the mortgage determined, the amount due thereon ascertained and the attachment discharged, provided the amount, if any, thus found due is not paid.

[4][5] The creditor, having commenced an action by attaching the mortgaged property and summoning the mortgagee as trustee. must pursue his remedy in the mode pointed out by the statute after issue is joined by the trustee. The mortgagee, while the action against him as trustee is pending, is barred of the ordinary rights of a mortgagee. He cannot maintain replevin against the attaching officer. The custody of the attaching officer is lawful until the attachment is dissolved by some of the methods recognized by the law. The mortgagee has not the right to payment of his mortgage within ten days. (G. L. c. 223, § 74), but must await the decision as to the validity of the mortgage and the amount due thereon. He cannot foreclose his mortgage until the respective rights of the parties are settled according to the procedure established by the statute. Hobart v. Jouvett, 6 Cush. 105;Martin v. Bayley, 1 Allen, 381, 383, 384;Boynton v. Warren, 99 Mass. 172, 174;Furber v. Dearborn, 107 Mass. 122;Sullivan v. Lamb, 110 Mass. 167, 169;Flanagan v. Cutler, 121 Mass. 96;Goulding v. Hair, 133 Mass. 78, 80;Simmons v. Woods, 144 Mass. 385, 11 N. E. 659;McDonald v. Faulkner, 154 Mass. 34, 37, 27 N. E. 883.

[6] The contention of the plaintiff that he was merely summoning the present defendant as trustee because it was a debtor to the principal defendant under the general provisions of G. L. c. 246, and not under G. L. c. 223, § 79, is untenable. He made no such specification in his writ. He pursued precisely the course particularized in the latter statute. He put the defendant as mortgagee to all the limitations upon the usual rights of a mortgagee entailed by being summoned as trustee. It was said by Mr. Justice Holmes in Emery v. Seavey, 148 Mass. 566, 568, 20 N. E. 177, 178:

‘The scope and effect of the writ were fixed at the moment of service. It is argued, with much plausibility from what has happened since that the defense to the present action (namely, that the present plaintiff was trustee under Pub. Sts. c. 161, § 79) is an afterthought, and that at the time the plaintiff in the former action meant to summon the present plaintiff only as a debtor of the original defendant. We cannot speculate upon that question. What the former plaintiff did was to...