Sher v. South Shore Nat. Bank
| Citation | 274 N.E.2d 792,360 Mass. 400 |
| Court | United States State Supreme Judicial Court of Massachusetts |
| Decision Date | 05 November 1971 |
| Parties | Harry SHER v. SOUTH SHORE NATIONAL BANK & others. 1 |
Benedict Horowitz, for plaintiff.
William A. Mather, for defendants.
Before TAURO, C.J., and CUTTER, BRAUCHER and HENNESSEY, JJ.
This is an appeal from an interlocutory decree sustaining the demurrers of the defendants and from a final decree dismissing the amended bill in equity. The bill alleged bad faith and negligence in the conduct of a foreclosure sale held by the defendant bank of premises upon which the plaintiff had a junior mortgage.
Facts recited in the amended bill, which for purposes of the demurrers must be taken as admitted, Shea v. Shea, 296 Mass. 143, 4 N.E.2d 1015 are here set forth. The defendant bank was the holder of a first mortgage on property located in Hingham. The plaintiff is the holder of a second mortgage on the same property. The second mortgage is dated June 25, 1969, and is in the face amount of $21,240. By letter dated June 27, 1969, the attorney for the plaintiff advised the defendant bank of its interest in the premises and enclosed a check in the amount of $1,444 to reinstate the first mortgage account. The last paragraph of that letter stated, 'In the event that you occasion any problems whatsoever in connection with the first mortgage held by you on the above captioned premises, kindly notify the second mortgagee at the above given address.' On July 3, 1969, the attorney for the defendant bank returned the check to the plaintiff's attorney and advised the plaintiff that he was asked to commence foreclosure proceedings. The letter read, in relevant part, 'I represent the South Shore National Bank, which has asked me to commence and complete foreclosure proceedings in the above-entitled matter.' On November 21, 1969, the mortgagor notified the plaintiff that the premises had been sold that day at public auction for $35,500. The plaintiff, on or about June, 1969, appraised the property subject to the mortgage and determined its fair market value to be $52,500. We will assume that there was no substantial depreciation in the value of the premises from June, 1969, to the date of the sale, that the plaintiff was never notified of the sale and that at all times he was ready and willing to purchase the premises.
The issue raised by the plaintiff's appeal is whether the amended bill presents sufficient allegations of bad faith and negligence by the defendant bank to warrant this court in holding that the judge erred in sustaining the demurrers. A mortgagee in executing a power of sale contained in a mortgage is bound to exercise good faith and put forth reasonable diligence. Chartrand v. Newton Trust Co., 296 Mass. 317, 320, 5 N.E.2d 421. DesLauries v. Shea, 300 Mass. 30, 34--36, 13 N.E.2d 932. West Roxbury Co-op. Bank v. Bowser, 324 Mass. 489, 492, 87 N.E.2d 113. This duty and obligation is available for the protection not only of the mortgagor but of those claiming in his right, including those holding junior encumbrances of liens. Sandler v. Silk, 292 Mass. 493, 496, 198 N.E. 749, and cases cited. However, in this case the plaintiff has failed to allege sufficient facts to support an inference of bad faith or negligence in the defendant bank.
The property in question was sold at the foreclosure sale for less than its appraised fair market value. On this point, the plaintiff concedes that mere inadequacy of price alone does not necessarily show bad faith or lack of due diligence. Sandler v. Silk, 292 Mass. 493, 497, 198 N.E. 749. DesLauries v. Shea, 300 Mass. 30, 34--35, 13 N.E.2d 113. West Roxbury Co-op. Bank v. Bowser, 324 Mass. 489, 493, 87 N.E.2d 113. He argues, however, that the disparity in price may be considered in connection with other allegations to support a finding of fraud or bad faith. This statement is in accord with our law. Sandler v. Silk, 292 Mass. 493, 497, 198 N.E. 749.
The other allegation on which the plaintiff relies to support his claim of bad faith is the failure of the defendant bank to give him actual notice of the date of the foreclosure sale. It is conceded that the defendant bank did satisfy the statutory notice requirements of G.L....
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...be." Edry v. Rhode Island Hospital Trust (In re Edry ), 201 B.R. 604, 606 (Bankr. D. Mass. 1996) (citing Sher v. South Shore Nat'l Bank , 360 Mass. 400, 274 N.E.2d 792 (Mass. 1971) ). In the instant case, Brandao has failed to show any disparity between the foreclosure sales price of the Wo......
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...power of sale contained in a mortgage is bound to exercise good faith and put forth reasonable diligence.” Sher v. South Shore Nat'l Bank, 360 Mass. 400, 401, 274 N.E.2d 792 (1971) (citations omitted). “This duty and obligation is available for the protection not only of the mortgagor but o......
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