Willard v. Kimball

CourtUnited States State Supreme Judicial Court of Massachusetts
Citation178 N.E. 607,277 Mass. 350
PartiesWILLARD v. KIMBALL et al.
Decision Date04 December 1931

OPINION TEXT STARTS HERE

Exceptions from Superior Court, Suffolk County; C. T. Davis, Judge.

Petition by 250 Beacon St., Inc., opposed by Horace C. Kimball and others, for registration of title to land. Philip G. Willard was by motion substituted for the original petitioner. A decree was ordered in favor of the substituted petitioner, and the respondents bring exceptions.

Exceptions overruled.R. H. Hopkins and R. H. Davison, both of Boston, for petitioner.

H. S. Avery, of Boston, for respondents.

CROSBY, J.

This petition for registration of title to land under G. L. c. 185, was filed February 17, 1931, by 250 Beacon St., Inc., a Massachusetts corporation, and relates to a parcel of land with the building thereon in the city of Boston. By motion, which was allowed, Philip G. Willard has been substituted for the original petitioner.

The judge found the following facts: Title to the land in question was acquired by 250 Beacon St., Inc., in 1925, and on January 15, 1926, the corporation executed a mortgage to secure a bond issue amounting to $500,000. The mortgagee was Harold A. Moore, of Chicago. He was named as individual trustee in the grant, the habendum and the power of sale. The American Bond and Mortgage Company was named as distributing agent fot the bondholders. The mortgage, among other provisions, contained a power of sale in accordance with the statutes of this commonwealth. The bonds were serial bonds; the first series were to mature January 15, 1928, interest being payable on the total amount. On the same date as that of the first mortgage a second mortgage of $100,000 was executed to Snider and Druker. A building was erected on the land and was completed in the fall of 1926. In March, 1927, the mortgagor defaulted in the payment of interest, and Robert H. Davison, an attorney at law, on instructions from the individual trustee though without written power of attorney, made an entry in his behalf and took possession by reason of the default; a certificate of entry was recorded under the statutes on March 30, 1927. The building was in the hands of a firm of real estate agents, and the net rentals were paid over to Davison, the representative of the mortgagee in possession. From this income he paid the expenses of maintenance and arrears of taxes, and remitted the balance to the American Bond and Mortgage Company for the payment of interest to the bondholders. The income was not sufficient for the payment of the entire interest, but the company, which had sold the bonds, made up from its own funds the balance necessary to pay the entire interest until January, 1929. As default was also made by the mortgagor in March, 1928, in the payment of interest, and in the payment of principal of the first series of bonds, which had matured, a partial foreclosure in the Illinois form was attempted under the direction of the general counsel in Chicago for the mortgagee but against the advice of counsel resident here. A foreclosure deed dated March [277 Mass. 353]31, 1928, was executed to one Fay for the consideration of $6,195, subject however to the first mortgage amounting to $494,000, and subordinate to the continuing lien of the first mortgage to that extent. Fay acted for the American Bond and Mortgage Company, and immediately executed the deed in blank which was retained by Davison. On the same date, March 31, 1928, the mortgagor corporation was dissolved by the Massachusetts Legislation by St. 1928, c. 273, the act being declared an ‘emergency law’ and operative as of that date. In December, 1927, Davison, for the benefit of the individual trustee mortgagee, had obtained from Snider and Druker an assignment of the second mortgage.

In August, 1928, the principal and majority stockholders in 250 Beacon St., Inc., having sone into bankruptcy, their trustee in bankruptcy under license of the bankruptcy court sold their shares to one Curtiss, acting for Davison in behalf of the individual trustee mortgagee. Curtiss at once indorsed the certificates in blank. No transfer of them was ever made on the books of the corporation, of which Davison was unable to obtain possession. However, he called a meeting of the (dissolved) corporation, had the former officers and directors resign, and elected in their places employees of his own office. He questioned the validity of the attempted foreclosure in 1928, and advised testing the question by a bill in equity through Curtiss, or by a new foreclosure, on the assumption that the proceeding in 1928 was invalid, and a petition for registration of title, such registration having been contemplated under the provisions of the mortgage. On October 10, 1929, Fay filled in the deed which he had executed in blank March 31, 1928, with the name of 250 Beacon St., Inc., as grantee, and acknowledged the deed; it was recorded October 11, 1929.

On February 3, 1930, a Committee for the Protection of Bond Holders' issued a circular notice to the bondholders advising reorganization by foreclosure of mortgage or otherwise. On February 6, 1931, a plan of reorganization was submitted to the bondholders, which provided for a new foreclosure and for placing a new mortgage thereafter. On February 10 a notice to hondholders was issued by the individual trustee mortgagee that foreclosure proceedings would be instituted; that over ninety per cent. of the bondholders had deposited their bonds with the committee for recorganization; and recommending the plan to those not yet participating. On February 13, at a meeting of the directors of the mortgagor corporation, it was voted to file a petition for registration of title, and on February 17, 1931, such petition was filed. On March 17 a demand was made on the individual trustee mortgagee, by persons holding bonds to the amount of $10,000, that he foreclose the mortgage. On March 20 he gave a power to one Davis to enter for breach of condition of the mortgage, and on April 1, 1931, such entry was made and a certificate thereof was duly recorded on April 7. On April 17 a notice was issued by the committee stating that it could purchase at foreclosure sale for less than the amount of the mortgage and urging non-participating bondholders to come in.

On March 18, 1931, the respondents brought a suit in equity in the superior court seeking among other things to enjoin such foreclosure. The petition for an injunction was denied. In the meantime a notice dated March 9, 1931, of foreclosure sale to be held April 1, 1931, had been duly published on March 10, 17, and 24, and at the sale held on April 1 the property was bid in by Philip G. Willard for $190,000, to whom a deed was executed, dated April 7, 1931, and duly recorded with an affidavit of sale on April 10. Willard acted as the representative of the committee on reorganization and holds title for the benefit of the bondholders participating in the plan of reorganization.

The original mortgage provided among other things that there should be no priority of one bond over another; that in case of default in the principal or interest, or on dissolution or liquidation of the mortgagor corporation, the individual trustee mortgagee may, and on demand of those holding $10,000 in value of bonds shall, declare the principal of all bonds due, and foreclose by sale under the power in the mortgage; that without such demand or declaration he may, on default, sell under the Massachusetts statutory power; that any bondholder, or committee, or the...

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11 cases
  • Allard v. Estes
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • 26 Septiembre 1935
    ...Co. v. Henry Wood's Sons Co., 209 Mass. 105, 110, 95 N. E. 392;Boston v. Turner, 201 Mass. 190, 196, 87 N. E. 634;Willard v. Kimball, 277 Mass. 350, 357, 178 N. E. 607;Partan v. Niemi, 288 Mass. 111, 114, 192 N. E. 527, 529, 97 A. L. R. 473;Cohens v. Virginia, 6 Wheat. 264, 407, 5 L. Ed. 25......
  • Allard v. Estes
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • 26 Septiembre 1935
    ......679;. Worcester Color Co. v. Henry Wood's Sons Co.,. 209 Mass. 105, 110, 95 N.E. 392; Boston v. Turner,. 201 Mass. 190, 196, 87 N.E. 634; Willard v. Kimball,. 277 Mass. 350, 357, 178 N.E. 607; Partan v. Niemi,. 288 Mass. 111, 114, 192 N.E. 527, 529, 97 A.L.R. 473;. Cohens v. Virginia, 6 ......
  • City Of Worcester v. Ame Realty Corp. & Others, 08-P-2049.
    • United States
    • Appeals Court of Massachusetts
    • 21 Junio 2010
    ...That collusive relationship negated the right of foreclosure by entry. See Trow v. Berry, 113 Mass. 139, 147 (1873); Willard v. Kimball, 277 Mass. 350, 358, 178 N.E. 607 (1931). The judge concluded further that, if JRS had been entitled to notice of the city's tax lien foreclosure action, i......
  • City of Boston v. Cable
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • 29 Mayo 1940
    ...together with such questions of law as are apparent on the record. Webber v. Cox, 256 Mass. 595, 153 N.E. 457;Willard v. Kimball, 277 Mass. 350, 178 N.E. 607;Bacon v. Kenneson, 290 Mass. 14, 194 N.E. 832;McCarthy v. Lane, Mass., 16 N.E.2d 683;Morse v. Kelley, Mass., 26 N.E.2d 326. The judge......
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