Wilshire Enterprises, Inc. v. Taunton Pearl Works, Inc.

• Decision Date: 02 February 1970
• Citation: 356 Mass. 675,255 N.E.2d 375
• Parties: WILSHIRE ENTERPRISES, INC. v. TAUNTON PEARL WORKS, INC.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 375

255 N.E.2d 375

356 Mass. 675

WILSHIRE ENTERPRISES, INC. v.TAUNTON PEARL WORKS, INC.

Supreme Judicial Court of Massachusetts, Bristol.

Argued Jan. 9, 1970.

Decided Feb. 2, 1970.

John F. Dunn, Boston, for defendant.

Benjamin D. Lewis, Taunton, for plaintiff.

Before WILKINS, C.J., and CUTTER, KIRK, SPIEGEL, and REARDON, JJ.

WILKINS, Chief Justice.

This bill to restrain the foreclosure of a mortgage was heard upon 'an agreement of facts,' which is not in the record, but which the trial judge in his 'findings and order' said amounted to a case stated.From a final decree enjoining the foreclosure the defendant appealed.

The defendant is the holder of an instalment note dated December 31, 1967, secured by a mortgage on real estate on Ingell Street, Taunton, the terms of which provide that the sum of $2,500 is due on each consecutive quarter of each consecutive year commencing with April 1, 1968, together with interest on the unpaid principal at the rate of six per cent per annum until paid in full, the entire balance of unpaid principal to be paid in ten years from date of the note.There are the further provisions that in the event of default outstanding for more than thirty days, the entire unpaid balance of principal together with interest shall become due and payable forthwith at the election of the holder, and 'Failure to exercise this option shall not constitute a waiver of the right to exercise the same in the event of a subsequent default.'

The defendant did not send the plaintiff a notice when the first instalment was due or within the grace period provided in the note.(The court ruled none was required.)When the instalment was not received, the defendant by letter dated May 3, 1968, notified the plaintiff of the default and the right of acceleration.

Immediately upon receipt thereof, the plaintiff sent the defendant a check in full for the amount due with a letter of explanation in which it was stated: 'My past practice has always been to await receipt of notice from the mortgagee of the amount due and payable on the payment date.'The amount sent was $5,500, which was the quarterly instalment of $2,500 principal and $3,000 interest.

The defendant, without notice to the plaintiff, accepted and deposited the check and sent a letter dated May 9 in which it said that the check was accepted without waiving the default under the note.

By letter dated June 11the defendant notified the plaintiff that it was exercising its option to call the unpaid principal of $197,500 with interest and would foreclose the mortgage in event of failure forthwith to comply.The letter stated that the notice was sent because of default in payment of the instalment due April 1, 1968, and because of the destruction and removal of a building from the premises.

On June 24the plaintiff sent the defendant a check for $5,477.50, being the principal instalment currently due with interest from April 1 through June 30 and for the period of delay from April 1 through May 6.

By letter dated June 28the defendant returned the check and reiterated its intention to call the...