Source: http://masscases.com/cases/sjc/285/285mass453.html
Timestamp: 2019-04-18 11:04:22+00:00

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FANNIE SILVERSTEIN vs. NATHAN SASTER & another.
(5) The plaintiff was entitled to recover the full amount due upon the mortgage note.
CONTRACT for a balance alleged to be due upon a note of the defendants secured by a mortgage of real estate.
Writ in the Third District Court of Bristol dated August 23, 1932.
In the District Court, the action was heard by Milliken, J. Material facts found by him are stated in the opinion.
"2. Upon payment of the balance of the note by the defendants, they would have been entitled to be subrogated to the mortgage notwithstanding they were the mortgagors, and an extinguishment of the mortgage releases the defendants as makers of the note.
"3. After the conveyance of the equity subject to the mortgage, the relation of the defendants to the plaintiff became that of sureties, and as sureties they were entitled to have the land, which constituted the primary fund, applied in payment of the mortgage debt.
"4. If the agreement between Mrs. Gracia and Mrs. Silverstein constituted only an agreement for an extension, it being without the consent of the defendants, the sureties, discharges the latter entirely."
"I find that after the conveyance to Mrs. Gracia, June 12, 1923, the plaintiff looked to her to pay the mortgage debt and dealt with her accordingly, and recognized the relationship of surety and principal existing between the mortgagors and their grantee by her subsequent dealings with her, and that the taking of the deed to Ida Silverstein was without the knowledge and consent of the defendants and was in derogation of their rights.
"While there was not strictly a merger I find the equity of redemption was conveyed so as to be under the plaintiff's complete control. Upon these facts I find the defendants are relieved of responsibility on the mortgage debt, the note in suit."
There was a finding for the defendants, and the action was reported to the Appellate Division for the Southern District. The report was ordered dismissed. The plaintiff appealed.
F. Vera & W. S. Downey, for the plaintiff.
S. Barnet & P. Barnet, for the defendants.
LUMMUS, J. On May 4, 1923, the defendants gave to the plaintiff a witnessed promissory note, now overdue, with interest at nine per cent, secured by a second mortgage upon their land. On June 12, 1923, they conveyed the land to one Gracia, subject to the mortgages which Gracia assumed and agreed to pay. On November 25, 1923, Gracia, "voluntarily" conveyed to her sister, one Moureira, subject to the mortgages which Moureira assumed and agreed to pay. Apparently Gracia continued to control the land, for her discussions with the plaintiff about her inability to make payments as required resulted in a taking of possession by the plaintiff, and later, in May, 1932, in a conveyance by Moureira "subject to said mortgages" to Ida Silverstein, a daughter of the plaintiff, who holds title for the plaintiff. It is to be noticed that Ida did not assume or agree to pay the mortgages. The purpose of the plaintiff in taking title in the name of Ida was to preserve the plaintiff's rights on the mortgage note against the defendants, who had conveyed the land nine years before. The judge finds: "In the conferences between the plaintiff and Mrs. Gracia the plaintiff orally stated she would convey the property back at any time when times were better and payments could be continued."
In this action upon the second mortgage note, the trial judge and the Appellate Division ruled that the plaintiff could not recover. The plaintiff appealed to this court.
personal liability. See Rice v. Sanders, 152 Mass. 108, 110; Bock v. Gallagher, 114 Mass. 28; Costa v. Sardinha, 265 Mass. 319, 321. As to the parties subsequent to the plaintiff mortgagee, the land became the principal debtor and the defendants became sureties.
sent that the mortgagee has entered into a contract with the grantee, such as an agreement for an extension of the mortgage. Codman v. Deland, 231 Mass. 344. In the present case, there is an express finding that the mortgagee looked to the grantee of the mortgagor to pay the mortgage debt, and recognized that the defendants were really only sureties.
manns v. Fanning, 151 Mass. 1. North End Savings Bank v. Snow, 197 Mass. 339, 341. Sherwood v. Warren, 255 Mass. 206, 210.
The ruling was right that the second mortgage standing in the name of the plaintiff did not merge with the equity of redemption standing in the name of Ida Silverstein. Tucker v. Crowley, 127 Mass. 400. Dillon v. Lange, 280 Mass. 427. See also Sullivan v. Neary, 186 Mass. 158. The case differs from Dickason v. Williams, 129 Mass. 182, where the terms of the deed of the equity of redemption given to the mortgagee showed payment of the mortgage.
Although the transactions already recited made the land the primary fund for the payment of the mortgage debt, and the defendants as mortgagors became quasi sureties, the plaintiff is entitled to enforce their personal obligation or the mortgage security or both. City Institution for Savings v. Kelil, 262 Mass. 302, 306, 307. Miller v. Levitt, 226 Mass. 330. Mercantile Guaranty Co. v. Hilton, 191 Mass. 141. Sheldon, Subrogation, (2d ed.) § 115. Williston, Contracts, § 1276. Exoneration and marshalling have not been applied to such a relation, so as to compel the mortgagee to resort first to the land. Marshall v. Davies, 78 N. Y. 414, 421, 422. 41 Am. L. R. 325. Compare Binns v. Baumgartner, 105 N. J. Eq. 58. Even if those principles could be applied, they could be applied only in a suit in equity. In an action at law such as the present, the court must give judgment on the mortgage note, and let the rights of the mortgagor against the land be protected by subrogation.
The plaintiff is entitled to recover the sum due on the note, $779.73, with interest from July 5, 1930, at the rate of nine per cent per annum, and costs. Union Institution for Savings v. Boston, 129 Mass. 82. Lamprey v. Mason, 148 Mass. 231. Kendall v. Equitable Life Assurance Society, 171 Mass. 568, 573, 574. The order of the Appellate Division is reversed, and judgment is to be entered for the plaintiff in accordance with this opinion. G. L. (Ter. Ed.) c. 231, § 124. Spevack v. Budish, 238 Mass. 215, 218.
Vrusho v. Vrusho, 258 Mass. 185, 188. Glaser v. Schroeder, 269 Mass. 337, 341. Royal Paper Box Co. v. Munro & Church Co. 284 Mass. 446, 454.

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