Opinion ID: 2175182
Heading Depth: 1
Heading Rank: 2

Heading: The Appeal of Mrs. Angeline L. Garofolo

Text: This is the mortgagee's appeal from an order entered in the Superior Court on December 9, 1968, holding that Mrs. Garofolo was not a bona fide mortgagee of, and had no interest in, the property which is the subject of this action. After plaintiff had filed his notice of appeal to this court, he filed a motion in the Superior Court requesting a stay of the execution of the trial justice's order pending decision of the appeal by this court. On November 12, 1968, the trial justice caused an order to be entered denying the motion to stay as to the plaintiff. However, he granted the motion as to Angeline L. Garofolo, the mortgagee, and Carmine L. and Alder Pendola, the prior owners, up to December 15, 1968, to the extent that defendant was enjoined from demolishing the building. The order also directed defendant to prepare and file a show cause order to be heard on December 2, 1968, directed to the mortgagee and the prior owners requiring each to show cause why the October 16, 1968 order should not be put into effect within 20 days of receipt of the show cause order. The show cause order was entered on the same day, and it appears from the record that the mortgagee and the prior owners were given notice thereof. On November 27, 1968, the mortgagee filed a motion to vacate the show cause order and to dismiss the proceedings against her for the reasons stated in her motion. This motion was filed under Rule 7(b) of the Rules of Civil Procedure of the Superior Court. A hearing thereon was held before the trial justice. After hearing the evidence presented by the mortgagee and defendant, the Pendolas not appearing, the trial justice rendered a decision holding that the order entered on November 12, 1968, should stand and that the building was to be demolished not later than December 15, 1968. In his decision, he made specific findings of fact relative to the interests of the mortgagee and the Pendolas. He also noted that he had ordered this hearing because mention had been made of former owners and the mortgagee of record, and he wanted to be sure that all parties who might have any possible interest in the property were accorded their full rights. With respect to the Pendolas, he found that no rights of theirs were involved. With regard to the mortgagee, he noted that a contention had been made that she had not been notified and that she should have been made a party. He found that she at all times had had knowledge of what was going on and she had chosen not to participate in the proceedings; that she was not a bona fide mortgagee; that she had known of the various orders issued by the town; that she had abandoned all interest in the property; that she had no present interest in the property; and that consequently no interest of hers was being taken away or jeopardized. He also stated that he was convinced that, at best, some of the names that appeared on record were merely straw names, and that he had not been told who the real parties in interest were; that it was apparent to him that she had come reluctantly because she had no interest to protect; that she had given many evasive answers such as she did not remember, she did not know, she left everything to her husband; and that it was significant to him that her husband had not been put on the stand. In the circumstances, he concluded that it was not necessary that she be a party to these proceedings. In the alternative, the trial justice found that, even if Mrs. Garofolo was a bona fide mortgagee and the note was a valid note, it had little or no value for the following reasons: she had released the makers; the mortgage was on property which was subject to so many liens that, in the open market, the note had no value excepting nominal value; even if she did own the note, she was not going to lose by the demolition of the building; the land was worth more without the building than with it; the building was a liability; and at most the property was worth $1,000 or a sum in that neighborhood. In arriving at the value of the property he relied on the testimony of real estate experts who had testified that the building either had no value or that it had a minus value. On the basis of his findings two orders were entered, one on December 5, 1968, relating to the Pendolas and the other on December 9, 1968, relating to the mortgagee, both stating, in effect, that the order entered on October 16, 1968, should stand and that the building was to be demolished not later than December 15, 1968. The mortgagee appealed to this court from the order entered on December 9, 1968. The plaintiff and the mortgagee filed motions in this court to stay execution of the judgment entered in the Superior Court. On January 9, 1969, an order was entered here denying those motions and vacating a temporary stay which we had theretofore granted. The mortgagee's first contention is that she cannot be made a party to this proceeding after the judgment was entered in plaintiff Pucci's case. It appears from the record that numerous administrative hearings were held prior to the instant action; that the mortgagee was at all times represented by the same attorney who represents Pucci in this proceeding and had received notice of every administrative hearing; that she had knowledge of the decisions in all of those hearings; that she was represented by the same attorney when plaintiff commenced this action; and that her attorney told the mortgagee he was filing a petition on behalf of Pucci. It also appears that the trial justice, at her counsel's request, permitted the mortgagee at the show cause hearing to retry the case and permitted testimony with respect to the value of the building and with respect to the question whether the building was in such condition that it should be demolished. In these circumstances we agree with defendant's contention that, by proceeding to fully litigate the entire issue of the original proceeding, the mortgagee has waived any objection to not being made a party to the original proceeding. Her rights were fully protected at the show cause hearing. She was permitted to present real estate experts and other witnesses in an attempt to prove that the building had value, that it was not in violation of the ordinance, and that it was not a public nuisance. The mortgagee's next contention is that, as holder of a mortgage of record, she was a party in interest. We note here that the uncontradicted evidence shows that no one was liable on the note. The mortgagee had released the makers of the note and Pucci had never assumed the payment thereof. The mortgagee's testimony as to the amount of money due her on the mortgage is rather confusing. Nevertheless, the trial justice was warranted in interpreting her testimony to be that she had nothing coming and expected nothing, except that they might give her something. It is clear that the trial justice was not impressed with her testimony nor with the failure of her husband to take the stand. The trial justice found that she was not a bona fide mortgagee and that she was not a party in interest because she had no valid interest in the property. On this record we cannot say that his findings were clearly wrong or that, in making them, he overlooked or misconceived any material evidence. Plantations Bank v. Desormier, 102 R.I. 565, 232 A.2d 371. The mortgagee's final argument is that the property was not in violation of chap. 353, sec. 2 of the ordinance. The trial justice's findings to the contrary are supported by the evidence and will not be disturbed by this court unless they are clearly wrong or unless the trial justice misconceived or overlooked any material evidence. The mortgagee, as appellant, had the burden of establishing this; she has failed to sustain that burden and, therefore, his findings must stand. Plantations Bank, supra. The appeals of Frank L. Pucci and Angeline L. Garofolo are denied and dismissed; the orders appealed from are affirmed, and the case is remitted to the Superior Court for further proceedings.