Model Lodging House Ass'n v. City of Boston

Morton, J. The principal question raised by the exceptions to the report of the commissioners is as to the validity of the sale made by Ellen B. Holden under the power contained in the mortgage from Fernald, of which she was the assignee. For the purposes of this hearing, all the facts found by the commissioners are to be taken to be true, and we must therefore assume that the sale was made in good faith and without fraud. On the twenty-fifth day of May, 1870, Mrs. Holden, being the owner of the first two mortgages, entered upon the premises for the purpose of foreclosure, and on the twenty-seventh day of May, and on the third and' tenth days of June, 1870, published in a newspaper printed in Boston, notice of a sale under the power contained in the second mortgage. At this time there was a default in the payment of the interest upon the note secured by the second mortgage. It is not necessary to consider the precise effect of the agreement made December 6, 1867, changing the rate of interest, and the days on which the semi-annual payments were to [138] be made, because the interest was overdue at the time of the entry, whether it is to be computed and paid according to the original note or the new agreement. There being then a default, the holder of the mortgage had a right to enter and sell the premises, and the only question is whether there was a due execution of the power on the part of Mrs. Holden, so as to give a bond fide purchaser a good title at law. We are of opinion that the proceedings were in compliance with the requirements of the mortgage, and were valid. It is objected that the advertisement was defective, because it offers for sale “ all the right, title, interest and estate which, by virtue of the power contained in said mortgage and the assignments thereof, I have the right to sell and convey in and to ” the mortgaged premises. The argument is, that the power authorizes the advertisement and sale of the “ granted premises,” which had been previously described in the mortgage to be “ all that lot of land,” &c., subject to a prior mortgage of $2200 and interest, and that the advertisement should have followed the description in the mortgage. But the legal effect of the advertisement is the same as if the language of the mortgage had been used. The power authorized her to sell an equity of redemption merely, and not the fee of the land. The advertisement offers for sale all that she could sell under the second mortgage. It could mislead no one, and was a substantial compliance with the power. It is also objected that as the number of the mortgaged premises on Chapman Street had been changed, the advertisement should have stated the present number. The advertisement contains a full description of the premises by metes and bounds, being the same description given in the mortgage, with a reference to the record thereof in the registry of deeds. We think this was all that could be required of the mortgagee. It does not appear that she had any knowledge that the number had been changed, and her proceedings, taken in good faith, and otherwise sufficient, cannot be invalidated by the acts of others of which she had no knowledge. The objection that the sale was invalid because the notice did not contain a statement of the amount due on the first mortgage, [139] cannot be sustained. In ordinary cases, where the two mortgages are held by different persons, the second mortgagee could not know what was due on the first mortgage; and he is not obliged to state in his notice what he supposes to be due, subject to the risk of defeating his rights if he is misinformed. The mortgager can protect his rights by ascertaining this fact and giving notice of it at the sale, if deemed necessary. In this case Mrs. Holden held both mortgages, but we think the rule is the same, so far as the sufficiency of the notice is concerned. If she had declined at the sale to state what amount was due on her first mortgage, it would have had a bearing upon the question of her good faith in the transaction. But she attempted, in good faith, to state the amount due, at the sale, and the fact that she stated the amount to be a trifle larger than it appears to be, ought not to invalidate the sale, and defeat the title of a stranger who found the proceed ings correct in form, and purchased in good faith. The omission to state in the notice that there was a default in the performance of the condition of the mortgage is not a material defect. The statement that the sale is by virtue of the power given by the mortgage, necessarily implies that there has been a default, and the omission to state it in express terms can injure no one. The objection that the notice is defective because it did not state that one of the terms of the sale would be that one hundred dollars should be paid down to bind the bargain, cannot prevail. The mortgagee had the right under the power to advertise the sale as a sale for cash, and to require the whole price bid to be paid at the sale. The notice, therefore, was sufficient in this respect. The terms adopted at the sale, giving the bidder ten days to examine the title, and requiring one hundred dollars to be paid down, though a departure from the notice, were clearly more favorable to the mortgagor, and he cannot object to them. It is further urged that the second mortgage was extinguished by its assignment to Mrs. Fernald, the wife of the mortgagor. The mortgage was assigned to her in November, 1867, and she assigned it to Mrs. Holden in December, 1867. Eli Fernald, her Husband, conveyed the premises, subject to the two mortgages, to Haberstroh in June, 1866. He had no interest in the premises [140] while his wife held the mortgage. The relation of husband and wife may have prevented Mrs. Fernald from suing him upon the note, but it did not extinguish the debt and mortgage, or prevent its transfer to Mrs. Holden. Bemis v. Call, 10 Allen, 512. The result of the whole case is, that the finding of the commissioners that the sale to Artemas R. Holden was valid, and that the title to the premises passed to him by the sale and conveyance, subject to the first mortgage, must be sustained. It is therefore unnecessary to consider the ruling of the commissioners as to the rights of Catharine Krumschied under her mortgage, in case the sale should be adjudged to be invalid. Exceptions overruled.