Gilpin v. Brooks

Carroll, J. The defendant Brooks sold to Cohen and Leven seven lots of land. Upon two of these lots Cohen and Leven gave the defendant Morse mortgages, each for the sum of $5,500, to secure a construction loan, and a second mortgage of $400 on each lot to Brooks. The plaintiff and his partner, since deceased, furnished lumber to Cohen and Leven for the erection of two houses on these lots. December 3, 1915, the plaintiff, in an action at law, attached the real estate of Cohen and Leven to the amount of $4,000. January 3, 1916, Brooks entered upon the premises for breach of the conditions in his mortgage, and February 5, 1916, caused notices of sale to be published under the power in the mortgage, the time of sale being fixed for March 9, 1916. After the attachment, Morse refused to make further payments under the con [324] struction loan agreement, and Cohen and Leven informed Brooks that they were unable to continue the work. The houses were then unfinished, — one of them open and exposed to the weather; it was in the winter season — to permit them to remain in such condition would have resulted in serious loss. Brooks notified Cohen and Leven that he intended to complete the houses and requested them to convey to him their equity of redemption. They did this on January 12, 1916, when a deed was made to one Laffey for the benefit of Brooks. As soon as this conveyance was made, Brooks began the work of completing the structures. On one of the houses he has contracted for materials and supplies to the sum of $1,735.25, of which he has paid $652.38; on the other he has contracted for $3,132.13, of which he has paid $822.58. The expenses of foreclosure were $110, and the value of Brooks’s services supervising the work, the master finds to be $100. At the date fixed for the mortgage sale, the plaintiff secured an injunction restraining it. The plaintiff in his bill alleges that Cohen and Leven made false representations, and relying upon them, the lumber was sold; that the title to the land was placed in their names so that they might obtain credit for materials for the erection of the houses, in which scheme Brooks participated; that they conveyed the land to Laffey, and on foreclosure and sale, the profits were to be divided between Brooks, Cohen and Leven. The plaintiff also states he is willing to pay the two mortgages for $400 each, and asks that Brooks be restrained from further proceeding to foreclose the mortgages. The defendant Brooks, in his answer offers to execute and deliver to the plaintiff an assignment of the mortgages, provided he is paid what is due under the mortgages and also what is due on account of his expenditures in completing the buildings. The action at law against Cohen and Leven is pending in the Superior Court. There is no allegation in the bill that they are insolvent, and there is additional real estate owned by them and held by the plaintiff’s attachment. From a decree dismissing the bill the plaintiff appealed. The plaintiff’s bill is'based on the participation of Brooks in the plan of Cohen and Leven to defraud the plaintiff. The master has found there was no evidence that Brooks was in any way [325] connected with the dealings of the plaintiff; that he sold the land to Cohen and Leven, taking a second mortgage in payment of his equity therein; that in completing the buildings he acted in good faith, under the advice of counsel, believing it was his right so to do, and with no “intention of prejudicing the rights of the plaintiff or any other person.” This was a finding of fact; and as the evidence is not reported, the finding must stand. O’Brien v. Murphy, 189 Mass. 353. Briggs v. Sanford, 219 Mass. 572. The plaintiff also asks for an assignment of the two mortgages of $400 each, and the defendant Brooks, although he cannot be compelled to assign the mortgages, in his answer offers to make such assignment, if compensation is made for his expenses in protecting and completing the houses. Lamb v. Montague, 112 Mass. 352. Kerse v. Miller, 169 Mass. 44, 48. Fiteher v. Griffiths, 216 Mass. 174, 176. Even if the bill could be construed as a bill to redeem, the mortgagee in good faith made reasonable and just expenditures to preserve the property from decay and injury, and he should be allowed therefor. The attaching creditor cannot redeem by paying merely the amount of the mortgage. The mortgagors abandoned the undertaking; they themselves could do nothing to protect the property. The unfinished buildings were exposed to the weather, and unless cared for would deteriorate in value. The mortgagors conveyed their equity in the premises, and Brooks, in completing the structures, acted in good faith. The plaintiff apparently knew this, and that Brooks was, at his own expense, engaged in this work. It would be clearly inequitable, therefore, to permit the plaintiff to redeem without reimbursing Brooks for these legitimate expenditures. See Fletcher v. Bass River Savings Bank, 182 Mass. 5; Woodward v. Phillips, 14 Gray, 132. As the plaintiffs rights against Cohen and Leven are secured in his action at law, and as no specific relief is asked, except that Brooks be restrained from foreclosing his mortgages and ordered to assign the same, the bill properly was dismissed as to Cohen and Leven. The decree dismissing the bill should be affirmed, with costs. So ordered.