Derby v. Derby

Sanderson, J. Edward Derby died February 3, 1922, leaving a will, which has been proved and allowed, the material part of which is in the following language: "I do declare in this my last will and testament that I desire to have all my property of whatever nature it may be left to my two nieces Sarah W. and Annie H. Derby and my nephew Benjamin Derby, with the exception of the farm at Nine Acre Corner, Concord, Mass., which I recently deeded to Henry and Harvey C. Derby and which I hold a mortgage on. It is my desire that my niece Ida and my nephews Henry and Harvey C. Derby have use of said farm as long as they so desire by paying the interest on the mortgage note. After they get through with the farm it is my desire that my great nephew Benjamin Edward Derby be given the farm to do as he may deem best.” The will was executed the day before the testator’s death. This petition is brought by the administratrix with the will annexed for its construction and for instructions. From the facts admitted in the pleadings and stated in the decree it appears that the bequest to Benjamin Derby, the third named beneficiary, who was a witness to the will, became void by virtue of G. L. c. 191, § 2, and that he has relinquished his claim as beneficiary under the will. The farm referred to in the will was conveyed by the testator in 1905 to Henry Derby, who gave him in return therefor a promissory note for $4,000 signed by himself and his son, Harvey C. Derby, payable on demand and secured by a mortgage on the farm; and this mortgage and note were held by the testator at the time of his death but the note has been paid to the petitioner since the bringing of this petition. The Probate Court decided that the testator gave to the respondent, Benjamin Edward Derby, all the interest he had at his [178] death in the farm at Nine Acre Corner, namely, the mortgage thereon and the note which it secured; that inasmuch as this note had been paid to the petitioner, she was to pay the respondent, Benjamin Edward Derby, the principal sum of $4,000, with interest at the rate of four per cent per annum from the date of its payment to her, with an allowance for costs to be deducted therefrom; and that the bequest to Benjamin Derby, one of the witnesses, became void and the interest thereby given became intestate estate; and its distribution was ordered to the next of kin of the testator in the proportions stated in the decree after making certain allowances for costs from the residue. The decree properly ordered that the void legacy to Benjamin Derby be administered as intestate estate. Powers v. Codwise, 172 Mass. 425. Lyman v. Coolidge, 176 Mass. 7. Dresel v. King, 198 Mass. 546, 548. A mortgage as between the parties conveys a fee in land subject to redemption. Until foreclosure it constitutes a lien for the security of the debt or obligation, subject to which the property may be dealt with as the estate of the mortgagor. Ewer v. Hobbs, 5 Met. 1, 3. Page v. Robinson, 10 Cush. 99, 102. Kinney v. Treasurer and Receiver General, 207 Mass. 368, 370. Crowley v. Adams, 226 Mass. 582. United States Trust Co. v. Commonwealth, 245 Mass. 75, 78, 79, and cases there collected. At the time when the will was made, the testator held this mortgage to secure a note for the purchase price of the farm. It seems that at the time of the testator’s death nothing had been paid on the principal. The will shows that the testator knew he had conveyed the farm; but he may have believed that, holding a mortgage for its purchase price, he virtually controlled it and could have the legal title to it whenever he decided to foreclose the mortgage. He must have intended by the gift of the farm that Benjamin Edward Derby should receive the testator’s interest therein which was represented by a mortgage carrying with it as an incident the note which it secured-. But it is apparent that he did not wish his niece and nephews, who were occupying the farm, to be disturbed in their occupancy, so long as “they so desire by paying the interest [179] on the mortgage note”; and this provision would be carried out by construing the will to mean that Benjamin Edward Derby should not disturb their possession of the farm so long as they paid the interest on the mortgage note. To fulfil this testamentary purpose, now that the mortgage note has been paid to the petitioner, the decree properly directs that she pay Benjamin Edward Derby the principal sum received with interest at four per cent since March 1, 1924, the date of the payment to her; but there should be a further order for the payment of the interest which accrued on the mortgage note between the date of the testator’s death and March 1, 1924. The exception of the farm in the first clause, and the gift of the farm (meaning mortgage) to Benjamin Edward Derby in the third clause, and the provision in the second clause for the payment of interest on the mortgage note as the condition upon which the occupants of the farm should be permitted to have the use of it, all indicate an intention that Benjamin Edward Derby should have the mortgage and note as they were at the testator’s death, including interest from that date. The second sentence of paragraph one of the decree should be modified by directing the petitioner to pay Benjamin Edward Derby the interest received by her which had accrued on the mortgage note between the date of the testator’s death, February 3, 1922, and the date of the payment to the petitioner, March 1, 1924, in addition to the interest after March 1, 1924, already allowed by the decree; and as thus modified, the decree is affirmed; additional costs to be in the discretion of the Probate Court. Ordered accordingly.