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142 Mass. 545

Taft v. Stoddard

Massachusetts Supreme Judicial Court

Decided October 22, 1886

Massachusetts Supreme Judicial Court · decided 1886-10-22

<p>In 1870, A., the owner of land, mortgaged it to D., the condition of the mortgage being the payment of a certain sum of money, on demand, with interest semiannually, and to secure and save the mortgagee harmless for all indorsements, liabilities, expenses, and services, on account of the mortgagor. In 1878, A. mortgaged a portion of the same land to H., by a deed which referred to the mortgage to D. In 1880, D. assigned the first mortgage to S., the consideration expressed being $1. On a bill in equity, brought, in 1884, by H. against S., to redeem the land from the first mortgage, it appeared that, in 1867, the firm of which A. was a member executed an assignment for the benefit of their creditors to S. and others, as trustees, by the terms of which certain property (in which that subsequently mortgaged by A. was not included) was to be sold, and the proceeds, after deducting the disbursements, expenses, and charges of the trustees, were to be divided ratably among the creditors of the firm. S. was permitted to testify, against the objection of H., that, at the time of the execution of the first mortgage it was to be held as security for the payment to S. for all the services he had rendered, or should thereafter render, to A. as trustee under the assignment of 1867, or as his attorney, and also for all advances and payments made or to be made, or liabilities incurred, by S. in behalf of A.; that D. did not make any advances to A., or incur any liability for him; and that these facts were all known to H. when he took the second mortgage. The judge found that this testimony was true, and ordered a decree to be entered that S. was entitled to hold the first mortgage as security for money paid out to the creditors of the firm of which A. was a member beyond what he had received from the assets of the firm, for money advanced to A., and for money paid one of his co-trustees for his services, with interest on these amounts; and that he was also entitled to hold it as security for money due him as trustee, or as attorney, without interest, no demand having been made; but that S. was not entitled to be indemnified against any claim of creditors of the firm, the judge having found that S. had fully executed the trust, although there was evidence that a creditor had recently made a demand upon him. Held, that the decree was right.</p>

Relies on Upton v. National Bank of South Reading

Good law ✅— No negative treatment on recordhow we know

Decided 1886-10-22

How this case has been cited

Cited by 8 later decisions — most recently October 1978

8 state decisions

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Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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Morton, C. J.

¶1This is a bill in equity, brought by the administrator of the estate of a second mortgagee to redeem land from a first mortgage. The first mortgage was originally given by Ezekiel B. Stoddard to one Dickinson, and was afterwards assigned to the defendant. It was, in form, a mortgage to secure the payment of a note for $10,000. It was proved by oral testimony, at the hearing, that it was, in fact, given for the benefit of the defendant, to secure him for advances which he had made, and which he might thereafter make, for the benefit of the mortgagor in the settlement of his affairs, and for the services rendered by the defendant in such settlement. Dickinson held the mortgage, until he assigned it, in trust for the defendant. Breen v. Seward, 11 Gray, 118. We cannot see that the rights and equities of the parties in this suit are different from what they would have been if the mortgage had been" originally made directly to the defendant.

¶2*550It has been repeatedly held by this court, that, on a bill to redeem by a mortgagor, it is competent for the mortgagee to show by oral testimony what was the real debt or obligation which the mortgage was given to secure, and even to show that, after it was given, the parties agreed that it should be held as security for a new and different debt. In such cases, a court of equity will not aid a mortgagor, or permit him to redeem, until he does equity, and pays the debt intended to be secured by the mortgage, according to the agreement and real equities between the parties. Joslyn v. Wyman, 5 Allen, 62. Stone v. Lane, 10 Allen, 74. Upton v. South Reading Bank, 120 Mass. 153. The same principle is applied when a bill to redeem is brought by one who has taken a conveyance from the mortgagor with a knowledge of the facts. Joslyn v. Wyman, ubi supra. Stone v. Lane, ubi supra.

¶3In the case at bar, the plaintiff has no higher equity than that of the mortgagor. The second mortgage is expressly made subject to the first, and, when Whitman Holbrook, the plaintiff’s intestate, took his mortgage, he was informed of the origin, character, and purposes of the first mortgage. He took it with a knowledge of all the facts. His administrator stands in no better position than the mortgagor ; and, in this suit, the defendant is entitled to hold his mortgage as security for the payment of his services and advances, as found by the presiding justice of the Superior Court.

¶4As the defendant never made any demand for the sums claimed for his services, we see no error in the ruling of the Superior Court, that he is not entitled to interest thereon.

¶5The Superior Court has found that the defendant has fully executed the trust assumed by him under the indenture of 1867, and that he is not now under any liability to any of the creditors of E. B. Stoddard and Company under said indenture. It follows that the defendant cannot hold his mortgage as security for an alleged liability which does not exist. The rulings of the Superior Court were correct.

¶6 Decree affirmed.

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