Gentile Bros. Corp. v. Rowena Homes, Inc.

227 N.E.2d 338, 352 Mass. 584, 1967 Mass. LEXIS 853
CourtMassachusetts Supreme Judicial Court
DecidedJune 6, 1967
StatusPublished
Cited by21 cases

This text of 227 N.E.2d 338 (Gentile Bros. Corp. v. Rowena Homes, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gentile Bros. Corp. v. Rowena Homes, Inc., 227 N.E.2d 338, 352 Mass. 584, 1967 Mass. LEXIS 853 (Mass. 1967).

Opinion

*585 Kirk, J.

Gentile Bros., Corp. (Gentile Bros.) brought this bill in equity for the specific performance of a written purchase and sale agreement whereby Gentile Bros, agreed to buy and Rowena Homes, Inc., a Rhode Island corporation (Rowena), agreed to sell certain real estate on Sea Street in Hyannis, Massachusetts. The equity suit was tried with two actions at law. 2 No review of the latter has been sought. In the equity suit the final decree ordered the Halls to reconvey the land to Rowena and ordered Rowena, in turn, to convey the land to Gentile Bros. The Halls have appealed.

The judge made an extensive report of material facts which sets out the complex series of transactions leading to the present litigation. We summarize them in the following paragraphs under point 1.

1. Rowena was incorporated sometime prior to 1962. On August 3, 1962, Rowena bought the Hyannis property, which consisted of eleven lots with buildings. The property was subject to a $20,000 first mortgage held by the Sandwich Co-operative Bank. Rowena assumed the first mortgage and, on the date of purchase, executed a second mortgage to one Sherman. On August 22,1963, the second mortgage was assigned to Hall for $7,000. Hall controlled a corporation, Allstates Mortgage Corp. which lent money secured by second mortgages. The second mortgage was then in default, no payments having been made by Rowena since August 3, 1962. Foreclosure proceedings were imminent. Hall has never taken any steps to foreclose against Rowena. ■ In December, 1963, a $900 attachment was made on the property arising from a claim against Rowena by Automatic Washers, Inc. The “5200 Trust” also made a $3,000 real estate attachment on the same property based on a claim against Rowena Homes, Inc. of Massachusetts, *586 which, like the Rhode Island corporation, was owned by Aubin.

Early in March, 1964, Daniel Gentile (Gentile), president of Gentile Bros, and acting on behalf of Gentile Bros, at all times hereinafter mentioned, became interested in purchasing the Hyannis property. On March 14, a meeting was held by Gentile, Hall and Simcoe. A preliminary agreement was made between Rowena and Gentile Bros. Hall proposed to finance the purchase by a mortgage carrying interest at the rate of 1% a month. Gentile instead applied to the Sandwich Co-operative Bank for a purchase money mortgage.' The application was approved on April 21, subject to a title search by the bank’s attorney, Mr. Swift.

On May 7, 1964, a purchase and sale agreement, drawn by Mr. Gack, the attorney for Gentile Bros., was executed by Rowena and Gentile Bros. The agreement provided that the premises were to.be conveyed on or before June 5, 1964, “by a good and sufficient Quitclaim deed of the Seller, conveying a good and clear title to the same free from all encumbrances, excepting restrictions of record, if any there be, and zoning by-laws. ... If the Seller shall be unable to give title or to make conveyances as above stipulated any payments made under this agreement shall be refunded, and all other obligations of all parties hereto shall cease.” It stated that “Time is of the essence of this agreement.” On the date that the agreement was signed, Aubin told Simcoe that Hall would take care of discharging, the attachments made by Automatic Washers, Inc. and ‘ ‘ 5200 Trust. ’ ’ Gentile drew a check for $3,400 payable1 to S & S Real Estate Associates, and gave it to Simcoe to hold in escrow. A few days later Gentile substituted a new check in the amount of $3,500.

On May 22, 1964, Hall, who had received a copy of the purchase and sale agreement, called Mr. Swift. Hall knew that Gentile had applied to the bank for mortgage financing and Hall wished to discuss the two attachments. Mr. Swift advised Hall that the “5200 Trust” attachment, although based on a claim against Rowena Homes, Inci'of - Massachu *587 setts, was a cloud on the title of the Hyannis property of Bowena. Mr. Swift gave the same opinion to the bank prior to May 27. On May 27, Hall told Mr. Swift that he and Aubin were going to have an attorney draw up a deed and take care of discharging the mortgages and the two attachments.

On the following day, as the result of a conversation between Hall and Aubin, Bowena conveyed the Hyannis property to Mrs. Hall. The action was taken without the knowledge of either Mr. Swift or Gentile. Hall drafted the deed to his wife and the vote of Bowena’s board of directors authorizing the conveyance to her. The consideration for the' deed was $400, allegedly representing a loan from Hall to Bowena, but in reality a personal loan from Hall to Aubin.

On June 2, 1964, Hall advised Automatic Washers, Inc. that its attachment would be discharged on June 5 by means of the mortgage financing. On the same day, however, Mr. Swift advised Hall that he would not be at the Barnstable registry of deeds on June 5 and that papers would not be passed on that date because of the two attachments. On June 4, Mr. Swift told Gentile that the two attachments constituted a cloud on the title and that papers would not be passed at the registry on June 5. " This was the first time that Daniel Gentile knew of the two attachments.” Gentile also learned from Aubin on June 4 that he would not be at the registry on the following day because he was going to New Hampshire.

As a result of these conversations, Gentile did not appear at the registry on June 5,1964. Simcoe, who had also been advised that papers would not be passed, was not at the registry. Hall, however, did appear at the registry about noon. He did not have an executed discharge of either the Automatic Washer’s Inc. or the “5200 Trust” attachment. Nor did he have the required sum to pay off the Sandwich Co-operative Bank’s first mortgage. He had no intention of doing so, and his insistence at the trial that the agreement'called for a1 cash payment of the full purchase price *588 on June 5 was untenable. He was representing himself and. Bowena, and knew that Bowena was in no position to discharge the mortgage. “Hall’s presence at the Barn-stable Begistry of Deeds on June 5, 1964, was a sham.” Although he is not a lawyer, Hall is “very well experienced and knowledgeable with respect to matters of conveyancing and Begistry of Deeds procedure.”

Subsequently, on June 8, 1964, a meeting was held at Bowena’s office. Hall, Gentile, Mr. Gack, Simcoe and Aubin were present. Gentile learned for the first time of the conveyance by Bowena to Mrs. Hall. Hall told Gentile that the reason for the conveyance was to protect Bowena from further attachments in order to facilitate conveyance to Gentile Bros, on June 5, 1964. He suggested that the $3,500 deposit held in escrow by Simcoe be used to pay off the two attachments which all parties believed to be valid and to be a hindrance to a consummation of the sale. Hall told Simcoe to turn the $3,500 check over to Mr. Gack for this purpose. The meeting culminated in an oral agreement by all the parties that the $3,500 deposit would be used to discharge the two attachments in order to satisfy the Sandwich Co-operative Bank, and that the contemplated sale would take place on June 11, 1964. Hall, in Aubin’s presence, said there would be no further problem in passing title on that date.

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Bluebook (online)
227 N.E.2d 338, 352 Mass. 584, 1967 Mass. LEXIS 853, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gentile-bros-corp-v-rowena-homes-inc-mass-1967.