Gilson v. Nesson

84 N.E. 854, 198 Mass. 598, 1908 Mass. LEXIS 994

• Court: Massachusetts Supreme Judicial Court
• Decided: May 20, 1908
• Status: Published

Opinion

Hammond, J.

Under the original contract the defendant was to pay the amount of the note and, in case of default, the plaintiff’s intestate, Mrs. Walker, had the right to foreclose the mortgage and apply the net proceeds to' the payment of the note, rendering the surplus, if any, to the defendant, and by the express terms of the mortgage the defendant was to pay upon demand all reasonable expenses of foreclosure.

By the terms of the new contract but little change was made. The promise contained in the defendant’s note to the plaintiff’s intestate

* to pay the foreclosure proceedings is in substance the same as that contained in his mortgage, and there was no change in that respect. The new contract also provided that any surplus after paying the note and expenses should go to the defendant. Here also there was no change. This is not a case where the debtor, still having an interest in the security, whether real or personal, agrees to surrender his interest to the creditor upon his agreeing to take the same in full payment. In the case before us there was no surrender of the defendant’s interest in the security. It is said, however, by the defendant, that he had given up his right to procure bidders. But we do not so construe the agreement. It is true that, notwithstanding the land had been attached, he had still an interest in it, but, as stated before, he had not agreed to give up his interest absolutely; and while, under the circumstances disclosed, it may properly be inferred that he did not intend to have anything more to do with the sale of his interest, and that the plaintiff’s intestate supposed that was his intention, still we do not think that such an intention and supposition were a part of the contract. The defendant had not released any right to make all reasonable efforts, either by way of procuring bidders or in any other way, to increase the sum for which the land should be sold.

In short, after the new contract the parties in all these respects stood as before. After the contract, as before, the debtor had the same interest in the land, was entitled to the surplus proceeds of the foreclosure sale, had the right in all legal ways to increase those proceeds and was under an obligation to pay the reasonable foreclosure proceedings. The only change was that the plaintiff’s intestate had agreed in a certain contingency, to wit, the failure of the net proceeds of the sale to equal the debt, to take less than the debt in full discharge of it. Such a promise is void without a sufficient consideration, and thus far no valid consideration appears.

If therefore the case stopped here, the objection that there was no consideration for the new agreement set up in defense should be sustained. But the case does not stop here. The record recites that the defendant also agreed with the plaintiff’s intestate “ to allow her to collect the rents from December 31, 1903, and . . . she did collect the rents from that day under the agreement with ” the defendant. The entry to foreclose the mortgage was not made until January 30, 1904. In the absence of any evidence to the contrary, the rents belonged to the defendant until the entry by the mortgagee ; and we construe this record to mean that the plaintiff’s intestate, by virtue of the agreement with the defendant, collected rents to which otherwise she would not have been entitled, and that this right to the rents was received as a part of the general agreement about foreclosure. If this be the proper interpretation, then it is plain that the right to collect these rents was a sufficient consideration for the agreement.

The presiding judge ruled that “ the alleged agreement of Mrs. Walker, if made, was without consideration.” We understand this to be a ruling that as matter of law upon any warrantable view of the evidence there was no valid consideration for the agreement. For reasons above stated the ruling was erroneous.

It is argued however by the plaintiff that even if the ruling was erroneous, and even if there was an accord upon a valid consideration, still, inasmuch as there is no evidence that the defendant ever paid the foreclosure expenses as he agreed to do, there has been no satisfaction ; and that accord without satisfaction is no bar to an action upon the original cause of action. Even if it be assumed that in this case not the promise but the performance of the promise to pay the reasonable foreclosure proceedings formed a part of the accord (see Bigelow v. Baldwin, 1 Gray, 245, and Field v. Aldrich, 162 Mass. 587,) still it does not appear that the case was decided by the judge upon that ground, nor that the question whether there had been satisfaction was called to his attention.

Under the circumstances we think that inasmuch as the exception of the plaintiff to the ruling made, upon which evidently was based the decision of the case, is sustained, there should be a new trial.

Exceptions sustained.

This note read as follows : “ Jan. 29.1904. Mrs. Walker Dear Madam: I will pay of the foreclosure to Mr. McLoud all expenses. Israel Nesson.”