Walter Pratt vs. Margaret A. Buckley

Massachusetts Supreme Judicial Court1900-01-03

175 Mass. 115

Summary · law.co

Holding. The transfer of the mortgage note and assignment of the mortgage to the original mortgagor after the property had been sold subject to the mortgage did not discharge the mortgage lien, and the mortgage remained enforceable against the property. Judgment affirmed.

Alice M. Pratt mortgaged property to Gould in 1893, then conveyed the property to Robinson subject to that mortgage. When the mortgagee threatened foreclosure, Pratt arranged for funds to be provided to Robinson in exchange for an assignment of the mortgage to Swain, with the intention of preserving her rights as the mortgage's assignee. Swain subsequently assigned the mortgage back to Pratt, who foreclosed and sold the property at auction. The purchaser (Pratt in this action) sought to evict the defendant, who held title from the equity of redemption holder.

The central legal issue was whether Pratt's receipt of the mortgage note and assignment after the property had been sold subject to that mortgage operated to discharge the mortgage lien. The court held that it did not. Even though Pratt was the original maker of the mortgage note, she retained the right to take an assignment of the mortgage to protect her interests and enforce it through foreclosure. The court distinguished between discharging the underlying debt and extinguishing the personal liability of the note maker—these are separate questions. Pratt's payment of funds was made to obtain the benefit of the mortgage security on land burdened by the debt, not as a voluntary satisfaction of a personal obligation.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether assignment of a mortgage and note to the original mortgagor discharged the mortgage lien
Whether the original mortgagor could take an assignment to protect her own interests and foreclose
Distinction between cancellation of the debt as a charge on land versus discharge of personal liability on the note

Procedural posture

This is a forcible entry and detainer action brought under a state statute, with the trial court's judgment in favor of the plaintiff now before the appellate court.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Knowlton, J.

This is an action of forcible entry and detainer brought under the Pub. Sts. c. 175, § 1. On March 3, 1893, Alice M. Pratt was the owner in fee of the property in dispute, and she mortgaged it to one Gould to secure the payment of $850. On March 7 of the same year she conveyed the premises to one Robinson, by a deed which recited that the land was conveyed subject to a mortgage, and which excepted the mortgage from the covenant of warranty and the covenant against incumbrances. Afterwards the mortgagee notified her that the note was unpaid, and that if it was not satisfactorily arranged at once, she should foreclose the mortgage and hold her responsible for any deficiency in the payment of the note. Ac cordingly, to protect herself, she caused the amount of the note to be furnished said Robinson on the execution of an assignment of the mortgage to one Swain, which, with the note, was delivered to her agent, she intending to preserve her rights as assignee of the mortgage. Afterwards Swain assigned the mortgage to her and she foreclosed it, and the complainant in this action purchased the property at the foreclosure sale. The defendant has a title from the holder of the equity of redemption which is subject to this mortgage. The principal question in the case is whether the transfer of the note and the assignment of the mortgage to the original mortgagor after the premises had been sold subject to the mortgage, constituted in law a discharge of the mortgage so that it could not be enforced against the property.

We think it very clear that they did not. When the estate was sold subject to the mortgage, the mortgage was left as a primary charge upon the land, although the grantee did not make herself personally liable for it by assuming it. The grantor, who was the maker of the mortgage note, was entitled to have the mortgaged property applied in payment of it. To protect her own interests she might take an assignment of the mortgage and the debt, and enforce the mortgage by a foreclosure as effectually as if she was not the maker of the note. Gibson v. Crehore, 3 Pick. 475, 482. Barker v. Parker, 4 Pick. 505. Swett v. Sherman, 109 Mass. 231. Tucker v. Crowley, 127 Mass. 400. Kinnear v. Lowell, 34 Maine, 299. Baker v. Terrell, 8 Minn. 195. Willard v. Harvey, 5 N. H. 252. The question whether the debt, considered as a foundation for the mortgage title, had been cancelled and discharged, is very different from the question whether the personal liability of the maker of the note had been terminated, so that it would not exist in favor of one to whom the mortgage and note should subsequently be transferred for a valuable consideration.

It was important to know whether the money was given by Alice M. Pratt as a voluntary payment of a debt for which she was liable, or whether it was to obtain the benefit of the mortgage security for a debt which was a charge upon the land. The facts agreed in regard to her intention in paying the money were confirmatory of the apparent effect of the debt of the parties, and were unobjectionable. Judgment affirmed.