Lincoln v. Finkelstein

Wait, J.

The note in suit was made by the defendants . in May of 1907, and was originally secured by a mortgage of real estate. It became due in 1912; and about March 26, 1915 was assigned to the plaintiff by the payee, her brother. A foreclosure sale of-the mortgaged property made in 1917 did not realize enough to satisfy it. The writ is dated July 26, 1917.

The makers parted with their equity of redemption in the real estate before the maturity of the note. There was no evidence to show whether in this conveyance their grantee assumed and agreed to pay the note. They defended upon the ground that, without their knowledge or consent, the holder of the note afterward extended the mortgage, or agreed with the then owner of the equity to delay foreclosure.

After a verdict for the plaintiff, they contend that there was error in the exclusion of evidence; in the refusal to direct a verdict in their favor; in the denial of certain requests for instructions; and in parts of the charge to the jury.

There was no error in excluding testimony in regard to the price paid by the defendants for the property in 1907, and to its value at the maturity of the note in 1912. No claim was made of any fraud; and there was no offer of evidence of negligence in the sale. The evidence was immaterial to any issue in the trial.

There was no error in the refusal to direct a verdict for the defendants. The plaintiff produced the note and proved its execution. The defences presented were affirmative. The burden of proving them was on the defendants. The evidence was conflicting. Obviously, no verdict could be directed. Eddy v. Johnston, 250 Mass. 299, 301.

There was evidence which, if believed, would justify find*491ings that the original payee in 1912 received a bonus of $100 from the owner of the equity to extend the mortgage for three years, and again, after the three years, obtained another $100 as a bonus from a new owner of the premises on an agreement to extend the mortgage for three years if, in addition, the owner paid $250 of the principal. The plaintiff testified that she received $250 on the principal in 1915 and 1916. These receipts were indorsed on the note in her handwriting. She testified that they were transmitted to her by her brother and that she supposed they were made by the defendants. The note was in the hands of the brother until his death in 1921, and until that time he transacted all business for her in regard to it. She testified that “he acted as her agent in relation to the question of the payments and extensions of the mortgage and everything else”; that he foreclosed the mortgage in her name. A son of the defendants, a lawyer, testified that in 1917 the brother sent for him, and said interest was unpaid, and that he had not communicated with the defendants before since they sold the property, because interest was being paid promptly.

At the close of the evidence, the defendants presented six requests for rulings. They cannot complain of the disposition made of them. The judge instructed the jury that if, in fact, an extension was granted by one with authority to grant it the defendants were discharged of liability. Knowledge by the defendants was thus immaterial; and the first request may be disregarded. The second and third requests were given in substance. The fourth, fifth and sixth requests were immaterial upon the issues presented by the pleadings and at the trial, so far as the bill of exceptions discloses.

The requests for instructions presented orally at the conclusion of the charge were presented too late. Rule 44, Superior Court, (1923). No good exception lies to the refusal to give them.

The defendants also claimed exceptions to the instructions actually given in regard to the authority of an “agent to bind his principal in matter of extension.” It is open to serious question whether this exception called the attention *492of the judge to the subject matter of the contention which has been addressed to us. The instructions actually given cover with sufficient fullness and accuracy the matter of general authority of an agent, and of ratification by a principal who is ignorant of the facts of the agent’s action but who accepts and acts upon the result. From this point of view there was no reversible error.

Whether the charge was equally unassailable from a different point of view remains to consider. The judge instructed the jury “as matter of law, that it does not appear that she [the plaintiff] gave her brother as her agent authority to extend this mortgage, or do anything which would prohibit her from foreclosing if it was overdue, if she so desired, and therefore you are to disregard and treat as of no consequence any testimony as to what Mr. Lincoln [the payee] agreed after March 25, 1915, because at that time he was only an agent, and he did not have the right to bind his principal ... by accepting a hundred dollars, or any other amount, as extension of this mortgage, which would prevent foreclosure and so release the makers. If you find that while Lincoln held the record title before March 25, 1915, he had agreed in consideration of a hundred dollars not to foreclose this property, then I say to you as matter of law these defendants are discharged.” This last sentence states the law too favorably for the defendants. North End Savings Bank v. Snow, 197 Mass. 339. Codman v. Deland, 231 Mass. 344. However, they do not attack this part of the instructions. They cannot successfully. They have not been harmed.

The judge, after a colloquy following the charge, gave further instructions to the effect that authority to an agent to collect interest due on a mortgage does not confer authority to extend the mortgage. That the agent’s act in extending it might be ratified by the principal, and if the plaintiff ratified, her brother’s act, if in fact he accepted a bonus and extended the mortgage, she would be bound; that accepting interest and principal on the note would not be accepting a bonus;, “and I say again . . . that Mr. Lincoln did not have authority on this testimony to bind his sister, unless she has *493ratified his act in some way, and, of course, the receipt and indorsement of interest and principal would not be a ratification. ... in order to ratify the act of your agent you must know what he has done, and you can’t have a ratification of an act unless you were first informed as to what has been done.” Exception was saved to this last statement.

In the situation in which the words were used, they state the law correctly. Authority to collect interest and principal does not include by implication authority to extend time of payment or to limit use of collateral. Burnham v. Wilson, 207 Mass. 378. Murphy v. Barnard, 162 Mass. 72. Hutchings v. Munger, 41 N. Y. 155.

The receipt of interest or principal is not by implication a ratification of the means taken by an agent to obtain either, when the principal is ignorant in regard thereto. Combs v. Scott, 12 Allen, 493. Manning v. Leland, 153 Mass. 510. Sears v. Corr Manuf. Co. 242 Mass. 395.

The defendants were not prejudiced by instructions that they were discharged, if either the payee while holder of the note extended time or delayed foreclosure, or the plaintiff, after becoming the holder, authorized such extension or delay granted by the agent. But if the jury were given to understand that, as matter of law, there was no evidence in the case from which original authority in the agent to extend time or delay enforcement of the security could be inferred, there was error. The testimony of the plaintiff on cross-examination, that her brother “acted as her agent in relation to the question of the payments and extensions of the mortgage and everything else,” taken with the other evidence, will sustain a legitimate inference that at all times the brother had full authority to extend time or delay enforcement as well as to receive payments of interest or principal.

We conclude, however, that the defendants did not save any exception to this aspect of the charge. Barker v. Baring, 177 Mass. 389. Bock v. Indian Orchard Mills, 142 Mass. 522. Chestnut v. Sawyer, 235 Mass. 46.

We find no error to which exception was saved; and, as a result, the order will be

Exceptions overruled.