Finkelstein v. Morse , 226 Mass. 368 ( 1917 )

Carroll, J.

On September 1, 1915, William F. Brooks conveyed to Charles Cohen and Louis Leven, hereafter called the contractors, a parcel of land; on the same day the contractors gave the defendant a mortgage on lots A and B, these lots being a part of the premises conveyed by Brooks. With each mortgage there was a contraction loan agreement. According to these agreements, the fifth payment on Lot A, amounting to $800, was to become due “when floors are laid, doors hung, stairs built, and plumbing is completed;” and the fourth payment on Lot B, amounting to $600, was to be paid “when standing finish is on and windows in.” On the same day the contractors gave to Brooks, the grantor, mortgages of $400 each on lots A and B, subject to the mortgage to the defendant.

On January 3, 1916, Brooks entered on the premises for the purpose of foreclosure, and in February published notices of sale under the power in the mortgage. On January 12 the contractors conveyed their equity in the lots to one Laffey for the benefit of Brooks, and on January 15 also conveyed to him, for Brooks’s benefit, their rights under the construction loan contract, except the fourth payment on Lot B and the fifth payment on Lot A, which had already been assigned to the plaintiff. To this agreement the defendant consented.

On January 1, 1916, when the contractors abandoned the work, the fifth payment on Lot A and the fourth payment on Lot B were not due. At this time the buildings were exposed to the weather, there was ice in the cellars; and this also was true on January 15, when the assignment to Laffey was made. At the date of the writ all this work had been done and the buildings were subsequently completed by Brooks. At the time of the trial the mortgage had not been foreclosed because the mortgagee was restrained by an order under a bill in equity, brought by a creditor of the contractors.

The plaintiff brings this action to recover the fifth payment on Lot A and the fourth payment on Lot B, under the construction loan agreement. In the Superior Court the verdict was for the plaintiff.

When the contractors abandoned the work, the fourth and fifth payments were not due. Their agreement with the defendant was to build the houses, and the payments were conditional on their performance of the contract. See Buttrick Lumber Co. v. Collins, 202 Mass. 413.

When the contractors assigned to Laffey for the benefit of Brooks, they had already conveyed their interest in the land for his benefit. Brooks was then the owner of the estate, what he did in finishing the work and completing the contract was done entirely for his own benefit and there is nothing to show that it was done in their interest. Nor does it appear that he was under any agreement or obligation to complete the contract for their profit and advantage.

The contractors, therefore, would have no right to recover against Morse for the fourth and fifth payments, because they did not do the work which would entitle them to the stun stated; and the plaintiff, as their assignee, has no greater rights against the defendant than they themselves had. The contractors gave the assignment of these payments to the plaintiff on December 3, 1915. They had not then conveyed their equity nor assigned the construction contract to Brooks, and in the defendant’s assent to the instrument of assignment, he agreed to pay the sums stated when the contractors “shall be entitled to the same under their agreement with me.” The plaintiff, therefore, cannot recover.

The plaintiff relies on Staples v. Somerville, 176 Mass. 237. In that case the assignee of a building contract, at his own expense, completed the structure and was permitted to recover for the work and material furnished after the date of the assignment. In the case at bar, after the contractors had abandoned the buildings, no work was done by the plaintiff or on his behalf.

The plaintiff further argues that in finishing the houses Brooks and Laffey exercised the rights of the contractors and preserved them. We discover nothing in the record to support this contention. On the other hand, when the contractors withdrew they desired Brooks to protect his mortgage, and all that was done by him was for his own profit. There is nothing to show that in the completion of the houses by Brooks, he was acting under the construction agreement, nor does it appear that any payments were made to him under this agreement.

Judgment is to be entered for the defendant.

So ordered.