H. B. Budding Co. v. Boddie

Williams, J.

There was a partial discussion of the issues involved in this case when it was previously before us. See 331 Mass. 267 and ante, 141. In each instance the case was retained to obtain further findings of fact by the trial judge. He now reports that before the mortgage in question was assigned to the plaintiff the bank forfeited the shares which it held as collateral security for the loan to the mortgagor without giving the notice required by G. L. c. 170, § 32. The rights and obligations of the parties to the mortgage were governed by that statute (see ante, 141) and without such notice the forfeiture was invalid. As the balance of the mortgagor’s account could be enforced against the mortgage security only after a legal forfeiture of the shares, the bank never acquired a right to foreclose the mortgage. The rights of the plaintiff assignee against the holder of the equity are no greater than those of its assignor. It was therefore error to grant the plaintiff authority to foreclose. The decree must be reversed and a decree entered dismissing the plaintiff’s bill with costs of the appeal.

So ordered.