JACOB FOTERNICK & another vs. PAUL B. WATSON.

Suffolk. March 17, 18, 1903. - October 19, 1903.

Present: KNOWLTON, C. J., BARKER, HAMMOND, LORING, & BRALEY, JJ.

Contract, Performance and breach, Construction.

In an action for the breach of an executory contract in writing in which no day of performance is named, the plaintiff, if he was not in default and was ready to perform, may recover without showing performance on his part, if he shows that the defendant left the Commonwealth in order to evade a tender of performance, or that the defendant wholly had repudiated the contract.

In an action for an alleged breach of an agreement in writing, it appeared, that the plaintiff, a builder, wishing to purchase a parcel of land on which was a mortgage for $10,800 and to build on it certain houses, applied to the defendant for a construction loan, that the defendant agreed to lend the plaintiff $36,000 on the houses to be erected, $20,000 when the houses, except the front walls, were built to the second floor, and the remaining $16,000 in instalments as the houses reached specified stages of completion, and the plaintiff agreed to build forthwith the houses on the land, and to give the defendant forthwith "a mortgage on said land which shall be a first mortgage when the first payment is called for", except that the defendant "may, if he desires, allow the present first mortgage of $10,800 with interest at four per cent per annum to remain on the land, provided he will assume same and pay interest thereon from date of first payment to us, which shall then be $9,200." The plaintiff purchased the land subject to the mortgage named, giving a second mortgage of $7,800 for the purchase money. He then gave to the defendant a mortgage for $36,000 on the property, and constructed the houses to the stage required for the first payment, when the alleged breach of the contract by the defendant occurred. Held, that the parties contemplated the payment of the pre-existing mortgages out of the first payment of $20,000 by the defendant, and that the plaintiff was entitled to look to that payment to make the mortgage for $36,000 a first mortgage.

CONTRACT for alleged breach of a contract in writing. Writ dated November 4, 1899.

In the Superior Court Stevens, J. made the ruling stated in the opinion. The jury returned a verdict for the defendant; and the plaintiffs alleged exceptions.

A. Bon, for the plaintiffs.

R. Homans, (S. L. Whipple with him,) for the defendant. LORING, J. In this case the jury were warranted in finding the following facts: The plaintiff Foternick is a builder by

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trade. He wished to construct some houses on a parcel of land on which there was a mortgage for $10,800. Before buying the land or otherwise entering upon the undertaking he applied to the defendant for what is generally known as a construction loan, and on April 13, 1899, Foternick and the plaintiff Lavinsky, in whose name Foternick proposed to take title as a matter of convenience, entered into a written contract with the defendant, whereby the defendant agreed to lend the plaintiffs $36,000 "on first mortgage on five brick houses hereinafter described, to be erected" on the parcel of land in question, as follows: $20,000 when cellars and brick walls, except front walls, are completed to level of second floor and second floor is on," and the remaining $16,000 in specified instalments as the houses reached specified stages of completion; and the plaintiffs agreed to build on said land forthwith five brick houses as there described, and also "to give said Watson forthwith a mortgage on said land which shall be a first mortgage when the first payment is called for, except that said Watson may, if he desires, allow the present first mortgage of ten thousand eight hundred dollars with interest at four per cent per annum to remain on the land, provided he will assume same and pay interest thereon from date of first payment to us, which shall then be nine thousand two hundred dollars; said mortgage to Watson shall precede all labor on the premises and all contracts for labor and material, of which fact we agree to give said Watson satisfactory evidence when the first payment is called for." The $36,000 was to be repaid in six months from April 13, with interest on the whole $36,000 at the rate of twelve per cent per annum from April 13. The defendant, who is a lawyer, was employed by the plaintiffs to examine the title. One half the lot was conveyed to the plaintiff Lavinsky on April 26, and the other half on June 7, both conveyances being subject to the mortgage for $10,800. The purchase money was $7,800, for which mortgages were given back, one on April 26 and the other on June 7, and what were then third mortgages conditioned for the payment of $36,000 were executed at the same time to the defendant, to wit, on April 26 and June 7. Although there were two mortgages conditioned to pay $7,800 and two mortgages for $36,000, there was but one sum of $7,800 and one sum of $36,000 to be paid.

The plaintiff Foternick began work immediately after June 7, when he first got title to the whole interest in the premises.

The jury would also have been warranted in finding that on Monday, August 7, or Tuesday, August 8, the construction of the five brick houses had so far progressed that the second floors were on, and the plaintiff Foternick went to the defendant's office and told him that he was ready or would be ready in a few days for the first payment, and asked the defendant to come out and inspect the buildings; and that the defendant promised to do so on the following Thursday or Friday at the latest. There was also evidence that the plaintiff Foternick waited at the buildings for the defendant on Thursday and on Friday until after the hour of the day had passed at which the defendant had been in the habit of visiting the buildings when he had been there before; and thereupon the plaintiff Foternick went to the defendant's office and was told that the defendant had gone on his vacation. The plaintiff Foternick then went to his own office and found the following letter from the defendant, dated August 10: "Dear Sir, I have received notice from the Building Commissioner that complaint has been made by the Inspector against your buildings at the corner of Columbus Av. & Davenport St., on which I hold mortgage. I am not willing to make loans on buildings that are not satisfactory to the Inspector. As you may perhaps wish to place the loan with others who do not make this stipulation in their contracts, I have this day discharged my mortgages on the property." He also found a letter signed by the inspector of buildings notifying him "that a violation of Chapter 419 of the Acts of 1892 exists, to wit, Sect. 33-Light hard brick used for outside work," and that he was required "to remove said violation at once." It appeared that the inspector assigned to the plaintiffs' buildings by the building commissioner was one Follansbee. The plaintiff Foternick called at the building department to see Follansbee on Friday, August 11, and on Monday, August 14, and on the second day found that Follansbee also had gone away on his vacation. He then was referred at the building department to a Captain Barry, who was a supervisor of construction to whom an appeal lay from Follansbee's decision. On Wednesday, August 16, Captain Barry inspected the buildings. Captain

Barry was called as a witness by the plaintiffs. He testified that on August 16 he found that there were in fact no light hard bricks in the houses and that there was no violation of the law; and "closed" the complaint and indorsed a statement to that effect on the notice to the plaintiffs. He further testified that his decision was final unless an appeal was taken from it to the building commissioner, and in this case there was no appeal; and that by the practice of the building department the notice of violation is sent out on the report of the inspector, by filling in a blank signed in advance by the building commissioner. It also appeared that Follansbee in the following May indorsed on his original report as to the violation "that the complaint has been removed. Cost $15." But there was no evidence that any of the brick which was in the buildings in August had ever been removed. There was evidence that what was meant by "Cost $15," was that the removing of the brick which he reported was a violation of the building act and substituting proper brick would have cost $15.

It also appeared that the mortgages for $36,000 were in fact discharged by the defendant by a release executed August 10, 1899, and put on record in the registry of deeds by the defendant on that day.

There was evidence that the plaintiff Foternick, on learning that the defendant had gone away, tried to get the money necessary to carry him through from other persons, and failing to do so lost all the money he had put into the undertaking, by a foreclosure of the mortgages for $7,800 on September 13. These mortgages became due on May 13. The defendant went away on his vacation August 11, and was away "about" a month.

After the plaintiffs had rested, and while the defendant was putting in his evidence and before he had rested, the defendant requested the presiding judge to rule that by the true construction of the clause of the contract requiring the mortgage for $36,000 to be a first mortgage "when the first payment is called for," the plaintiffs were not entitled to any part of the $36,000 in order to pay off the prior mortgages of $10,800 and $7,800, or either of them, but had to make the $36,000 mortgage a first mortgage when they called for the $36,000 and before the defendant was bound to pay over any part of the $36,000, and

as there was no evidence that the first mortgage for $10,800 and the second mortgage for $7,800, or either of them, had been discharged before this action was begun, the plaintiffs could not recover. The judge so ruled, and then directed the jury on all the evidence to return a verdict for the defendant, to which the plaintiffs excepted.

In ruling that the plaintiffs had not made out a case because the $7,800 mortgage had not been discharged before the date of the writ the presiding judge seems to have disposed of the case on the footing that the plaintiff Foternick had called for the $20,000 and not on the footing that he notified the defendant that he should call for it in a few days. The jury were warranted in finding the latter to be the fact. If they did so find, the plaintiffs would have made out their case without showing performance by them in making the mortgage for $36,000 a first mortgage, on showing that the conduct of the defendant had excused them from performing their part of the contract. In this view of the case the construction of the contract does not seem to be material.

We are of opinion that the plaintiffs had a right to go to the jury on the ground that the decision made by Follansbee, acting for the building commissioner, that there was a violation of St. 1892, c. 419, in using light hard brick, was reversed on appeal, and that the defendant had gone out of the Commonwealth to evade a tender under the contract and thereby the plaintiffs were excused from notifying the defendant of the fact that Follansbee's decision had been reversed, and from tendering performance.

We assume for the purposes of this discussion that the decision of the building department on the question of fact is final, although no reference has been made to any statute making it so.

There was evidence that the defect, if there was one, could be cured at an expense of $15, and the fact that the defendant saw Follansbee about the matter twice between Monday, August 7, and Friday, August 11, warranted the jury in finding that he knew the character of the defect. The fact that the defendant knew that the defect was one which, if it existed at all, could be cured at this trifling expense, taken in connection with the