Massachusetts Appeals Court -- February 28, 2012
Facts: This is an appeal from a grant of summary judgment by the Land Court invalidating a mortgage due to a lack of material terms. A borrower executed a first mortgage in favor of First Eastern Mortgage Corporation to finance her purchase of property. Over the course of eighteen years, she refinanced the first mortgage, repeatedly discharging it and replacing it with another, until finally it was assigned to the plaintiff, JP Morgan Chase (a.k.a. Wells Fargo). She also executed a second mortgage on the property for $15,443 in favor of one of the sellers who subsequently assigned it to the Ford Realty Trust, of which the Defendant, Casarano is the trustee.
The note relating to the second mortgage was lost and the Plaintiffs filed for declaratory judgment in the Land Court seeking to quiet title and establish the primacy of their first mortgage. The judge found evidence from the second mortgage document that the note required monthly payments of $100 and that the debt was subject to an interest rate of ten percent per annum. However, the mortgage document itself lacked evidence of additional terms such as the payment schedule, default terms, assignability, whether the note is under seal, whether the instrument is a demand or term note and, if the latter, the maturity date.
Issue: Whether the terms of the mortgage document were sufficient to make the missing mortgage note enforceable.
No. The Land Court judge correctly concluded that even if the terms of the missing note were deemed to support a cause of action, there is no possibility of ascertaining whether the statute of limitations would render it unenforceable. While an existing note and mortgage are to be read together, the unenforceability of a missing note is certainly not remedied by importing terms, themselves insufficient, from the mortgage. For the same reason, the mortgage document itself cannot constitute a valid enforceable contract, because the terms of the mortgage are equally inadequate in the mortgage taken alone. Judgment affirmed. (HG)