Borucinski v. Hampden Real Estate Trust

Massachusetts Supreme Judicial Court
Borucinski v. Hampden Real Estate Trust, 210 Mass. 99 (Mass. 1911)
96 N.E. 66; 1911 Mass. LEXIS 1009
Hammond

Borucinski v. Hampden Real Estate Trust

Opinion of the Court

Hammond, J.

This is an action on a surety bond which guaranteed the performance by the defendant the Hampden Real Estate Trust, hereinafter called the real estate trust, of a building agreement between it and the plaintiff. The ease is before us upon the exceptions of the defendant the American Surety Company, hereinafter called the defendant, which executed the bond only as a surety.

The defendant contends that by the fair construction of the building agreement no cash was to be paid nor was the mortgage to be delivered until the building was fully completed; and that by the delivery of cash and the mortgage before that time the contract was departed from and the fifteen per cent clause of the bond violated, and hence the defendant was thereby released from all obligation on the bond.

We do not adopt the defendant’s construction of the contract. While it may be a general rule that the consideration for work to be done is not due until the work is done, still this rule is not applicable where there is anything in the agreement to the contrary. And this building agreement by fair implication does contain something to the contrary. The plaintiff was to pay $6,500, of which $1,000 was to be paid in cash and $5,500 was to be lent by the real estate trust on a mortgage. The agreement was something more than a building contract. It contained a clause under which the real estate trust was to lend the plaintiff a portion of the cost of the building. The $1,000 was to be paid in cash “ satisfactory to both Borucinski and the ” real estate trust. While it may be true, as contended by the defendant, that this clause refers to the kind of property which should be regarded as cash, still, considering that usually the term cash implies prompt payment, we think that the phrase as used here has reference also to the time of the payment and that a payment at any time satisfactory to the parties, even before the completion of the work, could not be regarded as a departure from the contract.

It is also fairly to be implied from the contract that the mortgage when considered in connection with the circumstances was *104to be given before the completion of the building. The $5,500 is described in the agreement as the sum to be lent to the plaintiff. It evidently was regarded by the parties as security for the money to be lent. Before the close of the work the property might be attached or other incumbrances might be placed upon it so that the mortgage would fail to secure the lender as such. Moreover the work was to be completed on or before October 1, 1909, and the agreement provided that no interest was to be charged on the mortgage until October 1, 1909. Under all the circumstances we think it fairly appears from the building agreement that it was within the contemplation of the parties that not as payment but for the sake of security for the money to be lent the mortgage should be given at any reasonable time, even before the work was done. The judge ruled as requested by the defendant that the fifteen per cent clause in the bond “ was material for the protection for the surety, and any violation of this provision by the plaintiff, released the surety.” Under this ruling the judge must have found that the mortgage was not then given as payment for work done but as security for the money lent or to be lent. In giving it for this purpose the plaintiff is not shown to have departed from the contract. The fact that the real estate trust assigned the mortgage is not material in this case. ,

The $100 appears by the written agreement to have been paid for the plan, and the judge under the ruling above named must have found that the cash subsequently paid to the amount of $900 was not in excess of eighty-five per cent of the amount due, and hence was not paid in violation of the fifteen per cent clause of the bond. This finding is supported by the evidence. There appears no error in the manner in which the court dealt with the defendant’s requests.

Exceptions overruled.

Reference

Full Case Name
Vincent Borucinski v. Hampden Real Estate Trust & another
Status
Published