ECCLESIASTES 3:1 vs. HERBERT S. HOFFMAN and MARTIN B. HOFFMAN.

In Case No. 82555 plaintiffs filed a civil action in the nature of a writ of entry pursuant to G. L. c. 237 claiming that it was seized in fee simple of two parcels of land in Cambridge, with the buildings thereon, located at 12-18 Forest Street and 17-19 Forest Street; that defendants have disseized the plaintiff, and are unlawfully in possession thereof and unlawfully collecting rents therefor. Plaintiff seeks an order for its immediate possession of the premises.

In Case No. 84258 plaintiffs filed an action for a declaratory judgment under the provisions of G. L. c. 231A seeking a declaration that it is the owner of a freehold estate, based on the remainder of a 100 year leasehold, acquired by plaintiffs by Sheriff's deed of the property located at 12-19 Forest Street, Cambridge on August 6, 1975.

Defendants Estelle Mitchell, Forest Street Housing, Inc., Martin H. Alpert, Trustee of Forest Realty Trust, and A. Amico, have filed neither appearances nor answers in the case. An application for default judgment against these defendants was filed January 30, 1979 and is hereby allowed.

Defendants Hoffman and Cambridge Savings Bank filed answers in each case asserting the same defenses, namely, what in effect is a general denial, the Statute of Frauds, laches, the denial that there ever was a lease in plaintiff upon which to base his title, foreclosure of the mortgage by the Bank and unclean lands.

A motion to consolidate the two cases was brought by defendants Cambridge Savings Bank, Herbert Hoffman and Martin Hoffman on July 17, 1978. Since the two cases arise out of one set of facts and involve common questions of law, pursuant to Rule 42(a) of the Massachusetts Rules of Civil Procedure, the motion to consolidate is allowed.

Plaintiff and Defendants each filed motions for summary judgments in both cases. These motions were accompanied by affidavits and exhibits attached thereto. The plaintiff's motion to strike the defendants' affidavits was denied by the Court at the hearing held on the parties' motions for summary judgment.

Based on the pleadings, the affidavits and the attached exhibits the Court holds that the parties are not in dispute as to the salient facts; that only a question of law is involved; and that therefore the case is ripe for summary judgment. See Community National Bank v. Dawes 369 Mass. 550 (1976).

From all of the evidence before the Court it finds the following facts.

1. On October 7, 1969, Forest Realty Trust was formed by a Declaration of Trust recorded in Book 11753, Page 296 Middlesex South Registry of Deeds. (All Book and page references are to the Middlesex South Registry of Deeds unless otherwise indicated.) John T. Chick [Note 1] was named as the sale trustee and Martin H. Alpert and Howard E. Alpert were named as the beneficiaries.

2. On October 15, 1969 Hyman Schatz et al conveyed the premises on Forest Street to John T. Chick, Trustee of Forest Realty Trust, recorded in Book 11753, Page 309. (Plaintiff's Exhibit 1) attached to Mahlowitz Affidavit)

3. On November 20, 1970, Forest Street Housing, Inc. was incorporated by Martin H. Alpert and Howard E. Alpert, who were and are the only stockholders and became president and the treasurer thereof respectively.

4. On that same day, November 20, 1970, John T. Chick, Trustee of Forest Realty Trust and Howard E. Alpert, Treasurer of Forest Street Housing, Inc., executed a Notice of Lease. (Plaintiff's Exhibit 4, attached to Mahlowitz Affidavit). The above notice made reference to a lease of the premises at 16-19A Forest Street, Cambridge, executed and delivered by John T. Chick, Trustee of Forest Realty Trust to Forest Street Housing, Inc. for the term of one hundred years.

5. On December 4, 1970 the notice of lease was recorded in Book 11928, Page 539.

6. On January 12, 1972 a mortgage on the property at 12-19 Forest Street was given to the Cambridge Savings Bank by Martin Alpert, Trustee, Forest Realty Trust, which was recorded January 17, 1972 in Book 12141, Page 45.

7. Also on January 12, 1972 Martin Alpert in his capacities as Trustee of Forest Realty Trust and as President of Forest Street Housing, Inc. executed an agreement with the Cambridge Savings Bank, recorded on March 28, 1972 in Book 12177, Page 613. (Defendant's Exhibit 6, attached to Affidavit of Martin H. Alpert) By this agreement Martin Alpert as Trustee and the Lessor of the property, agreed to hold the lease to Forest Street Housing, Inc. subordinate to the mortgage given to Cambridge Savings Bank by Forest Realty Trust dated that day, January 12, 1972. In addition Martin Alpert as president of Forest Street Housing, Inc. and the supposed Lessee, assented to the foregoing subordination. This was technically incorrect as the lessor and lessee were confused with each other.

8. On January 12, 1972 a second agreement was executed by Martin Alpert as president of Forest Street Housing, Inc. the supposed lessee, subordinating the lien of the lease to the lien of the mortgage held by the Cambridge Savings Bank. This instrument which was not recorded, was correctly drafted so that the lessee assented to the subordination.

9. On April 28, 1972 Elizabeth McPherson attached "all right, title and interest" in real estate of Forest Street Housing, Inc. located in Middlesex County, by instrument recorded May 1, 1972 in Book 12196, page 641. She was represented in the attachment proceedings by attorneys Phillip Shaw and Edward Mahlowitz.

10. On June 12, 1972 a mortgage was given by Martin H. Alpert, Trustee of Forest Realty Trust to Estelle Mitchell recorded in book 12245, page 698 covering the Forest Street premises.

11. On December 28, 1974 another mortgage was given by Martin H. Alpert, Trustee of Forest Realty Trust to Herbert and Martin Hoffman recorded in Book 12744, Page 122.

12. On April 28, 1975 the Hoffmans made an entry and took possession of the property under powers contained in their mortgage.

13. On June 4, 1975 a default judgment was obtained in the suit by McPherson against Forest Street Housing, Inc. and a levy was made on the property.

14. On August 6, 1975 Attorneys Phillip Shaw and Edward Mahlowitz formed Ecclesiastes 3:1, Inc. with Shaw being elected president and Mahlowitz clerk of the corporation. (Exhibit attached to Defendants' Affidavit of James J. Dillon)

15. On this same date, August 6, 1975, Ecclesiastes 3:1, Inc, purchased for $2,632.65 the interest of Forest Street Housing, Inc. in the property at 12-19 Forest Street at a Sheriff's sale held on the judgment of McPherson against Forest Street Housing, Inc. (Plaintiff's Exhibit 2, attached to Mahlowitz Affidavit).

16. On March 3, 1977 the Cambridge Savings Bank sold the property under the power of sale contained in its January 12, 1972 mortgage to Herbert S. Hoffman and Martin B. Hoffman for $1,208,000.00. The foreclosure deed to the Hoffmans was recorded on March 30, 1977 in Book 13162, Page 216. (See Defendants' Affidavit of James J. Dillon)

The Plaintiff claims it acquired a fee simple interest in the property at 16-19A Forest Street through Forest Street Housing, Inc. at the sheriff's sale. (See paragraph 15) It contends that the Trustee of Forest Realty Trust gave such a fee simple interest to Forest Street Housing, Inc. by the execution of a lease for 100 years on which fifty years remain unexpired. When the property was levied upon and sold at the sheriff's sale Plaintiff claims that this fee simple interest of Forest Street Housing, Inc. passed to it.

General Laws. c. 186, §1 [Note 2] was designed to invest a leasehold of one hundred years, which at common law was held to be mere personalty, with the dignity and quality equal to a life estate so long as fifty years thereof remain unexpired. See Stark v. Mansfield, 178 Mass. 76 , 81-82 (1901). Thus, whether or not Forest Street Housing, Inc. acquired a fee simple under c. 186, §l depends upon there being a lease.

No lease as such was put into evidence. By affidavit Martin H. Alpert denied that a lease was ever executed, as did Herbert S. Lerman, Esquire, the attorney who represented both Martin H. and Howard E. Alpert during the year 1970. Rather, a notice of lease was executed and recorded, reciting a lease to Forest Street Housing, Inc,

On all the evidence the Court finds that no lease as such was ever executed between the Trustee of Forest Realty Trust and Forest Street Housing, Inc, What was executed was a "notice of lease" as set forth in paragraph 4.

Would this notice of lease be a sufficient memorandum of the agreed terms so that it, of itself, could be regarded as the lease.

This depends largely upon the intentions of the parties to the instrument - these intentions to be ascertained from the instrument as a whole. Riedel v. Plymouth Redevelopment Authority 354 Mass. 664 , 665 (1960). Thus, it has been held "that if the instrument, upon its face, purports to be the contract upon which the occupation is to be enjoyed, and the relations and rights of the parties to be defined, and it contains apt words to operate as a present demise it will be so construed". McGrath v. Boston, 103 Mass. 369 , 371-372 (1869).

G. L. c. 183, §4 provides (among other definitions not here pertinent) that:

A "notice of lease", as used in this section, shall mean an instrument in writing executed by all persons who are parties to the lease of which notice is given and shall contain the following information with reference to such lease:- the date of execution thereof and a description, in the form contained in such lease, of the premises demised, and the term of such lease, with the date of Commencement of such term and all rights of extension or renewal.

The recorded notice here contains a date of execution (November 20, 1970), a description of the premises, (known as and numbered 16, 16A, 17, 17A, 18, 18A, 19, 19A Forest Street, Cambridge, Massachusetts) the term of such lease, with the date of commencement of such terms (Said lease is for a term of 100 years commencing November 20, 1970). It is silent as to any rights of extension or renewal. Nor does it have any of the other attributes usually found in a lease, such as the amount of rent to be paid, conditions of occupancy and the rights and liabilities of the parties to the lease. To have such a "notice" of lease be construed as the lease itself would in the opinion of the Court necessitate far more evidence of such an intention than is found here.

Rent control was imposed in Cambridge about this time and it seems evident that the Alperts were endeavoring to keep the Forest Street premises free from it. One way to do so was to make cooperative apartments out of the premises, since these were exempt from Cambridge rent control provisions then in force. This was never done. It is apparent that the actual purpose for recording the notice of lease to the Forest Street Housing, Inc. was to avoid the operation of the Cambridge rent control laws on the Forest Street apartments. Herbert S. Lerman, Esq., clerk of Forest Street Housing, Inc. says in his affidavit on behalf of the defendant that the notice of lease held the matter of rent control on the property in abeyance pending a decision as to the feasibility of a cooperative development. Whatever the purpose may have been, the Court finds that the notice of lease did not constitute a lease.

The objective of G. L. c. 183, §4 is to provide a means of giving notice of a lease without having to record the lease itself. The effect of the recorded notice of lease was to create in prospective purchasers a duty to inquire further. See Mister Donut of America v. Kemp, 368 Mass. 220 (1975). The general rule is that notice sufficient to make inquiry is notice of all that by reasonable inquiry would have been ascertained. Cunningham v. Pattee, 99 Mass. 248 , 252 (1868).

The plaintiffs purchased the interest of Forest Street Housing, Inc. at the Sheriff's sale. They were on notice that a mortgage to the Cambridge Savings Bank predated their attachment and that the purported lease had been sought to be subordinated to the mortgage. They had a duty to inquire further. This court is not disposed to allow them to take advantage of an obvious technical error in the subordination agreement to the detriment of major creditors of Forest Realty Trust.

The Court finds and rules that the notice of lease regarding the premises at 16-19A Forest Street is not in itself a lease and that, therefore, Forest Street Housing, Inc. did not hold a fee simple interest in the premises pursuant to G. L. c. 186, §l.

The Court rules that Forest Street Housing, Inc. had no title in the premises upon which plaintiff could levy, and that therefore the plaintiff acquired no interest in the premises as purchasers at the August 6, 1975 sheriff's sale. The Court further rules that the defendants Hoffman are lawfully in possession of the premises at 12-19A Forest Street and lawfully collecting rents under their foreclosure deed to the property dated March 30, 1977.

Accordingly summary judgment should be entered for the defendants.