CORINA MURPHY & another [Note 1] vs. CHARLESTOWN SAVINGS BANK.

LIACOS, J. In this action, based on G. L. c. 93A, Section 9, the plaintiffs, Corina and Thomas J. Murphy, alleged that the defendant, Charlestown Savings Bank (bank), had committed unfair or deceptive acts or practices relating to the servicing and foreclosure of the bank's mortgage on the Murphys' residence. The plaintiffs sought a preliminary injunction forbidding the bank from conveying title to the premises.

Page 739

The Murphys also prayed that the title be returned to them and that they be awarded general, incidental and consequential damages for loss of the equity in their property. Finally, they sought multiple damages and the attorney's fees as permitted under c. 93A. On February 14, 1979, the defendant filed an answer. On February 27, a judge of the Superior Court denied the plaintiffs' request for a preliminary injunction. The defendant moved on April 19 for judgment on the pleadings. Treating the motion as one to dismiss pursuant to Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974), the judge allowed it on May 22. On May 23 he entered judgment for the defendant. The plaintiffs appealed from that judgment. We transferred the plaintiffs' appeal here on our own motion. We affirm the judgment. [Note 2]

For purpose of reviewing the ruling on the motion to dismiss, we take as true the allegations of the complaint and reasonable inferences that favor the plaintiffs. Lowell Gas Co. v. Attorney Gen., 377 Mass. 37, 39 (1979). The facts alleged are these. On or about June 3, 1974, the Murphys, husband and wife, gave the bank a mortgage on their home at 197 Bunker Hill Street, Charlestown, Boston, to secure a loan of $19,000. At that time the bank appraised the premises at $28,000. The mortgage payments were maintained for about three and one-half years, at the end of which time the Murphy were having marital difficulties. Corina filed for divorce, and Thomas was ordered to vacate their home. Thomas did not contribute to her support, the support of their minor child, or the upkeep of the home. In May, 1978, the Murphy were in arrears on their mortgage payments for March, April, and May. Corina contacted the bank, requested a temporary waiver of principal payments, and was led to believe that a waiver would be granted if her attorney submitted a formal request. Accordingly, on June 7, 1978, her counsel wrote to the bank, but, on June

Page 740

12, the bank rejected Corina's request. On July 3, the bank sent notice to Corina's attorney and a copy to Thomas, at a Melrose address, that the Murphys' loan was scheduled for foreclosure on July 11, 1978. The bank on August 4 filed in the Land Court a complaint for authority to foreclose the mortgage by entry and possession and to exercise a power of sale. On September 1, Corina Murphy furnished her attorney with a check for $1,567.75, full payment of mortgage arrearage, including late charges, for May through September, 1978. On that day her attorney informed the bank by letter that he had the check. The bank did not reply, and on September 12 Corina's attorney forwarded the check to the bank. Three days later the bank returned the check, requested that it be certified and demanded that payment include attorney's fees of $369.85. According to the bank, if Mrs. Murphy did not comply with these demands by 12 noon, September 22, 1978, foreclosure proceedings would resume. On September 21 Corina mailed the bank a certified check for $1,567.75 and requested an extension for payment of the attorney's fees. The bank rejected her request. On October 10, she attempted to pay in cash $1,877.75, which included all arrearages and late charges. She also sought to make a partial payment of the attorney's fees and promised to pay the balance within a short time. The bank again rejected her request. [Note 3]

On November 15 the bank foreclosed the property by sale. The plaintiffs and their attorneys allegedly were unaware of the sale. The bank forwarded notice of sale to both plaintiffs at a Westford address even though bank officials allegedly had reason to know that Thomas lived in Melrose. The bank also had reason to know that the plaintiffs did not have actual notice of the sale because letters of notice were returned unopened. At the sale of November 15, the bank

Page 741

bought the property for $17,000. On the same date the bank entered into a purchase and sale agreement with tenants of the property, whereby the bank would sell the property for $24,000 and take back a $22,800 mortgage. [Note 4] At that time the fair market value of the property allegedly exceeded $30,000, and the bank allegedly was aware of this. Furthermore, the plaintiffs contend that, before the foreclosure sale, the bank had entered into negotiation to sell the property for $24,000.

On January 11, 1979, the plaintiffs sent the bank a demand letter, listing ten purported wilful and knowing violation of c. 93A. In essence, the letter asserted that the bank committed unfair or deceptive acts or practices (1) by twice refusing full payment of mortgage arrearage and late charges, refusing because the Murphys were in the process of obtaining a divorce, and foreclosing with only $369.85 legal fees in dispute; (2) by refusing to grant waiver of principal payments, and leading Corina to believe that a waiver would be granted; (3) by failing to afford either the Murphys or Corina's attorney adequate notice of the foreclosure sale; (4) by negotiating before the foreclosure sale to sell the property to a third party; purchasing the property, worth over $30,000 for $17,000, an amount less than the outstanding mortgage; and then agreeing to sell the property to the third party for $24,000 with a 90% purchase money mortgage. The bank answered each allegation individually and refused to offer settlement. After receiving the demand, the bank allegedly refused credit to the third party purchaser of the property. At the time the complaint was filed, the bank had retained title, but was seeking a buyer.

The Murphys argue that c. 93A applies generally to banks. They assert that their mortgage transaction with the bank made them purchasers of property within the meaning of G. L. c. 93A, Section 9 (1). They claim that their complaint adequately alleges that the bank's conduct caused them to lose the equity in their property, and this constituted the loss of money or property that Section 9 (1) requires, and that the bank behaved unfairly and deceptively.

Page 742

We have reserved the question whether c. 93A applies generally to banks. Mechanics Nat'l Bank v. Killeen, 377 Mass. 100, 110 n.8 (1979). The defendant argues that, even though banks engage in commerce, they are not covered under G. L. c. 93A, Section 2 (a). [Note 5] Although the parties have briefed the issue of applicability of the statute based on their varied views of the meaning of the statutory language and the intent of the Legislature, the issue is not adequately briefed, nor is it one essential to decide for the determination of this appeal. [Note 6] Thus, we do not decide the issue, but assume arguendo the applicability of G. L. c. 93A, Section 2 (a), to banks solely for purposes of considering the question whether the mortgage transaction of the plaintiffs with the bank made the plaintiffs purchasers of property within the meaning of G. L. c. 93A, Section 9 (1), as amended through St. 1978, c. 478, Section 45. We conclude, for the reasons stated, it did not. This determination being dispositive, we need go no further.

At the time of the alleged unfair or deceptive act or practice in this case, a party seeking a private remedy under G. L. c. 93A, Section 9 (1), "was required to show: first, that he or she purchased or leased goods, services or property, real or personal primarily for personal, family or household purposes." Linthicum v. Archambault, 379 Mass. 381, 384 (1979). Dodd v. Commercial Union Ins. Co., 373 Mass. 72, 80-82 (1977).

Page 743

The language "[a]ny person who purchases or leases goods, services or property, real or personal," has since been struck from Section 9 (1). Statute 1979, c. 406, Section 1, effective October 18, 1979, amended c. 93A to afford a remedy to "[a]ny person, other than a person entitled to bring action under section eleven of this chapter [i.e., a person "who engages in the conduct of any trade or commerce"], who has been injured by another person's [unfair or deceptive act or practice]." Thus, Section 9 may no longer contain limits based on the nature of the transaction or the plaintiff's status within that transaction. [Note 7] However, the Murphys' cause of action arose in 1978, before the new amendment's effective date, and they must hurdle obstacles that for later plaintiffs may have been swept away. Thus, they must answer the question that we raised in Mechanics Nat'l Bank v. Killeen, supra at 110 n.8: they must demonstrate that a mortgagor in a home loan mortgage is a "purchaser" of property within the meaning of former Section 9.

The plaintiffs argue in substance that a mortgagor is a purchaser of the use of money. They assert, in effect, that payment of interest is consideration for the use of money, and the right to use money is a valuable property right. A purchase is "the act of acquiring property by the payment of the price." Hunt v. Bassett, 269 Mass. 298, 302 (1929). See also Howard v. Chicopee, 299 Mass. 115, 122 (1937). Thus, the plaintiffs argue, a mortgagor is a purchaser. Furthermore, treating a mortgagor as a purchaser would be consistent with our frequent observation that G. L. c. 93A deserves broad construction.

The plaintiffs' argument has some intuitive appeal. We have stated that payment of interest is essentially consideration for the use of money. New England Factors, Inc. v. Genstil, 322 Mass. 36, 40 (1947). See

Page 744

Commissioner of Corps. & Taxation v. Rathbone, 321 Mass. 312, 313 (1947). We do not dispute that the right to the use of money is, in some settings, a valuable property right. [Note 8] Nor would we contend that the Hunt definition is inapplicable in all contexts that may arise in the law. [Note 9] However, we do not think that the word "purchase" in former G. L. c. 93A, Section 9, was intended to include a conventional home loan mortgage. And the principle counseling us to construe c. 93A broadly does not urge us to adopt a construction that outstrips the intent of the Legislature. See Baker Transp., Inc. v. State Tax Comm'n, 371 Mass. 872, 877 n.11 (1977). [Note 10]

Page 745

Under the plaintiffs' interpretation, any loan of money [Note 11] for interest is a purchase by the borrower. The plaintiffs' reasoning does not distinguish between secured and unsecured loans. Neither the plaintiffs nor the amicus Massachusetts Urban Reinvestment Advisory Group, Inc., has cited a single authority that characterizes a loan of money as a purchase of the use of money. [Note 12] For that reason alone, we

Page 746

question that the Legislature had home loan mortgages in mind when it wrote the word "purchases" into former Section 9. Furthermore, the status of existing law argues emphatically against the plaintiffs' approach. Analogous statutory material and relevant case law either do not support the plaintiffs' analysis or they stress outright the distinction between a loan and a purchase. Faced with the pressure of authority the reed of intuition must bend.

The Uniform Commercial Code (UCC), G. L. c. 106, and the Federal Consumer Credit Protection Act, 15 U.S.C. Sections 1601 et seq. (1976), provide natural sources of analogy for analyzing the language in former Section 9. [Note 13] The UCC definition

Page 747

of "purchase" states: "`Purchase' includes taking by sale, discount, negotiation, mortgage, pledge, lien, issue or re-issue, gift or any other voluntary transaction creating an interest in property." G. L. c. 106, Section 1-201 (32). The language "taking by ... mortgage" does not help the plaintiffs. As we understand the phrase, it refers to a mortgagee's taking of a mortgage, not to the mortgagor's receipt of money. See Tillotson v. Stephens, 195 Neb. 104 (1975). Cf. Kennett-Murray & Co. v. Pawnee Nat'l Bank 598 P.2d 274, 278 (Okla. 1979), and cases cited therein (secured party is a purchaser). This understanding of "taking by ... mortgage" is consistent with our title theory of mortgages, under which "[a] mortgage of real estate is a conveyance of the title or of some interest therein defeasible upon the payment of money or the performance of some other condition." Perry v. Miller, 330 Mass. 261, 263 (1953). See Negron v. Gordon, 373 Mass. 199, 204 (1977). Here too the mortgagor appears in the guise of a "seller" and the mortgagee in the guise of a "purchaser."

The UCC is helpful to the plaintiffs only if a loan of money with interest is a "taking by ... voluntary transaction creating an interest in property." We find no cases to support such a view. This gap is in part understandable because money is expressly excluded from coverage as "goods" under art. 2, G. L. c. 106, Section 2-105 (1), "commercial paper" under art. 3, G. L. c. 106, Section 3-103 (1), or "securities" under art. 8, G. L. c. 106, Section 8-102 (1) (b), the principal varieties of property with which the UCC deals. Moreover, we doubt that the Legislature's intent for former Section 9 was coincident with the UCC definition of "purchase" as "taking by ... any ... voluntary transaction creating an interest in property." In so far as Section 9 applies to both a purchase of property and a purchase of services, the UCC definition is not broad enough. On the other hand, as the definition applies to purchases of property, it is too broad. A lessee of goods or

Page 748

real estate takes by a voluntary transaction creating a possessory interest in property. See McDonald's Chevrolet, Inc. v. Johnson, Ind. App. (1978) [Note a] (bailee of mobile home is purchaser). But if "purchase" includes "lease," there was no need for the Legislature to include both words in former Section 9 of c. 93A. "It is a common tenet of statutory construction that, wherever possible, no provision of a legislative enactment should be treated as superfluous." Casa Loma, Inc. v. Alcoholic Beverages Control Comm'n, 377 Mass. 231, 234 (1979). Adopting the "voluntary transaction" clause of the UCC definition of "purchase" would render the word "leases" in former Section 9 superfluous. Therefore, that clause of the UCC definition is not applicable in former Section 9, and the UCC definition contains no language helpful to the plaintiffs' view. [Note 14]

The Federal Consumer Credit Protection Act, 15 U.S.C. Sections 1601 et seq. (1976), [Note 15] and its Massachusetts analogue, G. L. c. 140C, further undermine the plaintiffs' position. Although neither statute defines "loan" or "sale," the Federal act does define "credit sale," 15 U.S.C. Section 1602(g) (1976). According to id., Section 1602 (f), "[t]he term `creditor' refers only

Page 749

to creditors who regularly extend ... credit ... for which the payment of a finance charge is ... required, whether in connection with loans, sales of property or services, or otherwise." Furthermore, id. Section 1639(a) sets out disclosure requirements for a creditor making a consumer loan transaction which is not a credit sale. The Federal Reserve Board's Regulation Z, Truth in Lending Regulations, [Note 16] makes still clearer the distinction between "consumer loan" and "credit sale." Compare 12 C.F.R. Section 226.2 (K) (1979) (defining "Consumer loan") with id. Section 226.2(n) (defining "Credit sale"). Compare id. Section 226.8(c) (disclosure requirements for credit sales) with id. Section 226.8(d) (disclosure requirements for loans and other nonsale credit). The intent to differentiate between the two concepts also appears in the definition of "credit" as "the right granted by a creditor to a customer to defer payment of debt, incur debt and defer its payment, or purchase property or services and defer payment therefor." Id. Section 226.2(q). Nowhere in the statutory or regulatory scheme do we find mention of a purchase of credit.

There is clear evidence that the Legislature knew of these sections of the Federal act when it enacted former Section 9. General Laws c. 93A, Section 9, was first inserted by St. 1969, c. 690, approved August 13, 1969. Yet, in St. 1969, c. 517, Section 1, approved July 16, 1969, only four weeks before, the Legislature enacted G. L. c. 140C, whose language tracks that in Regulation Z and makes the identical distinction between loan and sale. G. L. c. 140C, Sections 1 (j), (k), (m); 7 (c), (d). It seems probable that the Legislature had the same distinction in mind when it enacted former Section 9. [Note 17]

Page 750

Although we conclude that the plaintiffs are not purchasers of property within the meaning of former Section 9, our holding today is closely cabined. The plaintiffs argue in substance that a borrower of a loan of money with interest, whether the loan is secured or not, purchases the use of money. We do not think that the Legislature intended to include such a transaction as a "purchase." Without more, the mere fact of borrowing money and repaying the money with interest is insufficient to establish a qualifying transaction under former Section 9. Whether a similar transaction would qualify under the amended version of Section 9 is a question we must hold in abeyance.

Judgment affirmed.