Pawtucket Institution for Savings v. Gagnon
Rhode Island Supreme Court
475 A.2d 1028 (1984)
After R. & R. Construction defaulted on its debts, first mortgagee Pawtucket Institution for Savings (plaintiff) foreclosed and interpleaded competing creditors, including second mortgagee Lawrence Gagnon, who had advanced $25,000 to R. & R. under a construction contract promising an apartment building for $82,000, secured by a second mortgage stating it secured performance of the construction contract but also inadvertently referencing a nonexistent promissory note never mentioned in the contract. R. & R. never completed the building, so Gagnon finished construction himself and documented his expenses; third mortgagee F.D. McKendell Lumber (codefendant) argued Gagnon's mortgage was invalid because it imprecisely described the secured obligation, but the trial court ruled for Gagnon, and McKendell appealed.
Whether a mortgage deed is valid when it references a nonexistent promissory note but also describes, with reasonable certainty, an underlying construction contract obligation it was meant to secure.