In its decision yesterday in Wells Fargo Bank v. Comeau (pdf), the Massachusetts Appeals Court rejected the plaintiff mortgagee’s attempt to use the doctrine of equitable subrogation in a novel way: to impose on a surviving wife the obligation to pay a note signed by her late husband where the wife had not signed either the note or the mortgage.
The boiled down facts are as follows. Husband and wife owned a home as tenants by the entirety. In 2003 the property was mortgaged to a local bank. Husband alone signed the note; husband and wife signed the mortgage. In 2005 husband refinanced with a different bank. This time husband alone signed both the note and mortgage. In 2008 husband died, leaving a balance due on the note. Wells Fargo, successor of the refinancing bank, did not assert a claim against husband’s estate before the statute of limitations expired. Instead Wells Fargo sued wife, claiming its mortgage should be equitably subrogated to the position