Atlantic Life Ins. Co. v. Klotz

• Court: Mississippi Supreme Court
• Writing for the Court: Griffith, J.
• Citation: Atlantic Life Ins. Co. v. Klotz, 181 So. 519, 182 Miss. 243 (Miss. 1938)
• Decision Date: 30 May 1938
• Docket Number: 33245
• Parties: ATLANTIC LIFE INS. CO. v. KLOTZ et al

181 So. 519

182 Miss. 243

ATLANTIC LIFE INS. CO. v. KLOTZ et al

No. 33245

Supreme Court of Mississippi

May 30, 1938

Division B

1 MORTGAGES.

Issuance of an injunction under moratorium statute without proof showing that mortgagor had made effort at refinancing was improper (Laws 1936, chapter 287, section 3).

2 MORTGAGES.

Before an injunction is issued under a moratorium law notice must be given to lienholder, if reasonably possible (Laws 1936 chapter 287).

3 MORTGAGES.

Before an injunction is issued under moratorium law, evidence must establish the existence of an emergency (Laws 1936, chapter 287).

4. EQUITY.

Where property owner agreed in writing with lienholder that, If lienholder would pay taxes, paving assessments and cost of repainting residence, owner would under extension agreement proceed to make monthly payments, but owner's wife refused to execute formal extension agreement, lienholder which advanced nearly $2,500 under the agreement was not entitled to dismissal of owner's bill under moratorium statute on theory that equity would regard as done that which ought to be done and thereby bring into operation the section of moratorium law regarding extension agreements (Laws 1936, chapter 287, section 12).

5. MUNICIPAL CORPORATIONS. Subrogation. Taxation.

Where property owner agreed in writing that, if lienholder would pay taxes, paving assessments and cost of repainting residence, owner would, under extension agreement, proceed to make monthly payments, and lienholder on face of agreement advanced nearly $2,500, but owner's wife refused to execute formal extension agreement, lienholder was entitled to be recognized as subrogee of liens of city, county and state for taxes and special assessments, and of statutory lien for repairs.

6. MECHANICS' LIENS. Municipal Corporations. Taxation.

The moratorium laws do not apply to liens of city, county and state for taxes and special assessments or to statutory liens for repairs (Laws 1936, chapter 287).

7. CONSTITUTIONAL LAW.

Whether an emergency exists under which continued operation of moratorium law depends is open to judicial inquiry (Laws 1936, chapter 287).

8. EVIDENCE.

Courts take judicial notice of general conditions throughout their territorial jurisdiction.

HON. R. W. CUTRER, Chancellor.

APPEAL from the chancery court of Pike county, HON. R. W. CUTRER, Chancellor.

Suit by S. P. Klotz and wife against the Atlantic Life Insurance Company under the moratorium statute for an injunction against sale under trust deed. From an adverse decree, defendant appeals. Decree reversed, injunction dissolved, and cause remanded.

Reversed, injunction dissolved and remanded.

Roach & Jones, of McComb, for appellant.

The court erred in holding that the appellees were entitled to any relief by virtue of Chapter 287 of the General Laws of Mississippi of 1936.

A mortgagor must not only allege, but, if required so to do by answer, prove the exhaustion of all federal agencies.

Jones v. Spearman, 165 So. 294, 174 Miss. 781.

The appellees totally failed to make sufficient allegations in their bill of complaint to entitle them to any relief under Chapter 287 of the Laws of 1936. The only allegations found in the bill of complaint with reference to being unable to refinance the indebtedness through an agency or instrumentality of the United States government is the following allegation: "Complainants would further show that on account of general conditions they are unable to refinance things." We submit that this allegation does not meet the requirement of Chapter 287 of the Laws of 1936, but granting merely for the sake of argument that it does so, we direct the court's attention to the denials of the appellants' answer.

In view of this denial in the answer of the appellant ir clearly became the duty of the appellee on the trial of the motion to dissolve to prove that they had complied with Section 3 of Chapter 287 of the Laws of 1936 with reference to endeavouring to refinance the indebtedness through an agency or instrumentality of the United States government. The appellees totally failed to comply with this condition precedent to their right to relief under said laws.

This case should be reversed and the bill dismissed for the reason that it is admitted by the appellees, that the injunction in this cause was issued on the 31st day of July, 1937, without any notice to the appellants and without any hearing first being had on the bill requesting the injunction.

Federal Land Bank of New Orleans v. Lee, 165 So. 613, 174 Miss. 774.

Both appellees are residents of Pike County, Mississippi, where the property was advertised for sale. The notice of sale designates the 8th day of July as the date of sale. No extreme situation or emergency existed to prevent the appellees first giving the appellants notice of their intention to request an injunction, and as the appellees and the chancellor both reside in Pike County they had plenty of time before the foreclosure to give the appellants notice, but instead of doing so they had the court to grant the injunction without bond and without any notice whatever to the appellants and without the court taking any testimony to ascertain that the appellees were entitled to the injunction. Under authority of Federal Land Bank of New Orleans v. Lee, supra, we submit that this action of the court was error.

The appellant insurance company, relying upon the good faith of the appellees, proceeded to comply with its part of the extension agreement in full and made expenditures in the amount of $ 2,441.18. After the appellees, however, had obtained all of the benefits to accrue to them under the extension agreement they refused to accept any of the burden and failed and refused to sign the extension agreement when ir was presented to them, and failed and refused to pay the monthly payments of $ 76.26, as they had agreed to do. We submit that ir is unconscionable and inequitable fora court of equity to condone such action.

We contend that if the equitable maxim of "Equity regards that as done which ought to be done" is brought into operation and effect that the appellees were entitled to no relief under Chapter 287 of the Laws of 1936. It is admitted by the appellee, S. Paul Klotz, that he failed to keep up the monthly payments of $ 76.26 as provided in the extension agreement.

L. H. McGehee, of McComb, for appellees.

My friends complain in their brief, not in the lower court however, that the proper allegation was not in the bill of complaint, but the bill of complaint does show that on account of general conditions they were unable to renounce things, which is tantamount to the words used by the court in the Jones and wife v. Spearman, et al., 165 So. 294, 174 Miss. 781, my contention being that that is a mere oversight and raises a question that should have been raised on the trial of this case, and by the answer of the appellees in order that proper amendments might be made to bring the case within the statute so that all questions going to the right and the wrong of the case might be properly settled.

My friends strenuously argue that there was ah agreement between appellees and appellants to extend these payments, which was true. There was a letter written by the agent of the Atlantic Life Insurance Company to the assistant treasurer in Richmond, Virginia, as shown by the record, and signed by Dr Klotz, but not Mrs. Klotz, on January 2, 1937, but this agreement was not consummated as will be seen by another letter written by the company in May 1937, and the reason Doctor Klotz gives is in the last paragraph of said letter, paragraph four, wherein they say to him, "If I should fail in any respect to fully and completely discharge any one of all the matters set out above in items 1, 2 and 3, I further expressively agree that I will not invoke the aid of the Mississippi moratorium laws in order to hinder, obstruct or delay the orderly foreclosure of the deed in trust held by you in securing the indebtedness herein referred to in the event you decide to take such action." This court will notice, and by the testimony of Doctor...