Brown Service Ins. Co. v. King

• Decision Date: 27 December 1945
• Docket Number: 8 Div. 313.
• Parties: BROWN SERVICE INS. CO., Inc., v. KING et al.
• Court: Alabama Supreme Court

24 So.2d 219

247 Ala. 311

BROWN SERVICE INS. CO., Inc., v. KING et al.

8 Div. 313.

Supreme Court of Alabama

December 27, 1945

Spain Davies, Gillon, Grooms & Young and H. H. Grooms, all of Birmingham, and Norman W. Harris, of Decatur, for appellant.

S A. Lynne, of Decatur, for appellees.

LIVINGSTON, Justice.

The original bill of complaint in this cause was filed on October 30, 1944, by Brown Service Insurance Company, Inc., a corporation (the appellant here), against F. H. King, Mrs. F H. King and the Anniston Better Built Homes, Inc., a corporation, to foreclose a mortgage. The Anniston Better Built Homes, Inc. (formerly Decatur Better Built Homes Inc.), had become indebted to the appellant in the amount of $3550, evidenced by a promissory note secured by mortgage. This mortgage was executed pursuant to the National Housing Act, and was insured by the Federal Housing Administration. Subsequent to the execution of the mortgage, the appellee King purchased the mortgaged property and assumed the payment of the mortgage indebtedness. All payments due on the mortgage indebtedness up to April 1, 1944, were made, but default was made in the payments accruing subsequent to that date.

The bill prayed that the mortgage be foreclosed or, in the alternative, that, 'in the event the court determines that the defendant F. H. King is unable on account of his military service to pay said indebtedness as the same is due and payable, it will ascertain and determine the amount he is able to pay, and will order that he pay such amount at such periods as to the court may seem equitable, and that in default thereof said mortgage be foreclosed and said property be sold. * * * Any deficiency between the proceeds of the sale and the amount of the indebtedness, interest, attorneys' fee and cost be reduced to judgment against the defendant F. H. King and the defendant Anniston Better Built Homes, Inc.'

On December 8, 1944, the appellee F. H. King under the Soldiers' and Sailors' Civil Relief Act filed a petition to stay the foreclosure proceeding. Upon hearing the petition, the court entered its order staying the proceedings to foreclose, and ordered appellee King to pay, beginning with the month of May, 1944, to appellant the sum of $4.74 per month during King's period of military service, and for three months thereafter. The court further ordered that a deposit of $30.60, held by appellant to cover taxes and insurance premiums, be applied to mortgage payments in default.

The following is appellant's statement of the case made by the evidence:

'It is agreed that the principal balance due on the mortgage was $3,500.08. At the date of the decree, the taxes and hazard premiums, the interest and the F. H. A. mortgage insurance amounted to $19.44 a month. The mortgage provided that the payments due on the note for principal and interest should be $19.74 per month. The fire and hazard insurance amounts to $4.74. The over-all payments amount to $26.00 per month. In the agreed statement appearing in the record, it is stated that the charges, exclusive of the principal, amount to $19.44, whereas, the mortgage note provides for principal and interest payments of $19.74.

'The taxes amount to $35.75 per annum, or $2.98 per month. The hazard insurance amounts to $21.09 per annum, or $1.76 per month. Interest at 4 1/2% on the unpaid balance amounts to $13.12 monthly. Consequently, the breakdown as to these items is as follows:

"Interest $13.12

Taxes 2.98

Hazard Insurance 1.76

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Total 17.86

'The total of $19.44 includes F. H. A. mortgage insurance. The $17.86 deducted from $19.44 leaves $1.58 for this item. The principal payments amount to the difference between $19.44 and $26.00, which is $6.56 per month. By using the over-all payment of $26.00, the final breakdown is as follows:

"Interest $13.12

Principal 6.56

Taxes 2.98

Hazard Insurance 1.76

F. H. A. Mtg. Ins. 1.58

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Total 26.00

'The court's decree directed that appellee King pay $4.74 per month, which is the amount of the taxes and hazard insurance only. No provision was made for the payment of any part of the principal, nor of interest in the amount of $13.12 per month, nor the F. H. A. mortgage insurance premium of $1.58 per month, a total for these two items of $14.70. These two items alone will amount to $176.40 per annum. The decree stayed the payments of principal, interest and mortgage insurance premium amounting to $21.26 per month or 82% of the obligation.

'Appellee King quit work at Wright Field on April 15, 1944, expecting to be inducted into the Army. He was actually inducted on June 22, 1944. He has a wife and three children who occupy the house on the mortgaged premises. He has an allotment for his wife and children of $120.00 per month and receives himself $14.80, or a total for the family of $134.80. At the time of the trial, he had received his overseas orders and presumably is now overseas and, of course, he would receive, in addition to the pay referred to, the allowances for overseas service, which we believe will be found to be 20% additional pay for an enlisted man.

'The house that was purchased by King was one of sixteen similar houses built by the Anniston Better Built Homes, Inc., six of which houses have been sold and one of which was the house purchased by King. The remaining ten are renting for $39.99 per month. The undisputed evidence was that this was a reasonable rent for these houses and consequently for the house purchased by King. The approximate market value of this house at the time of the trial was $4,000.00. The loan was made on the basis of a value of $4,050.00. Consequently, the loan was made on the basis of approximately 87 1/2% of the value of the property, leaving very little equity in the purchaser.'

To the foregoing, we may add that it is undisputed that King purchased the mortgaged property from the Anniston Better Built Homes, Inc., on November 2, 1943, paying therefor the sum of $400 in cash and assumed the $3550 mortgage. That when King's deferment from military service was disallowed, and he was released from his job at Wright Field on April 15, 1944, for induction into the Army, his salary or wages was approximately $400 per month. That when King was inducted into the Army he had between $200 and $300 in money and no other property. That since his induction, illness in his family has reduced his capital to less than $100.

Appellant contends that the trial court abused its discretion in fixing the payments to be made by appellee at only $4.74 per month.

Title 50 U.S.C.A.Appendix § 532(2), governs the matter here at issue. That part of the section referred to is as follows:

'(2) In any proceeding commenced in any court...