Clark v. Hass

• Decision Date: 17 May 1935
• Docket Number: 29216.
• Parties: CLARK v. HASS ET AL.
• Court: Nebraska Supreme Court

260 N.W. 792

129 Neb. 112

CLARK v. HASS ET AL.

No. 29216.

Supreme Court of Nebraska.

May 17, 1935

Syllabus by the Court.

Where upon a hearing on an application for a moratory stay of proceedings under section 20-21,159, Comp. St. Supp. 1933, it appears that the amount of the mortgage lien exceeds the value of the lands secured by the mortgage, it is not an abuse of discretion on the part of the trial court to deny the application.

Appeal from District Court, Saline County; Proudfit, Judge.

Suit by W. Clayton Clark against Joseph Hass and others. From an adverse order, the named defendant appeals.

Affirmed.

Bernard J. Klasek, of Wilber, and Fred P. Komarek, of Bruning, for appellant.

Robert R. Hastings, of Crete, for appellees.

Heard before GOSS, C. J., and ROSE, GOOD, EBERLY PAINE, and CARTER, JJ., and REDICK, District Judge.

CARTER, Justice.

This suit was commenced to foreclose a real estate mortgage on 160 acres of land in Saline county. The land was in two tracts, one consisting of 120 acres and the other of 40 acres. The district court found that the appellee had a first lien upon the 120-acre tract which at the time of the sale amounted to $12,314.64, and that the appellee had a first lien upon the 40-acre tract which at the time of the sale amounted to $3,311.77. The court also found that there was a valid second lien against all of the lands mentioned, which at the time of the sale amounted to the sum of $3,491.38. The decree of foreclosure was entered on September 27, 1932. By stipulation, the appellant and mortgagor received a stay of proceedings for one year instead of the usual nine months' stay allowed by statute. After the expiration of the stay, the mortgaged land was sold under an order of sale. Before a confirmation of the sale was had, the appellant, Joseph Hass, as owner and mortgagor, applied for a moratorium staying further judicial proceedings until March 1, 1935, under the Nebraska Moratory Act. Comp. St. Supp. 1933, § 20-21,159. Under this statute, mortgagors were permitted by judicial order to retain possession of the mortgaged premises until March 1, 1935, on condition of paying rent and complying with other terms imposed by the trial court, unless upon hearing of the application, good cause is shown to the contrary. From an order denying the application and confirming the sale, the appellant brings this appeal.

The appellee contends that the trial court rightfully denied the application and confirmed the sale for two reasons: First, that the Moratory Act, section 20-21,159, Comp. St. Supp. 1933, is unconstitutional; and, second, that the mortgage indebtedness far exceeds the value of the land, and that under such circumstances the trial court was not required to grant the application.

It is conceded by counsel in the argument to the court, and the record so discloses, that the constitutionality of section 20-21,159, Comp. St. Supp. 1933, was not raised in the district court. It cannot therefore be considered on this appeal under the recent holdings of this court in Bell v. Niemann, 127 Neb. 762, 257 N.W. 69, and Howarth v. Becker, 259 N.W. 505.

The only question left for consideration is whether the trial court erred in denying the application for a moratorium under the facts in this case. The counter showing of the appellee discloses that the total amount of the liens against the mortgaged lands is $19,117.79. The land was sold for $15,626.41, which the court found to be a fair value. The appellant offered no evidence to dispute the fact that the value of the mortgaged real estate was less than the amount of the liens against it and we therefore assume that the appellant has no equity in the property at the present time. The question is whether the trial court must, as a matter of right, grant a moratory stay under section 20-21,159, Comp. St. Supp. 1933, where it appears that the mortgage security is of less value than the liens against it.

Under the Moratory Law the court is required to grant the stay therein provided for, " unless upon hearing on said application, good cause is shown to the contrary." In other words, does a showing that the liens against the mortgage security exceed its value constitute good cause to the contrary? The very purpose of the Moratory Act was to protect the interests of mortgagors where, because of the existing emergency, their lands would be sold to satisfy mortgage liens of a much less amount than the value of the mortgagor's interest. But a mortgagor who has no actual equity in the land has no valuable interest to protect. The appellant quotes freely from the opinion in Blaisdell v. Home Bldg. & Loan Ass'n, 189 Minn. 422, 249 N.W. 334, 86 A.L.R. 1507, and especially from the concurring opinion of Chief Justice Wilson therein. However, the language of Wilson, C. J. (189 Minn. 422, on page 434, 249 N.W. 334, 339, 86 A.L.R. 1507), in that case upholds our view of the law, viz.: " It follows that it is detrimental to the public interest for our people to lose their valuable lands, improved or unimproved, at a time when the banks are closed and when it is impossible to find any one who will make a mortgage loan. Funds are simply not available regardless of the security offered. The plight of the landowner has been enhanced because of the depreciation in land values resulting in many cases of the land being worth less than the mortgage. In such case the mortgagor can have no legislative help."

There is still another reason why Blaisdell v. Home Bldg. & Loan Ass'n, supra, is not an authority in the case at bar. It must be borne in mind that the opinion of a court should be interpreted as a whole, and construed with reference to the facts on which it is based; the language used must be held as referring to the particular case and read in the light of the circumstances under which it was used and of the issues as framed by the pleadings. 15 C. J 970. "...