Federal Land Bank of New Orleans v. Lee

• Court: Mississippi Supreme Court
• Writing for the Court: Ethridge, P. J.
• Citation: Federal Land Bank of New Orleans v. Lee, 174 Miss. 774, 165 So. 613 (Miss. 1936)
• Decision Date: 10 February 1936
• Docket Number: 32019
• Parties: FEDERAL LAND BANK OF NEW ORLEANS v. LEE et al

165 So. 613

174 Miss. 774

FEDERAL LAND BANK OF NEW ORLEANS v. LEE et al

No. 32019

Supreme Court of Mississippi

February 10, 1936

Division B

1 MORTGAGES.

Court held without authority to restrain under Moratorium Act foreclosure of trust deed by Federal Land Bank on ground that bank had arbitrarily refused to grant mortgagors same extensions of credit as to other debtors since advisability of granting credit was administrative question for bank directors (Laws 1934, chapter 247; 12 U.S.C. A., section 781 (10)).

2 MORTGAGES.

Court should not grant injunction restraining foreclosure of trust deed without hearing on matter, if reasonably possible, especially where no bond is given to protect mortgagee (Laws 1934, chapter 247).

3. MORTGAGES.

Injunction restraining foreclosure of trust deed under Moratorium Act should be refused where conditions required by act for its invocation do not exist at time injunction is sought (Laws 1934, chapter 247).

HON. BEN STEVENS, Chancellor.

APPEAL from the chancery court of Pearl River county HON. BEN STEVENS, Chancellor.

Bill by Nash Lee and others against the Federal Land Bank of New Orleans. Judgment for plaintiffs, and defendant appeals. Reversed, and bill dismissed.

Reversed and bill dismissed.

J. M. Thomas, T. H. Hedgepeth and W. L. Pack, Jr., all of New Orleans, La., and John A. Yeager, of Lumberton, for appellant.

The preliminary injunction was issued without bond and this alone is sufficient to show that the suit was based upon the Moratorium Law, because there is no such thing in Mississippi practice as a preliminary injunction without bond, aside from the Moratorium Law.

Griffith's Chancery Practice, sec. 448.

If appellees' case and their right to an injunction depend upon chapter 247 of the Laws of 1934, which is manifest, it necessarily follows that the decree of the court below should be reversed, because this court has recently passed upon the identical question presented in the instant case. In the case of Federal Land Bank of New Orleans v. Tatum, 164 So. 319, this court expressly held that the Federal Land Bank of New Orleans was an agency of the. United States and that deeds of trust held by it were exempt from the operation of the Moratorium Law.

It is respectfully submitted that there can be no possible basis for appellees' claim that they were entitled as a matter of right to an extension of the delinquencies on their indebtedness and that the bank had no right to decline their request for the extension.

Federal Land Bank of Omaha v. Wilmarth, 252 N.W. 507, 94 A.L.R. 1338; Standard Lbr. & Mfg. Co. v. Deposit Guaranty Bank & Trust Co., 169 Miss. 120, 152 So. 639.

We respectfully submit that this suit cannot be maintained under the Moratorium Law, which, as it existed at the time the case was passed on by the lower court, exempted this deed of trust from its operation, nor can the suit be maintained on either of the other two grounds set up in the bill. It is realized that since the suit was tried in the lower court the Legislature has amended the Moratorium Law so as to remove the exemption as to federal agencies, but this can avail the appellees nothing in the present suit. If the change in the statute gives the appellees any rights they did not have heretofore, such rights can be invoked in a new proceeding but it is submitted that the instant suit must be controlled by the law as it existed when the suit was filed and when the matter was passed on by the lower court.

Hathorn & Williams, of Poplarville, for appellees.

We respectfully submit that in view of the language of the bill of complaint charging the arbitrary abuse of discretion by the appellant, Federal Land Bank of New Orleans, acting, of course, through its board of directors, the bill presented an issue, independently of the Moratorium Act, which required an answer; that the demurrer admits the truth of this issue; and if these averments of the bill should be established upon a hearing of the case on the merits, appellees would be entitled to an injunction against appellants restraining them from selling their property.

18 C. J. 1134, par. (2) B; Taylor v. Robertson, 16. Utah, 330, 52 P. 1; City of Eureka v. Wilson, 15 Utah 53, 58 P. 41; State v. Yapp, 2 S.E. (N. C.) 458; 40 L.R.A. (N.S.) 148; Lane v. Insurance Co., 54 S.E. 854; Murray v. Supreme Hive, 80 S.W. 827; Van Houten v. Pine, 38 N.J.Eq. 72; Leonard v. Prudential Ins. Co., 107 N.W. 646; Lovick v. Providence Life Assn., 14 S.E. 506.

In this connection, however, we do confess that the injunction was erroneously granted and should have been dissolved, for the reason that the record shows on its face that it was issued under the Moratorium Act and without bond, and, of course, since appellees had no right to the issuance of an injunction under the Moratorium Act and without bond, the injunction was void.

OPINION

Ethridge, P. J.

The appellees filed a bill in the chancery court of Pearl River county, alleging that they were the owners of certain land in that county on which the Federal Land Bank of New Orleans held a deed of trust executed by appellees on June 16, 1924 to secure an indebtedness to be paid in thirty-five annual installments; that they paid all of the installments up to and including that due December 15, 1929, and they paid all taxes on said land up to and including the year 1930, but had made default in the payment of the installments and taxes on account of the financial depression. They further alleged that Congress, in an effort to lift the country out of said depression, has enacted various statutes to aid distressed farmers, and that they had applied to the Farm Credit Administration for a loan for the purpose of refinancing their indebtedness to the Federal Land Bank, but that said bank had refused to accept the terms offered by the Commissioner of the Farm Credit Administration, and the appellees were unable to refinance their indebtedness through any agency or instrumentality of the government. They then proceeded to invoke chapter 247 of the Laws of Mississippi of 1934, commonly called the "Moratorium Law," and averred that they were willing for the court to hear evidence as to the value of the property and enter such orders as might be proper under such law; that the Federal Land Bank was not an agency, department, bureau, board, or commission of the United States; and prayed for a preliminary injunction restraining the foreclosure of the deed of trust, and that the court make all proper orders in the case. The bill was presented to the circuit judge, who indorsed thereon his fiat directing the chancery clerk to issue the injunction prayed for and expressly stipulating that no bond be required. The injunction writ was issued and served upon the appellant. The appellant demurred to the bill assigning, among other things, that there was no equity on the face of the bill, and that...