First Trust Company of Lincoln v. Airdale Ranch & Cattle Company

• Decision Date: 08 July 1936
• Docket Number: 29682
• Citation: 268 N.W. 362,131 Neb. 475
• Parties: FIRST TRUST COMPANY OF LINCOLN, APPELLEE, v. AIRDALE RANCH & CATTLE COMPANY ET AL., APPELLANTS
• Court: Nebraska Supreme Court

268 N.W. 362

131 Neb. 475

FIRST TRUST COMPANY OF LINCOLN, APPELLEE, v. AIRDALE RANCH & CATTLE COMPANY ET AL., APPELLANTS

No. 29682

Supreme Court of Nebraska

July 8, 1936

APPEAL from the district court for Scotts Bluff county: GEORGE W IRWIN, JUDGE. Affirmed.

AFFIRMED.

Syllabus by the Court.

1. Where the evidence establishes that the amount of the mortgage lien exceeds the value of the land, good cause is shown for denial of moratory stay.

2. Unless necessary for the proper disposition of the pending case, constitutionality of a statute will not be passed upon.

3. Inadequacy of price alone is not ground for refusing confirmation, unless so great as to shock the conscience of the court or amount to evidence of fraud.

Appeal from District Court, Scotts Bluff County; George W. Irwin, Judge.

Action by the First Trust Company of Lincoln against the Airdale Ranch & Cattle Company, Charles Lee Kelsey, and others, to foreclose a real estate mortgage. Decree of foreclosure, and, from an order denying a moratorium and confirming the judicial sale, named defendants appeal.

Affirmed.

Neighbors & Coulter, for appellants.

Harry R. Ankeny, contra.

Heard before GOSS, C. J., ROSE, GOOD and DAY, JJ., and KROGER, District Judge.

OPINION

KROGER, District Judge.

This action was brought to foreclose a real estate mortgage on a ranch consisting of 9,240 acres of deeded land and a section of school land located in Banner and Scotts Bluff counties. The mortgage was executed in 1924 to secure a loan of $ 75,000 and was due in 1929, at which time the time of payment was extended to January 1, 1935. Defendants failed to pay the semiannual interest due July 1, 1932, and subsequent interest payments. Taxes for 1930 and subsequent years are unpaid. On July 2, 1934, a decree of foreclosure was entered, at which time the court found the amount due plaintiff on notes and mortgage to be $ 87,375, with interest at 10 per cent. per annum from that date. Prior to the entry of the decree, a receiver had been appointed to collect the rents and profits. On May 13, 1935, the property was sold on judicial sale for the sum of $ 40,100, subject to unpaid taxes of over $ 4,000. Before a confirmation of the sale was had, the owner of the equity of redemption applied for a moratorium staying further proceedings until March 1, 1937, under the Nebraska moratory act as amended by ch. 41, Laws 1935, and also filed objections to confirmation of the sale. Plaintiff objected to the granting of a moratorium on the ground that the defendants had no equity in the property over and above the liens against it, and on the further ground that the moratory act of 1935 was unconstitutional. From an order of the district court denying a moratorium and confirming the sale, defendants prosecute this appeal.

During the oral argument, counsel for defendants conceded that there was no equity in the property over and above the liens against it, but took the position that the moratory law was intended for the relief of debtors on notes secured by real estate mortgages as well as for the owners of real estate covered by mortgages; that the legislature intended to protect debtors against heavy deficiency judgments on such notes, and that the court erred in denying the moratorium on the ground that the defendants had no equity in the mortgaged real estate to protect, when the record discloses that a deficiency of about $ 50,000 will exist if the present sale is confirmed.

It was no doubt, the intention of the legislature to postpone the sale of real estate to satisfy mortgage indebtedness until the emergency created by the depression had passed, provided such postponement would...