Manstream v. United States Dept. of Agriculture

• Decision Date: 04 September 1986
• Docket Number: 85-V-1074-S.,Civ. A. No. 81-109-S
• Citation: 649 F. Supp. 874
• Parties: David O. MANSTREAM and Carolyn H. Manstream, Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants. UNITED STATES of America, Plaintiff, v. David O. MANSTREAM and Carolyn H. Manstream, Defendants.
• Court: U.S. District Court — Middle District of Alabama

649 F. Supp. 874

David O. MANSTREAM and Carolyn H. Manstream, Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants.

UNITED STATES of America, Plaintiff, v. David O. MANSTREAM and Carolyn H. Manstream, Defendants.

Civ. A. Nos. 81-109-S, 85-V-1074-S.

United States District Court, M.D. Alabama, S.D.

September 4, 1986.

D. Broward Segrest, Asst. U.S. Atty., Montgomery, Ala., for U.S.

Manstream, pro se.

OPINION AND ORDER

VARNER, District Judge.

These cases are now before the Court upon the motion to dismiss and/or in the alternative motion for summary judgment filed on February 19, 1986 in Civil Action No. 81-109-S by the United States on behalf of all defendants; and, the motion for summary judgment filed on February 20, 1986 in Civil Action No. 85-V-1074-S by the United States.

These cases were consolidated by order of this Court entered on the 7th day of October 1985. The motions were set for hearing on March 27, 1986 at 9:00 a.m. in Montgomery, Alabama by orders of the Court entered on February 21, 1986.

The cases came on for hearing on March 27, 1986. The Manstreams did not appear for the hearing. The United States between the filing of its motions for summary judgment in the respective cases and the hearing date filed five affidavits in support of the motions. These affidavits are as follows: (1) affidavit of Malvin Laye, Assistant County Supervisor, Crenshaw County, Alabama in Civil Action No. 81-109-S; (2) the affidavit of Dale N. Richey, State Director, Farmers Home Administration, in Civil Action No. 81-109-S; (3) the affidavit of Ronald D. Wyatt, County Supervisor, Farmers Home Administration, Geneva County, Alabama in Case No. 85-V-1074-S; (4) the affidavit of James H. Ozment, Housing Loan Specialist, State Office, Farmers Home Administration, in Civil Action Nos. 81-109-S and 85-V-1074-S; (5) the affidavit of Rufus Sirmon, former Acting Chief of Rural Housing in the Alabama Farmers Home Administration State Office in Civil Action No. 81-109-S and Civil Action No. 85-V-1074-S. The United States also filed a memorandum in support of motion to dismiss and/or motion for summary judgment in Civil Action No. 81-109-S. The Manstreams did not file any affidavits or other documents in opposition to the motions for summary judgment.

The origin of these two cases is the making of a rural housing loan by the United States of America acting through the Farmers Home Administration, United States Department of Agriculture (hereinafter referred to as United States) to David O. Manstream and Carolyn H. Manstream (hereinafter referred to as Manstreams) pursuant to § 502 of the Housing Act of 1949, 42 U.S.C. § 1472 (1982).

On May 6, 1977 the Manstreams executed and delivered to the United States a promissory note in the principal amount of $18,800.00 with interest thereon at 8% per annum. In this note the Manstreams agreed to pay the principal and interest in 396 installments of $136.00 per month beginning June 6, 1977 and $136.00 thereafter on the sixth day of each month until the principal and interest was fully paid.

On May 6, 1977 in order to secure said indebtedness the Manstreams executed and delivered to the United States a real estate mortgage on the following described real property situated in Geneva County, Alabama:

Lot 5, Block B of Twin Lakes Subdivision being in the Northeast quarter of Southwest one quarter, Section 21, Township 2 North, Range 20 East in Samson, Alabama, as shown on map and plat of same recorded in Plat Book 1, Page 125 in the Probate Office, Geneva County, Alabama.

The mortgage which was duly recorded in mortgage book 49, at pages 549-552 in the Office of the Judge of Probate, Geneva County, Alabama contained the following provisions:

"(17) SHOULD DEFAULT occur in the performance or discharge of any obligation in this instrument or secured by this instrument, or should any one of the parties named as borrower die or be declared an incompetent, a bankrupt, or an insolvent, or make an assignment for the benefit of creditors, the Government, at its option, with or without notice, may: (a) declare the entire amount unpaid under the note and any indebtedness to the Government hereby secured immediately due and payable, (b) for the account of Borrower incur and pay reasonable expenses for repair or maintenance of and take possession of, operate or rent the property, (c) upon application by it and production of this instrument, without other evidence and without notice of hearing of said application, have a receivor appointed for the property, with the usual powers of receivors in like cases, (d) foreclose this instrument as provided herein or by law, and (e) enforce any and all other rights and remedies provided herein or by present or future law. (emphasis added)

(23) Upon default by the borrower as aforesaid, the Government and its assigns may take possession of the property and foreclose this mortgage by sale to the highest bidder, for cash, at the courthouse door of any county in which all or a part of the property is situated, after advertising the time, place and terms of sale once a week for three successive weeks in a newspaper of general circulation in each county in which a portion of the property is situated."

The plaintiff, United States of America, because of the Manstreams' failure to make the monthly payments as agreed, in March 1981 accelerated said indebtedness, declared the entire amount under the note due and payable; and on the 3rd day of September 1981 foreclosed said mortgage pursuant to the power of sale contained in the mortgage. The property securing said indebtedness was bought in at the foreclosure sale by the United States of America, Farmers Home Administration, for the sum of $24,000.00, said sum being the highest price bid. On the 14th day of September, 1981 a deed of foreclosure was executed by William E. Somerall, Acting State Director for Alabama, Farmers Home Administration, United States Department of Agriculture, acting on behalf of the United States of America, mortgagee, and as attorney in fact for David O. Manstream and Carolyn H. Manstream, his wife. The foreclosure deed was made in favor of the United States of America. The foreclosure deed was duly recorded in the Office of the Judge of Probate, Geneva County, Alabama in Deed Book 38 at pages 495-497 on the 30th day of September 1981.

On September 22, 1981 the United States of America acting through the United States Department of Agriculture, Farmers Home Administration, sent defendants a letter demanding, in accordance with Section 6-5-233, Code of Alabama 1975, that they surrender and deliver possession of said property to the United States of America within ten days. The defendants have refused to this date to surrender possession of said premises. The Manstreams on October 2, 1981 filed a case styled David O. Manstream and Carolyn H. Manstream, plaintiffs, v. United States Department of Agriculture, et al., Civil Action No. 81-109-S. The pleading was entitled "COMPLAINT AND PETITION FOR RESTRAINING ORDER". This court denied the petition for temporary restraining order on October 6, 1981, and dismissed the complaint on February 26, 1981. The Manstreams filed an appeal to the Eleventh Circuit Court of Appeals on March 18, 1982.

On November 15, 1983 the Eleventh Circuit Court of Appeals vacated the judgment of this court dismissing the complaint under Federal Rule of Civil Procedure 12(b)(6), and remanded the case for further proceedings, 720 F.2d 1292, in view of the decision of the Supreme Court in Block v. Neal, 460 U.S. 289, 103 S.Ct. 1089, 75 L.Ed.2d 67 (1983). Following the remand to this court the case was reinstated on the active docket.

In paragraph 3 of their complaint in Civil Action 81-109-S the Manstreams claim:

"3. Plaintiffs aver that between May 6, 1977, and May 18, 1977, upon moving into said residence, that the plaintiffs discovered numerous substantial defects in their dwelling, all or most of which would or should have been discovered by any kind of reasonable inspection. Plaintiffs aver that a complete list of said defects is contained in the exhibits attached hereto, that some of said major defects included the house being built off the slab and that there were no brick ties affixing the brick veneer to the wooden walls; substantial plumbing leaks, and others more fully set forth in the exhibits attached hereto. Plaintiffs aver these defects were immediately brought to the attention of the defendants and that both plaintiffs and defendants sought to have said contractor correct the same, all to no avail."

In paragraph 4 of their complaint plaintiffs claimed:

"4. Plaintiffs aver that on or about May 18, 1977, it was discovered that Tommy Aplin had falsified his affidavit to the defendants that all labor and materials put into said dwelling had been paid for and that on or about May 18, 1977, mechanics and materialman's liens were filed against the above-described property in the approximately sum of $6500.00. Plaintiffs aver these liens are still of record in the Office of the Judge of Probate of Houston County, Alabama but that to the Plaintiffs' best knowledge, no suit was ever filed thereon to enforce the same by said lienholders. (Documents) attached to the Manstreams' complaint show that the liens were filed in the Office of the Judge of Probate Geneva County, Alabama."

The Manstreams, in their original complaint as amended on December 1, 1981 to add the United States as a party defendant, sought the following relief: (1) in paragraph 18 an order requiring the defendants to correct said defects in accordance with their regulations, (2) in paragraph 20 an order permanently enjoining the defendants from evicting them from their residence and that the defendants' foreclosure of said mortgage be set aside, (3) in paragraph 21 damages in an amount to be determined by the court, (4) in paragraph 22 an award of attorney's fees, (5) in ...