Standard Lumber & Mfg. Co. v. Deposit Guaranty Bank & Trust Co

• Decision Date: 12 February 1934
• Docket Number: 31050
• Citation: 169 Miss. 120,152 So. 639
• Parties: STANDARD LUMBER & MFG. CO. et al. v. DEPOSIT GUARANTY BANK & TRUST CO
• Court: Mississippi Supreme Court

152 So. 639

169 Miss. 120

STANDARD LUMBER & MFG. CO. et al. v. DEPOSIT GUARANTY BANK & TRUST CO

No. 31050

Supreme Court of Mississippi

February 12, 1934

Division A

1. REFORMATION OF INSTRUMENTS.

Decree ordering correction of description of land in deed of trust being foreclosed held not erroneous as eliminating from deed of trust description of other property (Code 1930, sections 457-466).

2. CHATTEL MORTGAGES.

Deed of trust held not void because there was included therein material on hand, where there was no reservation in deed of trust by grantee as to disposition of material in course of business.

3 MORTGAGES. Evidence held to show that upset price for mortgaged premises fixed by court in foreclosure suit was reasonable, and that higher price could not be had on resale (Code 1930, sections 457-466).

Evidence disclosed that the property was in disrepair and was deteriorating; that the opinions of witnesses as to value of property varied from thirteen thousand five hundred dollars to in excess of thirty thousand dollars, and the court fixed the price as fourteen thousand dollars.

4 MORTGAGES.

Supreme Court cannot disturb finding of fact of chancellor in foreclosure suit respecting value of mortgaged premises unless finding is manifestly wrong.

5. MORTGAGES.

Emergency because of financial depression alone cannot be set up to hinder and delay mortgagee in his legal and contractual rights.

6. MORTGAGES.

That property sold under foreclosure suit might sell for much more at later time will not afford ground in equity for setting aside sale (Code 1930, sections 457-466).

HON. V. J. STRICKER, Chancellor.

APPEAL from chancery court of Hinds county, HON. V. J. STRICKER, Chancellor.

Bill by the Deposit Guaranty & Trust Company against the Standard Lumber & Manufacturing Company and others, wherein named defendant filed cross-bill. From a decree, defendants appeal. Affirmed.

Affirmed.

Green, Green & Jackson, of Jackson, for appellants.

No foreclosure decree should have been entered during the present national emergency without adequate protection of the public and recognition of mortgagor's equity.

Atchison, Topeka, etc., R. v. United States, 284 U.S. 248, 260, 76 L.Ed. 273, 280; United Shoe Stores Co. v. Burt, 142 So. 370; City v. Collins, 13 P.2d 912; Suring State Bank v. Giese (Wis.), 246 N.W. 556; Funk v. United States, 78 L. Ed.; Federal Title, etc., Co. v. Lowenstein (N. J.), 166 A. 541; Baader v. Mascellino (N. J.), 166 A. 467; Bank of Manhattan v. Ellda Corp., 265 N.Y.S. 116; Yale Law Journal, June, 1933, p. 1236, April, 1933, p. 960; Columbia Law Review, April, 1933, p. 744; Harvard Law Review, May, 1933, Moratorii Legislation; American Bar Association Journal, May, 1933, p. 277; Blaisdell v. Home Bldg. & Loan Assn., 86 A. L. R. 1507; Lingo Lbr. Co. v. Hayes, 64 S.W.2d 840; Note 9 A. L. R. 11; People ex rel. v. La Fetra, 230 N.Y. 429, 130 N.E. 601, 16 A. L. R. 152; Sliosberg v. New York L. Ins. Co., 244 N.Y. 482, 155 N.E. 749; Chadwick v. Moore, 8 Watts & S. (Pa.) 49; Von Baumbach v. Bade, 9 Wis. 559; Holding Company v. Feldman, 256 U.S. 170, 65 L.Ed. 877; Zimmerman v. Gibbs, 78 L.Ed. 191; Sneedon v. Marion, 64 F.2d 721; Daly Bros., Inc., v. Hickman, S.Ct. of District of Columbia; National Industrial Recovery Act, 15 U.S.C. A., sec. 702; Agricultural Adjustment Act, 7 U.S.C. A., sec. 601; Bank Conservation Act, 12 U.S.C. A., sec. 211; Wall v. Parrot Silver & C. Co., 244 U.S. 407, 61 L.Ed. 1229; Michigan Trust Co. v. Cody, 264 Mich. 258, 249 N.E. 844.

Reformation improperly granted by exclusion of "all improvements, buildings, equipment, machinery and raw material used and connected with the plant and on said property." Said mortgage covering raw materials consumable in the use, whereof disposition was left in the mortgagor, manufacturer, is void.

Simmons v. State, 135 So. 196, 160 Miss. 582; Coffeeville Bank v. Stone, 118 So. 413, 151 Miss. 580; Oil Company v. Carr, 97 Miss. 234, 52 So. 353; Andrews v. Partee, 79 Miss. 80, 29 So. 788; Barden v. Criswell, 63 Miss. 394; Bank v. Goodbar, 73 Miss. 566, 19 So. 204.

No right to reformation is shown.

Harrington v. Harrington, 2 How. 701; Mosby v. Wall, 23 Miss. 81, 55 Am. Dec. 71; Dunbar v. Newman, 46 Miss. 231; Crafton v. Bldg. & Loan Assn., 77 Miss. 166, 26 So. 362; Jones v. Jones, 88 Miss. 784, 41 So. 373; Watson v. Owen, 142 Miss. 676, 107 So. 866; Insurance Co. v. McQuaid, 114 Miss. 430, 75 So. 257.

The commissioner, notwithstanding the provision of the decree eliminated raw materials, sold raw materials, and the sale so selling, contrary to reformation decree, should be vacated.

McNeill v. Lee, 79 Miss. 455; Griffith's Chancery Practice, sec. 625, et seq.; 41 C. J. 475; Brown v. Nevitt, 27 Miss. 814; Champlin v. McLeod, 53 Miss. 484; Worthington v. Wilmot, 59 Miss. 611; Georgia, etc., v. Walker, 61 Miss. 481; Sivley v. Summers, 57 Miss. 730.

R. B. Ricketts and Barron C. Ricketts, both of Jackson, for appellee.

Mere inadequacy of price is not sufficient to set aside a contract unless it is so gross as to furnish evidence of fraud; there must be an inequality so strong, gross and manifest that it must be impossible to state it to a man of common sense without producing an exclamation as to the inequality of it.

Weyburn v. Watkins, 90 Miss. 728, 44 So. 145; Newman v. Meek, Freem. Ch. 441; Hesdorffer v. Welch, 127 Miss. 261, 90 So. 3; 8 A. L. R. 1001; So. Grocery Co. et al. v. Merchants & P. Title & Invest. Co., 54 S.W.2d 980; Federal Land Bank v. Vineyard et al., 63 S.W.2d 840; Federal Land Bank v. Floyd, 61 S.W.2d 449; Lincoln Safe Deposit Co. v. Carlson, 250 N.W. 236; Lemere v. White, 241 N.W. 105; Wallace v. Clements et al., 248 N.W. 58; Nelsen v. Doll et ux, 247 N.W. 44; Crews v. Alberts et al., 247 N.W. 602; Bothwell v. Godfrey et al., 168 A. 287; Griffith, Mississippi Chancery Practice, section 657; 19 R. C. L. 584.

In the present case the debt was long past due, the security of the bank was both depreciating in value and subject to increasing burdens of taxes and insurance charges. The proceedings in the chancery court were characterized by no sort of haste.

The reformation of the instrument involved in this case conforms strictly to what appellant supposes is correct. The decree reforming the instrument, the deed of trust, says nothing about any change in same so far as it purported to affect raw material but, as clearly appears from the decree itself, attempts to change and reform "the description of land" in the two subdivisions parts of which are involved. Otherwise and as to other property the deed of trust is not changed.

Barwick v. Moyse, 21 So. 238; Hitchler v. Citizens Bank, 63 Miss. 403.

It is submitted that the right of the Deposit Guaranty Bank & Trust Company to have the description of land in the deed of trust in question reformed and corrected is self evident and is, to all intents and purposes, admitted in the pleadings filed for the appellant.

Howie & Howie, of Jackson, for appellee.

The chancellor certainly had a right and should have considered that where there was no hope of any future ability to either operate the plant and make funds with which to take care of the indebtedness, or interest on the indebtedness or taxes and insurance on the property, certainly there could be no reason for further delaying the sale of the property and thus prevent increasing liabilities and deterioration of the property.

Bolich v. Prudential Ins. Co., 82 A. L. R. 974, 202 N.C. 789, 164 S.E. 335.

There is no testimony before this court either in the record or elsewhere, tending to show that there was any agreement by and between the bank and the lumber company for the lumber company to sell and dispose of the raw material. This being true then it follows that the provisions of the deed of trust are binding upon the parties, there being no oral agreement to the contrary.

Baldwin v. Little, 8 So. 168, 64 Miss. 126.

It has been held that where a person makes a conveyance of land, which is defective by reason of a wrong description of the premises, the lien of a judgment against the grantor subsequent to the conveyance and prior to the reformation of the deed will not attach to the lands.

34 C. J. 607.

Argued orally by Garner Green, for appellant, and by J. H. Howie and Barron C. Ricketts, for appellee.

OPINION

McGowen, J.

The Deposit Guaranty Bank & Trust Company exhibited its bill against the Standard Lumber & Manufacturing Company, J. A. Roell, and F. O. Cambre, which sought a reformation of a deed of trust executed by the lumber company in favor of the bank to secure a note; the note was indorsed by the two individuals, Roell and Cambre. The bill prayed for a decree of foreclosure and a sale of the manufacturing plant and property described in the deed of trust by a commissioner of the chancery court, making the deed of trust and the note exhibits to the bill. The note was long overdue, and the contract provided for foreclosure in the usual terms found in the average deed of trust, unnecessary here to detail.

The answer of the lumber company admitted the execution of the note, but denied that the amount due thereunder was twenty thousand twenty-one dollars and seventy-eight cents. It admitted that a description of certain real estate was a mistake, and alleged that the property was worth, in normal times, fifty thousand dollars, but that, due to the wide-spread acute depression, it would be impossible to sell the property for anything like its true value, and alleged that, if it was held for a period of time, it would return to normal value. The answer averred that it was the duty of the court of equity, on account of the existing world-wide depression, to fix an upset price,...