Wilson Banking Co. Liquidating Corp. v. Colvard

• Decision Date: 22 April 1935
• Docket Number: 31602
• Citation: 161 So. 123,172 Miss. 804
• Court: Mississippi Supreme Court
• Parties: WILSON BANKING CO. LIQUIDATING CORPORATION et al. v. COLVARD

161 So. 123

172 Miss. 804

WILSON BANKING CO. LIQUIDATING CORPORATION et al. v. COLVARD

No. 31602

Supreme Court of Mississippi

April 22, 1935

APPEAL from chancery court of Leflore county, HON R. E. JACKSON, Chancellor.

(In Banc.)

1. CONSTITUTION LAW.

State has right, in exercise of its police power, to give temporary relief from enforcement of contract when urgent public need produced by economic causes demands such relief, provided relief afforded is of character appropriate to emergency and is granted upon reasonable conditions, and it is always open to judicial inquiry whether emergency still exists upon which continued operation of such law depends.

2. CONSTITUTIONAL LAW.

In determining constitutionality of law authorizing postponement of mortgage foreclosure sales and extension of time for redemption from such sales with certain limitations legislative declaration of existence of serious public emergency and its recitals of conditions in the state in April, 1934, held entitled to great weight (Laws 1934 chapter 247).

3 EVIDENCE.

It is common knowledge that during several years immediately preceding April, 1934, land values in state, and particularly in Mississippi Delta, had shrunk enormously, and loans made on basis of values existing several years before could not be refinanced on basis of values then existing.

4. EVIDENCE.

It is common knowledge that movements have recently been in progress throughout state to raise funds by private subscriptions to supplement governmental funds provided for direct relief; that many counties and municipalities have announced their inability to provide for their needy without government aid, and that there is in prospect early extraordinary session of state Legislature to make appropriations to supplement funds provided by federal government for relief in state during 1935.

5. CONSTITUTIONAL LAW.

Act authorizing postponement of mortgage foreclosure sales and extension of time for redemption from such sales with certain limitations held not violative of federal Constitution prohibiting impairment of obligations of contracts (Laws 1934, chapter 247; Const. U.S. art. 1, section 10, clause 1).

6. COURTS.

Decisions of Supreme Court of United States construing pro visions of federal Constitution are not binding on state court in construing similar provisions of state Constitution.

7. COURTS.

Supreme Court will not declare that act, which does not contravene contract clause of federal Constitution, does violate identical provision of state Constitution unless compelled to do so by reason of prior decisions of state court construing such provision (Const. Miss. 1890, section 16; Const. U.S., article 1, section 10, clause 1).

8. CONSTITUTIONAL LAW.

Act authorizing postponement of mortgage foreclosure sales and extension of time for redemption from such sales with certain limitations safeguarding rights of mortgagees held not violative of state Constitution providing that laws impairing obligations of contracts shall not be passed (Laws 1934, chapter 247; Const. Miss. 1890, section 16).

9. MORTGAGES.

Holders of deed of trust could not complain of delay in fixing benefits to be paid by mortgagor under act providing for post ponement of mortgage foreclosure sales, where holders moved for dissolution of injunction restraining foreclosure sale on ground that act was unconstitutional without claiming benefits under act which are properly determinable on final hearing (Laws 1934, chapter 247; Const. Miss. 1890, section 16; Const. U.S., article 1, section 10, clause 1).

ANDERSON, J., dissenting.

HON. R. E. JACKSON, Chancellor.

APPEAL from chancery court of Leflore county, HON. R. E. JACKSON, Chancellor.

Bill by M. W. Colvard against the Wilson Banking Company Liquidating Corporation and others. From a decree, defendants appeal. Affirmed and remanded.

Affirmed and remanded.

Ward Allen, of Greenwood, for appellant.

The Supreme Court of the United States by a five to four decision held the Minnesota mortgage moratorium law to be constitutional under the conditions and within the limits indicated.

Home Building & Loan Association v. Blaisdell et al., 290 U.S. 398-483, 78 L.Ed. 413.

The court also decided that while the declaration by the legislature as to the existence of the emergency was entitled to great respect, it was not conclusive; and, further, that a law "depending upon the existence of an emergency or other certain state of facts to uphold it may cease to operate if the emergency ceases or the facts change even though valid when passed." It is always open to judicial inquiry whether the exigency still exists upon which the continued operation of the law depends.

Chastleton Corp. v. Sinclair, 264 U.S. 543, 547, 548, 68 L.Ed. 841-4, 44 S.Ct. 405.

One of the principal contentions which we make in this cause is that even though the Minnesota law has been held constitutional by the Supreme Court of the United States, within the limits of the Blaisdell case, still the Minnesota law was approved on April 18, 1933, and the hearing in the Blaisdell case was had only a very few days thereafter, and that the conditions which existed in Mississippi on April 4, 1934, the date of the adoption of the Mississippi moratorium law, and again on the 8th day of October, 1934, which was the date of the granting of the injunction in this cause, were so improved and so entirely different from the conditions which existed in April, 1933, that the Mississippi law was unconstitutional at the time it was adopted, and if not then it had certainly ceased to be valid by October, 1934.

The emergency under which the Minnesota law was held constitutional had passed.

We are suspicious that this court has judicial knowledge of enough facts to cause it to hold the Mississippi moratorium law invalid in October, 1934, without the necessity of presenting any evidence to the court below, but to be sure of our ground we have introduced facts and figures and say again that if our mortgage cannot be foreclosed under conditions which existed in October, 1934, then we just have no mortgage at all.

The injunction was granted on October 8, 1934, without notice and without bond. No attempt was ever made by the mortgagor to have the chancellor fix the rent or other compensation to which the mortgagee is unconditionally entitled to under the act, and we think this is mandatory.

Our conception of Section 3 is that if a mortgagor enjoins a foreclosure thereunder, he should either give notice or upon a very short day bring about a hearing, at which the court would be asked upon the initiative of the mortgagor to fix the mortgagee's compensation.

10 R. C. L., Estoppel, page 836.

H. C. Mounger, of Greenwood, for appellee.

The act itself recites that severe financial and economic depression has existed for several years past and has resulted in extremely low prices, etc.

According to the legislature the emergency existed.

If state power exists to give temporary relief from the enforcement of contracts in the presence of disaster due to physical causes such as fire, flood or earthquakes, that power cannot be said to be non-existent when the urgent public need demanding such relief is produced by other and economic causes.

Home Bldg. & Loan Assn. v. Blaisdell, 78 U. S. L.Ed. 255; 88 A.L.R. 1496.

The second assignment of errors is that even if the statute was constitutional when adopted, it became invalid at the time of the granting of the injunction.

This was a question as to which the court below took judicial notice. The court was familiar with conditions generally in his district. There had been no change to amount to anything. While much evidence was taken by the appellant as to bank deposits, the court said that the banks were not making loans on real estate, and the evidence showed that.

Even if stocks and bonds fluctuate and go up occasionally that does not reflect the condition of things in this state. We have no stocks and bonds. It is not worth while to go into all the figures for they do not show anything.

The third assignment of error is that no compensation rent, or other remuneration, was awarded the appellant in the court below.

In answer to that we will say that the appellant did not ask for any. Neither in his answer did he ask for any nor did he in open court. There is nothing in his answer asking for rent, or saying a word about rent. We offered to do anything that the court required, and took testimony about rental value.

The statute does not provide for notice. It provides that the party may make application to the Chancellor and obtain an injunction, and precedent to the granting of the injunction it must appear that the party could not obtain a loan from the government agencies. This showing was made. No bond is required.

The injunction upon the showing about the application to the government agencies issues as a matter of course, and the party enjoined has a speedy remedy by a hearing in thirty days.

On the strength of the Blaisdell case this law does not violate either the state or the United States constitution.

Blaisdell case, 88 A.L.R. 1497; United States Mortgage Co. v. Matthews, 79 S.Ct. Advance Sheet No. 3, page 191.

If the injunction should now be dissolved the complainant would be denied any remedy under the statute. This would be asking the court virtually to repeal the statute.

Where there is a sharply controverted question of fact, an injunction should not be dissolved upon affidavit.

Citizens Bank & Trust Co. v. Harpeth, 120 Miss. 505, 82 So. 329; Jennings v. Shipira, 131 Miss. 596, 95 So. 305.

Argued orally by Ward Allen, for appellant, and by H. C. Mounger, for appellee.

Cook J., Anderson, J.,...