Opinion
No. 33393.
November 21, 1938.
1. MORTGAGES.
An injunction against foreclosure sale under deed of trust would not issue under mortgage moratorium statute without the requirement of a bond, merely on allegations to the effect that mortgagee was not in fact entitled to foreclose, in absence of the allegations required by statute concerning attempts to refinance through government agencies, especially where the mortgagee was a Federal Land Bank (Laws 1934, ch. 247, sec. 14).
2. BANKS AND BANKING.
Mortgagors who acquiesced in the disbursement of most of the proceeds of Federal land bank loan through the agency of the local National Farm Loan Assocation could not deny the authority of local association's secretary to receive and disburse a particular check involving part of the proceeds, even though disputing genuineness of the indorsements by mortgagor and her attorney on such checks.
3. MORTGAGES.
In suit to enjoin foreclosure sale under trust deed, mortgagors had burden of proving that they had made payments which were not duly credited on the account filed by mortgagee as an exhibit to its answer under oath.
4. MORTGAGES.
In mortgagors' suit to enjoin foreclosure sale under deed of trust on ground that mortgagors did not receive proper credit for payment, and that mortgagee applied fire insurance proceeds to the loan, contrary to agreement that such proceeds should be paid to mortgagors, evidence held not to establish sufficient credits to authorize granting of injunction (Laws 1934, ch. 247, sec. 14).
APPEAL from the chancery court of Walthall county; HON. R.W. CUTRER, Chancellor.
W.L. Pack, Jr., and T.H. Hedgepeth, both of New Orleans, La., for appellant.
The burden of proving payment is always upon the party alleging it.
Greenburg v. Sauls Bros., 91 Miss. 410, 45 So. 569; Stewart v. Graham, 93 Miss. 251, 46 So. 245.
Moreover, we call the court's attention to the fact that the bill of complaint in this case did not waive answer under oath, and as the answer was properly sworn to by the bank it is evidence in the case.
Section 383, Code of 1930.
The making of the debt being admitted, the matter resolved itself into a simple process of calculation, and the statement introduced by the bank showed this calculation and showed the balance remaining due on the debt. Certainly, before the appellees are entitled to any reduction of the amount, they must show that the interest has been erroneously calculated or that some of the charges against the account are erroneous or that they have made payments for which credit has not been given. The appellees failed utterly to do any of these things, and, in fact, they made no serious attempt in that direction.
The appellees deny that they ever received the $200 withheld from the original disbursement of the loan proceeds pending the construction of a tenant house on the property. Our first response, and really the only necessary response, to this contention is that no issue whatsoever was raised in the pleadings as to whether the complainants had received the proceeds of the loan.
Griffith's Mississippi Chancery Practice, sec. 565.
Not only did the appellees' pleadings fail to put in issue the question as to whether they received the proceeds of the loan, but their pleadings admit, by inference at least, that everything was regular in the making of the loan and that the loan proceeds were received by them.
But even if the point had been raised in the pleadings, we submit that the facts and circumstances developed in the evidence show beyond question that these proceeds were properly and regularly disbursed to the appellees.
We recognize the rule that this court will not reverse the finding of a chancellor on a question of fact unless the finding is manifestly erroneous, but where this situation obtains the court does not hesitate to act.
Gillis v. Smith, 114 Miss. 665, 75 So. 451.
Breed O. Mounger, of Tylertown, for appellees.
It is considered that the sole questions raised by the appellant are predicated upon matters which are strictly questions of fact. By its brief, the appellant urges that the decree of the court below in reaching these conclusions of fact "is against the overwhelming weight of the evidence." The case in its entirety is essentially a case of accounting between the parties. It is wholly a question of fixing the amount of an indebtedness existent between the parties.
It is respectfully urged that the Chancellor in the court below heard and considered all the testimony and after hearing the same and the contentions of and accounting between the parties concluded and decreed that the indebtedness between the parties was the sum of $182.31. Certainly, it is not the contention of the appellant that the learned Chancellor in the court below would sit idly by, permitting the evidence to flow unnoticed before his eyes and come to a conclusion without consideration of the evidence and not warranted by the evidence, and thereupon reach an arbitrary conclusion of facts and figures, thus depriving the appellant of its property rights. The appellees urge that the amount found to be due to the appellant was ascertained by the Chancellor after mature consideration and is well founded in evidence.
Argued orally by W.L. Pack, Jr., for appellant, and by Breed O. Mounger, for appellee.
The appellees filed their bill of complaint in the chancery court of Walthall County in September, 1934, alleging that they had borrowed some money from the appellant on the 1st day of May, 1925, secured by a deed of trust on certain lands in said county; that they did not receive credit for the sum of $520 thereafter paid to the appellant on this indebtedness; and that a residence located on the property had been destroyed by fire, resulting in the payment of the insurance thereon in the sum of $900 to appellant by the fire insurance company; and further alleging that an agreement had been entered into between the parties whereby this insurance money was to be paid to appellees for the purpose of rebuilding the residence, but that the appellant failed to carry out the said agreement and this money "was applied on the loan and all payments were set up until the year 1939."
The bill of complaint further alleged that the appellant was at the time of the filing thereof engaged in foreclosing the security, and that the appellees would thereby suffer great loss and embarrassment; but that if the letter of their contract with the appellant was carried out by it the appellees would be in position to pay what they may owe; and wherefore, they prayed for an injunction to prevent the trustee from making the sale advertised for October 1, 1934.
On this bill of complaint the chancellor, on the following day after the filing thereof, caused the writ of injunction to be issued as prayed for, and provided in the order that no injunction bond would be required.
Presumably the injunction was attempted to be issued under the provisions of Chapter 247 of the Laws of 1934, known as the Moratorium Act, since there could have been no other authority for the issuance of a writ of injunction under the circumstances without the requirement of a bond. Moreover, it is provided in that act that precedent to the granting of an injunction against a foreclosure en pais it must affirmatively appear in the petition or complaint seeking such injunction that the petitioner was unable under Federal regulations to refinance his indebtedness through any agency or instrumentality of the United States Government, and that the creditor had refused to accept the terms of the refinancing offered or recommended by any agency of such Government, or it must be alleged that an application for such refinancing was then pending. The only material allegations of the bill of complaint on which the injunction was issued were those herein first stated, from which it clearly appears that no case was stated for the issuance of an injunction under the said Moratorium Act. Moreover, section 14 of the act exempted from its provisions any mortgage held by the United States or by any agency thereof, and it was held in the case of Federal Land Bank of New Orleans v. Tatum et al., 174 Miss. 264, 164 So. 319, that said bank was an agency of the United States within the meaning of said act. Thus it clearly appears that the issuance of the writ without the requirement of an injunction bond was done without authority of law.
A motion for the dissolution of the injunction was filed on October 26, 1934, and came on for hearing in vacation five days later when it was taken under advisement from time to time until the appellees were granted a decree on the 26th day of May 1936 allowing them to file an amended bill of complaint within sixty days thereafter. The amended bill set forth no cause for the original issuance or the continuance of the injunction in force in the absence of a bond given for that purpose. In the case of Federal Land Bank v. Lee et al., 174 Miss. 774, 165 So. 613, the court in responding to a suggestion that at a special session of the legislature subsequent to 1934 a new act had been passed making the Federal Land Bank subject to said Chapter 247, supra, said that, "we cannot take notice of this act because the rights of the parties are governed by conditions existing at the time the injunction was issued."
The amended bill of complaint sought an accounting from the appellant in regard to the indebtedness secured by the deed of trust, and alleged that they were not informed as to the amounts which they had paid thereon or as to the amount remaining due to the appellant, if any. Answer under oath was not waived. The appellant filed its answer under oath and made an exhibit thereto a statement of the debits and credits due in connection with the loan secured by the deed of trust in question. On the final hearing which was held on the 22d day of July, 1937, before final decree in February, 1938, it was contended by the appellees that they had fully paid the indebtedness, considering the application of the insurance money thereon, and that $200 of the money secured by the deed of trust here involved was never received by them, after being retained by the appellant pending the building of a tenant house on the land. It was shown however that credit had been given for all payments made on the loan and that there was a balance of $978.39 still due the appellant on said indebtedness as of the 1st day of October, 1936, when the accounting was rendered, provided the deferred portion of the loan was finally paid over to the appellees or to their authorized agent, the local National Farm Loan Association, at Magnolia, Mississippi, through which the application for the loan had been made by the appellees as members of such association. On this particular point, the proof disclosed without dispute that the appellant sent its check for this $200 to the said local National Farm Loan Association, payable to Mrs. Kittie Garner, one of the appellees and owner of the land, and to Thomas Mitchell, her attorney, and Dr. W.M. Wroten, Secretary and Treasurer of said association. This check was duly paid and bore as endorsements the names of the three payees hereinbefore mentioned. It was shown that this check was deposited, when so endorsed, to the credit of the said Dr. W.M. Wroten in a local bank at Magnolia, and the records of the bank disclosed that the amount was checked out by one check for $16.65 and another check for $183.35 given by the said Dr. W.M. Wroten against such account. At the time of the trial, Dr. W.M. Wroten had died and these cancelled checks could not be located. It was testified to by his son on behalf of the appellant that the check for $16.65 was to himself as a local insurance agent who had placed insurance in connection with the loan, and that the other check for $183.35 was delivered by him to the appellee J.C. Garner, husband of Mrs. Kittie Garner, who had made repeated visits to his office inquiring about the deferred portion of the loan prior to that time; that during the nearly ten years intervening since that time no further inquiry or complaint had been made. Appellees deny having received any money on the check last mentioned but the testimony of Dr. Wroten's son as to the delivery of the same to J.C. Garner was not specifically denied. Unless the appellees received the benefits of the $200 deferred portion of the loan, the only rational conclusion left to be reached would be that such proceeds were converted by Dr. W.M. Wroten or his son to their own use and benefit. The record in the case does not justify even a suspicion that the proceeds were so handled and we feel confident that the chancellor did not so infer. Moreover, the principal portion of the net proceeds of this loan, as well as those of a former loan, which had been increased by the one in question, had been sent to, and were admittedly disbursed through the agency of the local National Farm Loan Association without objection on the part of the appellees, and it is not permissible for them to now deny the authority of the secretary of such local association to receive and disburse the proceeds of the loans on their behalf, even though the genuineness of the endorsements on the checks are in dispute.
As to the plea of payment, the burden was on the appellees to prove that they had made payments which had not been duly credited on the account filed by appellant as an exhibit to its answer under oath. We do not think that they met this burden. On the other hand, we are of the opinion that every payment claimed to have been made was duly credited thereon leaving the balance due the appellant in the sum hereinbefore stated. It would unduly prolong this opinion to enter into a discussion of each charge and credit made on a former loan of $1,000 executed on May 15, 1920, and the loan here in question of $1,600, executed May 1, 1925, and which latter loan was an increased one to liquidate the first and supply the borrowers with additional funds, but we deem it sufficient to say that these loans bore 5 1/2% interest per annum on the thirty-five year amortization plan on which the Federal Land Bank loans are usually made, and that on November 1, 1920, appellees paid $32.92 on the first loan and $65 per annum in November from 1921 to 1924, inclusive, as the total payments made or claimed to have been made on the first loan prior to the execution of the second, leaving a balance of $969.57 due when the new loan was made, due to the fact that most of the annual payment made during the early life of the loan is applied to interest under such amortization plan. This balance was deducted from the proceeds of the new loan of $1,600, and thereafter the sum of $57.31 was paid on the new loan in November 1925, and the further sum of $104 annually from 1926 to 1930, inclusive (the last installment of $104, however, being made up of $81.92 paid by appellees at that time and the remainder being an interest adjustment made out of the proceeds of the insurance money) plus the application of the $900 insurance realized from a fire loss on February 29, 1930. Appellees point out no other credits to which they would be entitled. They paid nothing further after November 7, 1930, and neither have they paid any taxes since that time. Interest on delinquencies is charged at 8% per annum. There was an expense item in connection with the enjoined foreclosure sale. The court below rendered a decree in favor of appellant for only the taxes advanced by them amounting to $182.31, and perpetuated the injunction on payment thereof.
Upon a most careful examination of the record, we have reached the conclusion that the decree of the chancellor is not supported by the proof and that the injunction should have been dissolved and the indebtedness fixed at the sum claimed by the appellant, with a right to proceed with the foreclosure of the deed of trust in default of the payment thereof. It is so ordered.
Reversed and judgment here for the appellant.