Opinion
No. 32728.
May 3, 1937.
1. MORTGAGES.
Provision of moratorium law entitling mortgagee to final decree of sale on satisfactory showing that default has occurred in payment of fixed carrying charges is for benefit of mortgagee alone, but does not require that he shall avail of his rights under trust deed by sale in court proceedings (Laws 1934, chap. 247, secs. 4, 5).
2. MORTGAGES.
Where mortgagor under deed of trust had obtained benefits of moratorium law by enjoining foreclosure in pais and had been in default for more than thirty days in payment of fixed carrying charges, mortgagor had right to apply for final decree of sale of mortgaged premises or to apply for dismissal of bill of complaint, thereby remitting him to right of foreclosure in pais (Laws 1934, chap. 247, secs. 4, 5).
APPEAL from chancery court of Pearl River county. HON. BEN STEVENS, Chancellor.
J.M. Morse, of Poplarville, for appellant.
Upon a casual examination of the statute, the court can see that when the court has once assumed jurisdiction then the sale must be made under the direction of the court.
The court should, under the law, have ordered that the property be sold but when he dismissed the suit he put the appellant back in the same shape she was prior to the issuing of the injunction.
This is a statutory matter, the statute plainly sets out the procedure appellee must follow before they can foreclose, must follow the statute. The chancellor must order a final decree of sale.
Parker Shivers, of Poplarville, for appellees.
The dissolution of the injunction of the chancellor was in full compliance with the provisions of the moratorium law, and of course the decree dissolving the injunction authorized the sale of the property by the trustee, and appellant is in no way prejudiced by the fact that when the injunction was dissolved, the trustee was authorized to proceed with the said sale.
And she cannot complain of the mere fact that the chancellor did not say in his decree that the trustee was authorized to proceed to sell the property.
The trust deed itself authorized a sale by the trustee, and it could not affect the appellant in any way because the decree itself failed to specifically authorize the trustee to make the sale.
We respectfully submit that the decree of the court dissolving the injunction, and thereby authorizing the sale of the property, was absolutely justified by all of the facts in the case, and was required by the terms of the moratorium law, and that, therefore, this case ought to be affirmed by the Supreme Court.
On the 14th day of November, 1931, the appellant, Mrs. Clara W. Nolan, borrowed from the appellee the sum of $3,542.63, payable six months after date, and secured the same by a deed of trust on real estate. No part of this indebtedness was paid, and the appellee was required to pay the taxes and insurance on the property covered by the deed of trust; and, on April 10, 1935, at a time when the indebtedness — then amounting to about $5,000 — was long past due, the trustee in the deed of trust, at the request of appellee, advertised the property for sale under the terms of the deed of trust.
Thereafter the appellant enjoined the sale under the provisions of the moratorium law then in force, being chapter 247, Laws of 1934. Appellee answered the bill of complaint and set up that, by reason of the accumulation of interest and the payment by him of the taxes and insurance on the property, the indebtedness had been increased to approximately $5,000, and that nothing had ever been paid on the indebtedness, although it was several years past due, and prayed that the court should fix a reasonable rental value of the property, as provided under section 4, chapter 247, Laws of 1934, and require the appellant to pay the same toward the payment of taxes, insurance, and interest on the mortgage debt, at such times and in such manner as appeared to the court to be under the circumstances reasonable and equitable.
On the 22nd day of October, 1935, by agreement of the parties, a decree was entered by the court fixing the sum of $20 per month as a reasonable amount to be paid by the appellant to appellee, to be applied toward the payment of taxes and insurance on the property, and the interest accruing on the indebtedness, the payments to be made on the fifteenth day of each month thereafter.
On the 13th day of January, 1936, appellee filed a petition averring that no payments had been made in accordance with the requirements of the former decree of the court and that additional taxes and insurance premiums on the property were due, and praying that the injunction be dissolved and the appellee authorized to proceed with the sale of the property under the terms of the deed of trust. There was no final action on this petition until the following October, when a final decree was entered adjudging that the appellant had failed to comply with the terms of the former decree fixing the reasonable monthly payment to be made and that more than sixty days had elapsed since any payment had been made, and dissolving the injunction and finally dismissing the cause. From this decree, this appeal was prosecuted, and a reversal is sought on the sole ground that the court erred in not ordering a sale of the property under the direction of the court instead of dismissing the cause and remitting the appellee to the remedy of a foreclosure in pais.
Section 4 of chapter 247, Laws of 1934, provides for fixing reasonable carrying charges to be paid to the mortgagee upon the stay of foreclosure proceedings, and section 5 of said act provides that, "If the mortgagor or owner of the mortgaged premises, or other interested person for whose relief this statute is enacted, shall make default in the carrying charge payments, or any of them, required in the order mentioned in the foregoing section, or shall commit any waste, his or her right to a further postponement of a final sale shall terminate thirty days after such default, and the mortgagee or trustee or other persons having the right to foreclose, shall thereupon be entitled to apply to the court in term time or vacation for a final decree of sale upon a satisfactory showing to the court that the default aforesaid has occurred."
This provision terminating the right of a mortgagor to a further postponement of a sale of the mortgaged property after default of thirty days in the payment of the fixed carrying charges, and entitling the mortgagee to a final decree of sale upon a satisfactory showing that such default has occurred, is for the benefit of the mortgagee alone; but it does not require that he shall avail of his rights under the mortgage or deed of trust by a sale in the court proceedings. Upon the proper showing of default in the payment of the fixed carrying charges, the injunction staying the foreclosure should be dissolved, and if the proceedings have been initiated by the mortgagee, owner, holder, or trustee, by a bill in chancery, he may abandon the effort to foreclose by dismissing the bill of complaint, or he may apply for a final decree of sale of the mortgaged property. After a mortgagor who has availed of the benefits of this act by enjoining a foreclosure in pais has been in default for more than thirty days in the payment of the fixed carrying charges, his rights under the act are ended; and upon the dissolution of the injunction after such default, the mortgagee may apply for a final decree of sale of the mortgaged premises, or he may apply for a dismissal of the bill of complaint, thereby remitting him to his right to foreclosure in pais. The prayer of the mortgagee's petition herein was that he be authorized and permitted to proceed with the sale in accordance with the terms of the deed of trust, and no error was committed in finally dismissing the bill of complaint.
Affirmed.