269 N.W. 129 | Mich. | 1936
Lead Opinion
I cannot concur with the opinion of Mr. Justice WIEST to the full extent in which he has modified the moratorium order of the circuit judge. Since defendants' answer admits the defaults alleged in the bill of complaint, I can and do concur in that portion of Justice WIEST'S opinion which modifies the circuit judge's moratorium order by permitting plaintiff to proceed to the taking of a decree. Taking the decree will insure timely and final adjudication of the rights of the respective parties without appreciable extra burden of expense or prejudice to any of the parties litigant.
However, I cannot agree to that part of the modification wherein it is further provided that after taking the decree plaintiff herein may have a sale of the mortgaged property. As noted in Justice WIEST'S opinion the circuit judge found there is $200,000 equity in the property, and a more favorable situation in the immediate offing. Sale of the mortgaged property in regular course following the decree will necessitate substantial costs for service, advertising, and commissioner's fees. This will result in an unnecessary hardship in that it will burden the mortgagor or the mortgaged property with this extra expenditure prior to the expiration of the moratorium period; and further it will prevent the accomplishment of one of the purposes of moratorium legislation, i. e., temporary continuation of the status quo. Further, and of greater importance, immediate sale *167 deprives the mortgagor (or those standing in his place) of one of the principal benefits afforded by a moratorium, i. e., a sale of the property at a later date when it is expected that more favorable economic conditions will result in obtaining a better price for the mortgaged property.
"The purpose of this and other so-called moratorium statutes is to prevent the sacrifice of the real estate involved in mortgages and land contracts." Keys v. Hopper,
"The granting of relief under the mortgage moratorium act is a matter of discretion for the trial court and will be sustained unless an abuse of discretion is affirmatively shown. * * * The purpose of the moratorium act is to prevent valuable property from being sold at distress prices occasioned by an economic emergency, and give mortgagors a chance to preserve their equities." Youngs v. Burleson,
See, also, Detroit Trust Co. v. Slack,
It is not an answer nor an objection to say that sale at the expiration of the moratorium period, herein fixed by the court as March 1, 1937, will extend the time within which there may be redemption six months or more beyond such moratorium period. Surely the circuit judge who fixes the term of a moratorium is aware of this result; and if it is inequitable he can and should shorten the moratorium term accordingly. In the instant case the circuit *168 judge did not see fit to do so. Instead he decreed a moratorium to March 1, 1937. This record does not disclose an abuse of discretion. There should be no modification of the moratorium in this particular, especially in the face of the circuit judge's finding of "a more favorable situation in the offing."
The moratorium order of the circuit judge is modified, but only in accordance herewith. No costs are awarded.
FEAD, BUTZEL, BUSHNELL, SHARPE, and TOY, JJ., concurred with NORTH, C.J. POTTER, J., did not sit.
Dissenting Opinion
Plaintiff filed the bill herein to foreclose a mortgage on a recently constructed 14-story office building in the city of Pontiac. The mortgage was executed by defendants Kovinsky in July, 1928, for $500,000. In November, 1931, the mortgagors conveyed the premises, by warranty deed, to defendant Peoples State Building Company, a corporation. The mortgage being in default for nonpayment of stipulated instalments, interest and taxes the bill to foreclose was filed in August, 1935. Defendants appeared and, by answer, admitted all alleged defaults.
In March, 1936, defendant Peoples State Building Company filed a petition for moratorium relief and later, by amendment, defendant Jacob Kovinsky joined therein, and they asked that the foreclosure proceeding be continued to March 1, 1937. A hearing *165 was had upon the petition, testimony was taken and the foreclosure proceeding continued to March 1, 1937, and an order entered granting moratorium relief upon defendants paying $1,500 per month of the rental of the premises, to be applied by plaintiff on taxes theretofore or thereafter paid and required defendants to furnish plaintiff a monthly accounting of the net revenue from the operation of the building, with leave to plaintiff to file a petition for the excess of all net revenues over and above the operation costs should the same at any time exceed the rental fixed by the court.
This appeal is from that order, the claim being made that the amount now due under the mortgage, inclusive of principal, interest and taxes, exceeds the value of the property and no showing was made of any possibility of refinancing by defendants but only delay of rights of plaintiff.
Defendants claim there is a substantial equity above the sum due.
The court found $634,298.41 due on the mortgage for principal, interest and taxes; that the property has a value of upward of $200,000 in excess of the sum due and that the revenue from the property was ample for upkeep, tax requirements and some payment of interest, "with a more favorable situation in the immediate offing."
The case can be reasoned otherwise with some plausibility, but we are not prepared to hold the circuit judge abused discretion in granting the moratory relief. There was, however, no reason for staying hearing of the foreclosure suit and thereby postponing entry of decree until after March 1, 1937, with consequent delay thereafter in order to advertise sale and, after sale, the further period of right to redeem. *166
The stay of hearing and entry of decree should be vacated and plaintiff may proceed to hearing and, upon decree, may have sale, and then have the period of right of redemption run along with, but not supplant, the moratory relief.
No costs.
