Federal Farm Mortgage Corp. v. Cramb

290 N.W. 440, 137 Neb. 553, 1940 Neb. LEXIS 31
CourtNebraska Supreme Court
DecidedFebruary 16, 1940
DocketNo. 30735
StatusPublished
Cited by5 cases

This text of 290 N.W. 440 (Federal Farm Mortgage Corp. v. Cramb) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Farm Mortgage Corp. v. Cramb, 290 N.W. 440, 137 Neb. 553, 1940 Neb. LEXIS 31 (Neb. 1940).

Opinion

Paine, J.

This is an action at law upon a promissory note, in which the Federal Farm Mortgage Corporation asked judgment for $500, with interest thereon at 5 per cent, from April 15, 1938, together with costs. The defendants demurred to the plaintiff’s petition, which demurrer was overruled, and the defendants electing to stand on their demurrer, judgment was entered in favor of the plaintiff and against the defendants. As will be seen by further statement of the facts, this resolves itself into an action at law for a judgment for the balance of a mortgage debt remaining unsatisfied after the foreclosure of the mortgage.

The action was commenced in the district court for Jefferson county on December 3, 1938, and the defendants were personally served with summons. The plaintiff, Federal Farm Mortgage Corporation, is a corporation duly organized under an act of congress known as the Federal Farm Mortgage Corporation Act (12 U. S. C. A. sec. 1020 et seq.). The principal place of business is in Washington, D. C. The land bank commissioner is an officer of the Farm Credit Administration, which is an executive and administrative agency of the United States government, which office was created by the Federal Farm Loan Act (12 U. S. C. A. sec. 653). This office was transferred from the Treasury Department to the Farm Credit Administration, and the name of the office was changed from farm loan commissioner to land bank commissioner (12 U. S. C. A. sec. 638-a). Additional statements about this federal set-up will be found set out at length in the opinion by Judge Rose, recently released, entitled Federal Farm Mtg. Corporation v. Hughes, ante, p. 454, 289 N. W. 866.

On July 23, 1935, the defendants secured a loan from the land bank commissioner, for which they gave their promissory note in the sum of $1,900, bearing 5 per cent, interest from September 18, 1935, and payable semiannually on the 1st day of April and October. The principal sum was payable on an amortization plan, in 20 equal instalments of $95 each, the first instalment being payable April 1, 1939, [555]*555the last payment to be due and payable October 1, 1948. To secure the payment of said note, the defendants gave a mortgage to the land bank commissioner, subject only to a prior mortg-age in favor of the Federal Land Bank of Omaha in the principal sum of $5,500, bearing date July 23, 1935, and recorded in book 83, page 87, and the second mortgage given to the land bank commission under date of July 23, 1935, was filed for record August 15, 1935, and recorded in book 83, page 89, of the mortgage records of Jefferson county, Nebraska.

It is further alleged that said land bank commissioner made said loan in his own name, but on behalf of the plaintiff herein, the Federal Farm Mortgage Corporation, pursuant to an act of congress, found as amended in 12 U. S. C. A. sec. 1016-g, and that the plaintiff is, and ever since has been, the owner and holder of said note.

The defendants failed to pay the interest instalments, as provided by the terms of the note, and the plaintiff thereupon elected to exercise its option to declare the whole of the balance of the principal of said indebtedness to be due and payable in the amount of $2,030.63, the same covering the unpaid principal of $1,900, the interest instalment due April 1, 1936, and the interest instalment due October 1, 1936, each in the sum of $47.50, and the accrued interest to February 15, 1937, in the sum of $35.63, and the plaintiff on March 5, 1937, brought action to foreclose said mortgage.

On May 14, 1937, decree of foreclosure was entered, finding the amount due plaintiff $2,077.39, with interest at 5 per cent, from May 14, 1937. An order of sale being issued, said property was sold by the sheriff on March 21, 1938, for the sum of $1,725.03, and the sale was confirmed April 15, 1938. As said sale did not realize a sufficient amount to pay the amount found due the plaintiff on said note, this action at law was brought on the note, and the prayer of the petition is that the plaintiff, Federal Farm Mortgage Corporation, prays judgment against defendants in the sum of $500, with interest at 5 per cent, from April 15, 1938.

[556]*556To this petition the defendánts filed a demurrer December 24, 1938, on the following grounds: (1) That the court has no jurisdiction of the persons.or the subject of the action; (2) that there is another action pending between the same parties for the same cause; (3) that the petition does not state facts sufficient to constitute a cause of action.

On April 19, 1939, the demurrer was argued and overruled. Defendants electing to stand upon their demurrer, cause came on for trial May 5, 1939; jury waived; trial to court; finding in favor of plaintiff, and judgment entered for $526, with 5 per cent, interest from date, from which judgment defendants appeal, and supersedeas bond given in the sum of $600.

The alleged errors of the trial court relied upon for reversal are in overruling the demurrer, and in assuming jurisdiction to enter a judgment in an action at law upon the note and mortgage which had been foreclosed and the property sold under an order of sale to satisfy the same. In support thereof, the defendants cite chapter 41, Laws 1933, which act purported to divest district courts of the power to enter a deficiency judgment in actions for the foreclosure of real estate mortgages. This act amended section 20-2141, Comp. St. 1929, to read: “When a petition shall be filed for the satisfaction of a mortgage, the court shall have the power only to decree and compel the delivery of the possession of the premises to the purchaser thereof.” This act of 1933 was passed with an emergency clause, and took effect April 26, 1933', and the defendants contend that it applies to all mortgages executed after April 26, 1933.

To meet these contentions of the defendants, the plaintiff argues that chapter 41, Laws 1933, does not divest district courts of jurisdiction of actions at law for the recovery of the unpaid balance of a mortgage debt subsequent to the foreclosure of the mortgage. The plaintiff contends that chapter 41 has no force and effect with respect to actions at law.

In the case at bar, the mortgage had been foreclosed, the property had been sold, and the foreclosure proceedings had [557]*557in all respects been completed. The plaintiff thereafter proceeded under section 20-2142, Comp. St. 1929, which provides that no proceeding shall be had at law for the recovery of the debt secured by the mortgage, or any part thereof, unless authorized by the court. It is self-evident that an action at law is separate and distinct from a suit to foreclose a mortgage, and that chapter 41, Laws 1933, amends and repeals sections 20-2141 and 20-2143, Comp. St. 1929, but does not amend, nor purport to amend, section 20-2142; in fact, it left intact all of the provisions of the law with respect to actions at law on notes secured by mortgages. The plain provision of chapter 41 forbids a district court to enter a deficiency judgment in an equity action for the foreclosure of a real estate mortgage.

Section 20-2142, Comp. St. 1929, was section 848 of the Code in 1866 and thereafter. In Laws 1897, chapter 95 was introduced by Senator Beal, amending section 848 of the Code by striking out the last five words, to wit, “unless authorized by the court,” but in Moore v. Neece, 80 Neb. 600, 114 N. W.

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Cite This Page — Counsel Stack

Bluebook (online)
290 N.W. 440, 137 Neb. 553, 1940 Neb. LEXIS 31, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-farm-mortgage-corp-v-cramb-neb-1940.