First State Bank v. Zoss

South Dakota Supreme Court

First State Bank v. Zoss

312 N.W.2d 127, 1981 S.D. LEXIS 361

CourtSouth Dakota Supreme Court

DecidedNovember 10, 1981

Docket13234

StatusPublished

Cited by6 cases

This text of 312 N.W.2d 127 (First State Bank v. Zoss) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

First State Bank v. Zoss, 312 N.W.2d 127, 1981 S.D. LEXIS 361 (S.D. 1981).

Pincite

Opinion

PER CURIAM.

This is an appeal from a judgment in an action to foreclose a mortgage. We affirm.

On April 9, 1977, the Zosses (appellants), as mortgagors, executed a note at 9⅛⅛% interest and a mortgage to First State Bank, Armour, South Dakota (appellee). On December 26,1978, appellants filed petitions in bankruptcy. Discharges of bankrupts were entered on February 26, 1979. Appellee commenced this action to foreclose its mortgage in June of 1979. The complaint prayed for sale of the real estate to satisfy and foreclose the mortgage, for judgment against the appellants for the mortgage debt, and for interest and a “late charge” of 4% of each installment not paid when due. Appellants counterclaimed for attorney’s fees for having to defend the action. During the pendency of the action the property was sold and the debt, interest and “late charges” were paid. The court concluded that the late charges were not usurious and that appellee’s action was not an attempt to hold appellants personally liable but rather a prerequisite to foreclosure. Judgment was entered dismissing appellants’ counterclaim for costs incurred in defending the action and for return of the interest paid.

Appellants contend that the appel-lee’s action was an attempt to obtain a personal judgment in violation of the injunctions of the discharges in bankruptcy. They claim that this violation should have entitled them to a judgment on their counterclaim for attorney’s fees. A discharge in bankruptcy, however, does not affect the lien of a mortgage. Prebyl v. Prudential Ins. Co. of America, 98 F.2d 199 (8th Cir. 1938), cert. denied, 305 U.S. 641, 59 S.Ct. 151, 83 L.Ed. 413 (1938); Atwood v. Schlee, 269 Mich. 322, 257 N.W. 712 (1934); Selway v. Daut, 67 Mont. 262, 215 P. 646 (1923); see 11 U.S.C. § 524(a) (1978) (comparable to former 11 U.S.C. § 32(f), Bankruptcy Act § 14(f)). A discharge is no bar to a subse *128 quent foreclosure but only relieves the bankrupt from personal liability. Oakman v. Hurd Lumber & Woodwork Co., 250 Mich. 672, 230 N.W. 921 (1930). Selway v. Daut, supra. The discharge only prevented the appellee from holding appellants personally liable and did not bar an action to foreclose the mortgage.

We have examined the other issue raised by appellants and find it to be without merit.

The judgment of the court below is affirmed.

DUNN, J., deeming himself disqualified, did not participate.

Free access — add to your briefcase to read the full text and ask questions with AI

PER CURIAM.

This is an appeal from a judgment in an action to foreclose a mortgage. We affirm.

On April 9, 1977, the Zosses (appellants), as mortgagors, executed a note at 9⅛⅛% interest and a mortgage to First State Bank, Armour, South Dakota (appellee). On December 26,1978, appellants filed petitions in bankruptcy. Discharges of bankrupts were entered on February 26, 1979. Appellee commenced this action to foreclose its mortgage in June of 1979. The complaint prayed for sale of the real estate to satisfy and foreclose the mortgage, for judgment against the appellants for the mortgage debt, and for interest and a “late charge” of 4% of each installment not paid when due. Appellants counterclaimed for attorney’s fees for having to defend the action. During the pendency of the action the property was sold and the debt, interest and “late charges” were paid. The court concluded that the late charges were not usurious and that appellee’s action was not an attempt to hold appellants personally liable but rather a prerequisite to foreclosure. Judgment was entered dismissing appellants’ counterclaim for costs incurred in defending the action and for return of the interest paid.

Appellants contend that the appel-lee’s action was an attempt to obtain a personal judgment in violation of the injunctions of the discharges in bankruptcy. They claim that this violation should have entitled them to a judgment on their counterclaim for attorney’s fees. A discharge in bankruptcy, however, does not affect the lien of a mortgage. Prebyl v. Prudential Ins. Co. of America, 98 F.2d 199 (8th Cir. 1938), cert. denied, 305 U.S. 641, 59 S.Ct. 151, 83 L.Ed. 413 (1938); Atwood v. Schlee, 269 Mich. 322, 257 N.W. 712 (1934); Selway v. Daut, 67 Mont. 262, 215 P. 646 (1923); see 11 U.S.C. § 524(a) (1978) (comparable to former 11 U.S.C. § 32(f), Bankruptcy Act § 14(f)). A discharge is no bar to a subse *128 quent foreclosure but only relieves the bankrupt from personal liability. Oakman v. Hurd Lumber & Woodwork Co., 250 Mich. 672, 230 N.W. 921 (1930). Selway v. Daut, supra. The discharge only prevented the appellee from holding appellants personally liable and did not bar an action to foreclose the mortgage.

We have examined the other issue raised by appellants and find it to be without merit.

The judgment of the court below is affirmed.

DUNN, J., deeming himself disqualified, did not participate.

Cite This Page — Counsel Stack

Bluebook (online)

312 N.W.2d 127, 1981 S.D. LEXIS 361, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-state-bank-v-zoss-sd-1981.

Opinion

Related

Cite This Page — Counsel Stack