Opinion
No. 33350.
November 21, 1938.
1. LIMITATION OF ACTIONS.
Where bank foreclosed deed of trust lien and purchased realty at foreclosure sale, suit to cancel mortgagor's claim of title and to confirm title of bank was not barred by statute of limitations because not brought until more than six years after due date of note, since bank was entitled to such relief at any date subsequent to sale unless relief should have become barred by limitation of adverse possession (Code 1930, sec. 2292).
2. HOLIDAYS.
As respects validity of trust deed foreclosure by bank, under the provisions of the Trading With the Enemy Act which was limited in its application to the period of the World War, the President of the United States was without authority on March 6, 1933, to issue proclamation closing all banks in the United States and prohibiting them from transacting any banking business whatsoever, since there was no authority in the President to issue such proclamation until March 9, 1933 (12 U.S.C.A., sec. 95).
3. HOLIDAYS.
Where the President of the United States was without authority on March 6, 1933, to issue proclamations closing all banking institutions in the United States and prohibiting them from transacting any banking business whatsoever, the approval by Congress on March 9, 1933, of the President's action in closing banks did not have retroactive effect of rendering illegal banking business such as foreclosure of trust deed which had been legally transacted on March 6, 1933 (12 U.S.C.A., secs. 95, 95a).
4. MORTGAGES.
Ordinarily, mere inadequacy in price alone will not be sufficient to warrant setting aside foreclosure sale in absence of fraud or unfair advantage.
5. MORTGAGES.
A trust deed foreclosure sale could not be set aside for inadequacy of price, in absence of showing of fraud or unfair advantage, where indebtedness held by mortgagee against land including interest and taxes amounted to as much as land was shown to be worth, mortgagors were totally insolvent, no deficiency judgment was taken against them, and indebtedness to mortgagee was barred by statute of limitations (Code 1930, sec. 2292).
APPEAL from the chancery court of Stone county; HON. D.M. RUSSELL, Chancellor.
T.J. Wills, of Hattiesburg, for appellant.
The court will observe that appellants were brought into court at the suit of appellee. That all they filed were defensive pleadings. They asked for no affirmative relief, sought only to have the court leave them unmolested and undisturbed. As defensive pleadings they were entitled to invoke every right accruing to them under the law. Their first defensive assertion was that the sale of the land by the trustee was void for two reasons. First, because it was made at the instance of the bank, purchased by the bank in violation of the Presidential Proclamation, which had the effect and force of law, at the time the sale was made. Second, because the price paid by the bank was so grossly inadequate as to shock the conscience of the court and to render the sale null and void.
On March 6, 1933, under the provisions of Section 5 B of the Act of Congress of October 6, 1917, 40 Statutes at Large 411, the President of the United States issued a proclamation in which he closed all banking institutions in the United States and its insular possession and prohibited all banking transactions during the holiday period. The proclamation prohibited all banks from transacting any business, the exact language being "or transact any other banking business whatsoever." See United States Code Annotated, Title 12, page 353, published after October, 1936. This proclamation issued March 6, 1933, was on March 9, 1933, approved, ratified and confirmed by Act of Congress. Section 95 United States Code Annotated, Title 12. The presidential order was valid and binding on all banks.
It is a well settled principle of law that all acts done in violation of law or contrary to public policy are void.
Perry v. U.S., 294 U.S. 330, 55 Sup. Ct. 432, 79 L.Ed. 912.
It is equally as well established principal of law that where a person comes into either a court of law or a court of equity and asks for relief and to entitle him to the relief sought he must show an act done or performed by him or a right arising to him out of some violation of law or act contrary to public policy that the courts will not lend its power to his aid.
Jones v. McFarland, 178 Miss. 282, 173 So. 296; Woodson v. Hopkins, 85 Miss. 171, 37 So. 100, 38 So. 298.
This court has held that a sale of land, under a trustee's sale, for $100 that had sold back in the flush times for $2500 was void.
Blacketor v. Cartee, 172 Miss. 889, 161 So. 696; 179 Miss. 665, 176 So. 532.
The statute of limitation had run before the filing of this suit. The note was given on April 3, 1930, and matured April 3, 1931. This suit was filed on May 5, 1937. The six year statute of limitation would have expired on April 3, 1937, but for the bank holiday of 4 days, intervening from March 6, 1933, to March 9, 1933, so that the statute of limitation was complete on April 7, 1937.
Section 2314 Code of 1930 has no application for the reason that the unlawful entry and detainer suit was not a suit to collect the note or to foreclose the deed of trust and therefore did not toll the statute.
W.T. Rawleigh Co. v. Barnes, 143 Miss. 597, 109 So. 8.
U.B. Parker, of Wiggins, for appellee.
The President had no authorty to issue such a proclamation. It appears that such proclamation was attempted to be issued under section 95 of the act known as "Trading with the Enemy Act," which was limited in its application to the World War, and, therefore, would not authorize any such act on the part of the President of the United States at the time and in the manner he issued said proclamation. This is not only plain from the reading of Section 95, found on pages 352 and 353, of Title 12, United States Code Annotated, which authorized no such proclamation or exercise of authority by the President of the United States in the time of peace over state banking institutions; but is demonstrated by the facts found on page 353, Title 12, United States Code Annotated, wherein the President issued his first proclamation number 2039, on March 6, 1933; and at the bottom of the same page, and on the following page, where he issued his second proclamation number 2040, on March 9, 1933, after the Congress had passed an act on that date, being Chapter 1, Section 2, 48 Statute at Large page 1, Section 95 A, Title 12 United States Code Annotated, page 361. In other words, the President and his advisers knew that he had no authority, under section 95, Title 12, United States Code Annotated to issue the proclamation on March 6, 1933. He, therefore, called upon Congress for authority, and such was given him; and, under Section 95 A, supra, he did have authority to issue the proclamation issued on March 9th; and in a desperate effort to try to keep alive and make valid the proclamation made and issued on March 6th, the second proclamation recites that "WHEREAS, on March 6, 1933" such proclamation as is relied on here by appellants was issued and, etc.
We earnestly insist that a careful reading of the law, as found on pages 351 to 361, Title 12, United States Code Annotated, will satisfy the court that the President had no authority to issue the proclamation closing the banks; and, therefore, had the bank remained open it would not have been doing so in utter violation of law.
The Chancellor rightfully stated and held in his opinion that the trustee had put in motion this foreclosure proceeding long before March 6, 1933, by advertising, for the proper length of time, that the sale would be made within legal hours on said day, at the time and place where the sale was made; and appellants were not only there present at the sale, but made no objections at that time, nor at any other time did he make any objections until after appellee was forced into litigation and until the trial of the unlawful entry and detainer proceedings, when, without any plea whatever having been filed in that proceeding, as will be demonstrated by the record in cause number 32688, styled "Abel Anthony et ux v. Bank of Wiggins," in the Supreme Court of the State of Mississippi, decided on April 12, 1937, and by the record herein.
We say that if the Bank of Wiggins, and all other banks in the United States, had been standing wide open so that every man in the United States who had any money in the bank could have withdrawn it, checked upon his account and dealt out his money as he desired to do so, it would have done appellants no good, because it is shown by this record, and they admit that they had no money and it is not shown by this record that they could have gotten any money anywhere in the world or that they had any prospect of getting any money.
No authority is advanced for the statement and claim that this sale is void because it was advertised for and made on the 6th day of March, 1933, other than that heretofore discussed and condemned; and we are frank to say to the court that no such exists, and that it is the wildest stretch of the imagination to make such a claim.
Anthony v. Bank of Wiggins, 178 Miss. 361.
There are two very recent cases on the subject of sales of land under mortgages on averments of inadequacy of price based on general economic conditions, and in both instances the court refused to cancel.
Denson v. Provident Mutual Life Ins. Co., 166 So. 33, 299 U.S. 556, 81 L.Ed. 409, 57 S.Ct. 18; 171 So. 739; 174 So. 291; 178 So. 919; 178 So. 920; Pruitt v. Commercial National Bank of Anniston, 160 So. 540.
We recognize the rule that where the consideration in a trustee's deed to the holder of a deed of trust is ridiculously inadequate and is accompanied by fraud, oppression, or deceit, then the conveyance will be set aside; but in no case has this court or any other court, as far as the writer has been able to find, set aside such a conveyance for inadequacy of consideration alone unaccompanied by fraud, oppression or deceit and authorized the cancellation of a conveyance.
Foster v. Campbell, 145 Miss. 502, 113 So. 550; Hesdorffer v. Welsh, 127 Miss. 261, 90 So. 3.
No offer has been made to pay the Bank of Wiggins, no intimation is made anywhere that any payment could be made or might be made if the trustee's deed herein should be set aside, but we say that inadequacy of consideration alone will not justify the court in setting aside the sale by the trustee herein, because inadequacy of consideration alone, under the circumstances as shown by this record, will not authorize a condemnation of the trustee's deed, as we say the record shows absolutely no fraud, deceit or oppression on the part of the Bank of Wiggins.
It is next contended by appellants that the statute of limitations has run against the claim of Bank of Wiggins for its money, and that the statute, Code 1930, Section 2314, does not protect appellee herein, for the reason that its original suit, filed before the statute had run, was not a suit on the note nor was it a suit to foreclose the deed of trust. In this appellants are altogether in error, because the statute, on its face, is plain and the unlawful entry and detainer suit was reversed on appeal for a matter of form and on account of the fact that the court had no jurisdiction under that suit.
Hawkins v. Scottish Union National Ins. Co., 110 Miss. 23, 69 So. 710.
We say that in the case at bar the statute of limitation was tolled by the provisions of Section 2314 of the 1930 Code.
Lucas v. American Freehold Land Mortgage Co., 72 Miss. 366, 16 So. 358.
The appellants became indebted to the Bank of Wiggins in the sum of $700 on April 3, 1930, as evidenced by a promissory note due twelve months after date and secured by a deed of trust on 160 acres of land in Stone County, Mississippi. Default was made in the payment of the indebtedness, and the land was duly and legally advertised by the trustee for sale on March 6, 1933; and was purchased at the sale on that date by a representative of the bank for the sum of $75. The appellants remained in possession of the land for some two or three years without formal demand being made of them by the bank to surrender possession. Finally the bank instituted an unlawful entry and detainer proceeding for the possession of the land, recovering a judgment in that behalf, and the judgment was reversed and the proceeding dismissed on appeal to this Court on April 12, 1937, for the reason that the same was not instituted within the time required by Section 3456 of the Code of 1930, the decision being reported in 178 Miss. 361, 173 So. 454.
Thereafter, the appellee brought the present suit in chancery on the 5th day of May, 1937, which was more than six years after the due date of the note secured by the deed of trust hereinbefore mentioned, and the bill of complaint herein alleges that the appellee is the legal and equitable owner of the land in question and entitled to a decree either cancelling the claim of the appellants and confirming the title of appellee, or in the alternative ordering a second foreclosure of the security against the land in the event the sale of March 6, 1933 should be held invalid. The chancellor decreed that the foreclosure and sale of the land referred to was valid, and cancelled the claim of the appellants, confirmed the title, and granted a writ of possession as prayed for.
Appellants invoke the Statute of Limitations, Code 1930, Section 2292, on the ground that the present suit was not brought until more than six years after the due date of the note. The statute, however, is not applicable for the reason that the chancellor did not grant relief on the note or decree a further foreclosure of the deed of trust in accordance with the alternative prayer of the bill of complaint, but as heretofore stated he held that the security had already been validly foreclosed and that the appellee was the owner of the land involved. If he was correct in holding that the sale was valid, then the purchaser was entitled to the relief granted at any date subsequent to the sale unless such relief should have become barred by some limitation of adverse possession.
It is further contended by the appellants that the foreclosure sale of March 6, 1933, was void on two grounds: (1) That the same was made during the afternoon after the appellee had received notice on the morning of March 6, 1933, of the Presidential Proclamation closing all banking institutions in the United States, and prohibiting them from transacting any banking business whatsoever; and (2) because of the inadequacy of the price paid for the land at the trustee's sale.
The Proclamation of the President was issued under what he conceived to be an authority vested in him by virtue of the provisions of Sec. 5 (b) of the Act of Congress of October 6, 1917, 40 Stat. 411. This was done under Sec. 5(b) of the Act known as the "Trading With The Enemy Act," limited in its application to the period of the World War. Section 95, U.S.C.A., Title 12, pp. 352, 353. The first proclamation, No. 2039, issued on March 6, 1933, was followed by his second proclamation, No. 2040, issued on March 9, 1933, after the Congress had passed an act on that date, being Chap. 1, Sec. 2, 48 Stat. 1, Sec. 95a, Title 12, U.S.C.A., p. 361, granting such authority, and approving what had been done by the President in the premises.
An historical note is found on page 361, Title 12, U.S.C.A., as follows: "As originally enacted by Act of Oct. 6, 1917, c. 106, Sec. 5 (b), 40 Stat. 415, this section formed a part of the Trading With The Enemy Act, which was limited in its application to the World War and therefore was omitted from the Code, but printed as an appendix to Title 50 U.S.C.A. By Act of Mar. 9, 1933, c. 1, Sec. 2, 48 Stat. 1, the section was made applicable to any war `or any other period of national emergency declared by the President,' thus making it general and permanent legislation."
Thus it will be seen that although the banking institutions of the United States, out of a commendable spirit of co-operation in a time of economic crisis, generally obeyed the Presidential Proclamation of March 6, 1933, there was no authority in law for the issuance of such a proclamation until March 9, 1933. We are of the opinion that even though a sale by a trustee on March 6, 1933, under foreclosure proceedings theretofore legally advertised should be considered as transacting banking business, the approval by the Congress on March 9, 1933, of the President's action in closing the banks would not have the retroactive effect of rendering illegal that which had been legally done on March 6, 1933.
On the second objection, however, to the validity of the sale, the record discloses that the land was in fact sold for an inadequate price. It is shown to have been worth on that date the sum of $1,000 to $1,200. But the indebtedness then held by the bank against the land, including interest and several years' taxes, amounted to as much as the land was shown to be worth; and the appellants are also shown to have been totally insolvent, and no deficiency judgment has been taken against them. Moreover, the indebtedness was barred by the Six Year Statute of Limitation at the time of the filing of this suit to confirm appellee's title. Thus, it will be seen that the appellee bank has in a manner paid all that the land was worth. If the appellants were seeking affirmative relief equity would require a tender of the indebtedness due. Ordinarily, mere inadequacy of price alone, in the absence of fraud or unfair advantage, will not be sufficient to warrant the setting aside of a sale. Hardin et al. v. Grenada Bank et al., 182 Miss. 689, 180 So. 805.
Even though the appellants here are seeking no affirmative relief, we are of the opinion that under all the facts and circumstances we would not be warranted in denying the appellee the relief prayed for, due to mere inadequacy of price alone, where no fraud or unfair advantage is shown to have been taken of the appellants in connection with the foreclosure sale.
The decree of the court below will therefore be affirmed.
Affirmed.