Decker v. Dutcher

Rhodes, J. (dissenting).

It seems to me that the Moratorium Laws are procedural, in so far as the question before us is concerned. They do not deprive the mortgagee of his right to a deficiency judgment, but they enact a change in procedure for the determination of such deficiency. By the original act, chapter 794 of the Laws of 1933, it was provided that it should not apply to mortgages dated on or after July 1, 1932. The mortgage in question was dated September 7, 1932, and thus the procedure outlined in the original statute had no application thereto.

By chapter 277 of the Laws of 1934 the Legislature continued the moratorium provisions, including the procedure for obtaining a deficiency judgment. Later in the session, by chapter 564 of the Laws of 1934, it was provided, among other things, that the provisions of section 1083-a, as amended, shall apply to all actions to foreclose mortgages on real property now pending in the courts of this State.

*693This action was then pending because it was commenced on or about the 23d day of January, 1934.

Section 4 of the original enactment still remained, which provided that the act shall not apply to mortgages dated on or after July 1, 1932. It is significant that the language of the later act, chapter 564 of the Laws of 1934, section 2, provides that it shall apply to all actions to foreclose mortgages now pending in the courts of this State. I think the two provisions can be harmonized by construing them to mean that while they shall not apply to mortgages dated on or after July 1, 1932, where no action to foreclose the same was then pending, they shall apply to such mortgages if an action to foreclose the same had been brought theretofore and was then pending.

I think it may with plausibility be argued that it was the thought of the Legislature that although the emergency still existed its severity had ameliorated to such an extent that as to all actions subsequently brought the provisions of the statute should not apply, but that as to those then pending it should have application.

Furthermore, if the procedure in question was not to apply to mortgages dated after July 1, 1932, there was absolutely no reason which I can discover for the provisions of chapter 564 of the Laws of 1934 that section 1083-a shall apply to all pending actions.

In addition to the reasons discussed by the court below, this being an equity action, the plaintiff should be governed by equitable principles. It appears that when the foreclosure action was brought, defendants’ attorney was assured in behalf of plaintiff that no deficiency judgment would be sought. Lulled by this assurance defendants’ attorney did not further contest the action.

It may be that irrespective of the moratorium laws the defendants could have interposed facts which in equity would have precluded the plaintiff from recovering any deficiency judgment.

It appears from the record that it has been judicially determined that the defendants were induced to purchase the property in question by fraud on the part of the plaintiff, and that the mortgage was given pursuant to a bargain into which defendants were thus fraudulently lured.

In the transaction defendants traded their home which thus came into the possession of plaintiff, and they have in addition lost the farm and the stock which they purchased in reliance upon plaintiff’s fraud.

Upon all the facts the order vacating the deficiency judgment should be affirmed, with ten dollars costs and disbursements.