Milford chronicle., 1935-05-31
FARM MORTGAGE
MORATORIUM IS
Held ILLEGAL
LConfinued from First Pegel

ever, a majority of the Senate sup
pOIted him and the President,
though taking the view the bill was
loosely drawn and would need
amendment, signed IL.
The decision of the Court on Mon
day on the FrazieT-Lemke MoratOr-
ium act had nothing to do with the
Frezier-Lemke Farm Mortgage Re
financing bill, now pending in the
two Houses of Congress. That bill
has not yet passed, but will be
subject of controversy in House and
Senate before the session ends.
Since enactment Of the Frazier
Iemke Farm Mortgage Moratorium
law, IL has been sustained by some
lower Federal courts and turned
down by others. In the present case,
the Federal Court fOf, Western Ken
lucky and the Circuit Court Of Ap-
peaIs for the Sixth Circuit held It
valid
The law in effect provided that If
efforts to scale down q farmers
mortgage to a figure he could pay
should fail, the property could not
be fOreclOsed for five years II
reasonable rental" was paid by the
owner. The farmer was enabled by
the act to obtain full title to his
property by paying its appraised
value at the end Of the five-year per-
iod, regardless Of the sum fixed in
the mortgage.
Bank Upheld
In the case before the Court, Rad
ford defaulted on payments on a
$4,000 mortgage held by the Louis
willie Joint Stock Land Bank and
then, when the, bank tried to buy
the property, refused $9500 for It. |
BY paying 1925 annually, he invoked
the Frazier -Lenlke law to retain his
property with an option to clear his |
debt by repurchasing for $4445 |
which was the appraisal figure. The
Louisville Bank held the act took
property without due process and
was not a bankruptcy measure.
The Court on Monday held with
the bank.
In reversing the Circuit Court of
the Sixth Circuit, Justice Brandeis
summed mp as follows:
THE province Of the court is lin
tied TO deciding whether the Frazier
Lemke act as applied has taken
from the bank without cOmpensa-
tiOn, and given to RadfOrd, rights In
specific property which are Of sub
stantial value.
"As we conclude that the act as
applied has done so, we must hold
Il void. For the Fifth Amendment
commands that, however great the
Nations need, private property shall
not be thus taken even for a wholly
public use without just compensa-
tiOn. If the public interests requires,
and permits, the taking Of property
Of individual mortgages in order to :
relieve the necessities Of individual
resort must be had to
by eminent domain; so =.
that, through taxation, the burden
Of the relief afforded in the public
interest may be borne by the pub :
lic." :
Backs Mortgages Rights
In a significant phase of his Opin- y
ION, Justice Brandeis made it plain
that the rights of the mortgage
could not be essentially impaired a
and disregarded He said: h
For centuries efforts to protect n
1ecessitOus mOrtgagOrs have been G
persistent. Gradually the mortgage [,
If real estate was transformed from
! conveyance upon condition into a Il
len; and failure Of the mOrtgagOr Is
o pay on the day fixed ceased to
fleet an automatic foreclosure. t.
COURTS of equity. applying their es- h
ablished jurisdiction to relieve 81
lgainst penalties and fOrfeitures, n
reated the equity Of redemption. o.
thus the mOrtgag0r was given a n
easOnable time to cure the default e.
nd to require a reROnveyance of ei
he property. Legislation in many hi
itates carried this development fur VI
her, and preserved the mOrtgagOr's =
light to possession. even after de-
ault. until the conclusion of fore s.
lOsure proceedings, q q
"But the statutory command that u
he mOrtgagOr should not lose his IA
rOperty on default had always p
ested ON the assumption that the II
lortgagee would be compensated NJ
Dr. the default by later payment,
18th interest, of the debt for which pl
he security was given; and the nj
rejection afforded the mOrtgagor te
as, in effect, the granting of stay. q
o instance has been found, except On
nder the Frazier-Lemke act, of dc
ther a statute or decision compel
ng the mortgage to relinquish the th
rOnarfv IN the n1OFtRagOr free of Sc
lie lien unless the debt was paid in Il
III. 10
Stresses Protection th
"This right Of the mortgage to de
sist upon full payment before giv- ye
z up his security has been DEEM tn
Of the essence OF q mortgage.
Is position In this respect was not
ranged when foreclosure by pub q
, sale superseded strict foreclosure tiv
when the Legislatures Of many sil
ates created right Of redemp- re'
IN at the sale price. To protect his co
yht to full payment or the mort OF
ged property, the mortgage was esi
lowed to bid at the judicial sale Gel
foreclosure In many States Ia
her statutory changes were made Gel
the form and detail Of foreclosure
q redemption. But practically al fac
Iys the measures adopted for the pr
lrtgagor's relief, including mora shi
rum legislation enacted by the ito
peral States during the present cIo
preston, resulted primarily ip . els