Court Opinion

ID: 3748730
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:09:46.731441+00
Date Added: 2024-06-11T18:03:39.910958
License: Public Domain

I concur in the decree of foreclosure rendered by the majority of this court, but dissent from the order which provides for an immediate sale of the mortgaged property.
There are certain basic principles enunciated by the authorities from which there can be no departure. Legislative bodies, either state or national, are without power to enact laws impairing the obligations of contracts. Neither can a court of equity render a decree impairing the obligation of a contract. It follows as a matter of course that a decree of the trial court — which in substance imposes a condition to a decree of foreclosure that the plaintiff, the creditor, allow a substantial credit to the debtor on the indebtedness — is without effect, as the same if enforced would impair the obligations of a written contract. I am of the opinion, however, that a court of equity in the exercise of sound discretion may impose reasonable conditions and make the same a part of its decree. The various provisions found in the General Code dealing with the sale of property under a decree of foreclosure have reference to proceedings which take place after the decree of foreclosure is rendered by the court. They do not affect the sound discretion of the court rendering the decree to impose reasonable conditions. The law contemplates a sale of the property mortgaged, after a decree of foreclosure, at a public sale with competitive bidders. There is evidence in the record as to the market conditions of real estate. The courts will take judicial notice of the present economic conditions prevailing in this county and elsewhere. They are unprecedented and without parallel.
I agree with counsel for defendant that it is not a case of mere fluctuations of market values or temporary *Page 504 
depressions that sometimes affect localities. It is safe to say that for a long time no market whatsoever existed for real estate. There can be no public sale with competitive bidding when there are no bidders. The inevitable result is that the creditor takes the property at his own price, and when the price at which he takes it is not sufficient to cover the indebtedness a deficiency judgment is rendered against the mortgagor for the balance. The debtor, or mortgagor, not only loses the mortgaged property and whatever investment by way of money or improvements he has put into it, but he also finds himself facing a personal judgment for the balance.
Every governmental agency is straining itself to the utmost to relieve the crisis which now exists. I see no reason why courts of equity cannot assist to the extent of their power in this program of relief. Courts of equity are resorted to in order to obtain extraordinary relief, or relief which the law courts cannot afford.
From time immemorial courts of chancery have refused equitable relief when the granting of such relief would prove unduly oppressive. Likewise, courts of chancery have imposed conditions and made the same part of their decree in order to guard against oppression. To allow an immediate sale of the property in the case at bar would result in a virtual confiscation of the debtor's property. The court may well say, we shall postpone the date of sale until there can be in fact and in truth a public sale with competitive bidders.
The various moratorium laws passed by the various state legislatures are merely declarations of equitable principles. In my opinion this power to postpone the date of sale was lodged in courts of equity as an inherent power in order to prevent oppression and injustice. The moratorium laws passed by the various state legislatures are merely cumulative. They are not exclusive. *Page 505 
The courts have taken judicial notice of the depressed state of the real estate market. The courts must likewise take judicial notice of the gradual improvement in the real estate market. The consensus of opinion seems to be that we have reached the bottom of the depression and are now ascending the upward grade. We are nearing a time when values will be reestablished and when a public sale will have competitive bidders who bid in good faith with a true intention of acquiring the property.
It is my opinion that the date of sale should be postponed at least for a period of six months in the hope that market conditions will so far improve that the sale of the property ordered by the court will be a true sale and not a pretended sale; a sale where competitive bidders will compete in good faith and the price realized will nearly equal the true value of the property.
When one peruses the history and progress of equity jurisprudence he will soon discover that a substantial part of its efforts was devoted to protecting the debtor against the voraciousness of the creditor; that it invented various devices to thwart the creditor from gaining an undue advantage.
In my opinion this court has full power to impose reasonable conditions and make the same part of its decree. This court is without power to cancel the indebtedness or any part of it; but when with full knowledge of prevailing conditions it is bound to conclude that there can be no substantial compliance with the law which calls for a public sale with competitive bidders, it may order the date of sale postponed until such time as the market for real estate will be so far improved as to permit of a substantial compliance with the provisions of the law.
I realize that this power of a court of equity to impose conditions and make the same part of its decree *Page 506 
of foreclosure is purely discretionary. It is doubtful whether this discretion can be interfered with by a reviewing court. We are sitting here as a court of chancery. We are required by tradition and precedent to put conscience into our decree.
My conclusion is:
1. That the plaintiff is entitled to a decree of foreclosure.
2. That the court is without power to cancel the indebtedness or any part of it because such a decree would impair the obligations of a contract, which neither legislature nor courts are empowered to do.
3. We are possessed of sound discretion to impose reasonable conditions and make the same part of our decree.
4. The law contemplates a public sale of the mortgaged property with competitive bidders bidding at the sale. In the present market conditions there can be no substantial compliance therewith, as there are no bidders.
5. In the case at bar the most helpful condition to be imposed in order to prevent confiscation of the property, and consequent oppression of the debtor, is to insert a condition and make the same part of the decree, such condition postponing the date of sale for a period of six months. *Page 507