Court Opinion

ID: 7874420
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:02:12.257106+00
Date Added: 2024-06-11T16:31:21.127479
License: Public Domain

MORGAN, Justice
(dissenting).
I respectfully dissent.
This action was brought, by First Federal Savings & Loan Association of Sioux Falls (First Federal) seeking foreclosure by action under SDCL ch. 21-47 of certain real estate mortgages executed by Dardanella Financial Corporation (DFC) to.secure repayment in the sum of $1,200,000. The underlying obligation was evidenced by a promissory note signed by DFC and by Lee 0. Rensberger and Betty Lou Rensberger (Rensbergers).
DFC’s and Rensbergers’ principal defense was that the mortgage executed contemporaneously with the note and denominated therein as a 180-day redemption mortgage was invalid and of no force and effect because the property described in the mortgage encompassed 320 acres and was thus in excess of the 40-acre limit established in SDCL 21-49-11. First Federal conceded the mortgaged property exceeded 40 acres and there was no issue of *463fact. By the second paragraph of the summary judgment the trial court held that the mortgage at issue was a valid first lien on the property described, subject only to real estate taxes and special assessments. The trial court then went on to direct the sale of the property in the manner and form prescribed by SDCL eh. 21-47 and finally directed that any redemptioner shall be required to pay the sum established in SDCL 21-52-14 with interest thereon at the rate of eighteen percent.
The majority opinion decries the absence of findings of fact and conclusions of law because First Federal chose to move for summary judgment. Apparently, for this reason alone, the majority would retain certain mortgage provisions that conform to the 180-day redemption statute. This simply cannot be. The mortgage is either short-term or standard. Under the law and in light of the record before us, it cannot be a short-term redemption mortgage; it encompasses too much property. Furthermore, there are certain trade-offs built into the 180-day mortgage that are peculiar to the short-term act. The mortgagee only has 180-days to redeem the property after a foreclosure sale, but his interest rate is fixed by the terms of the note. In footnote 1, the majority appears to say that the 180-day limitation does not apply, then two pages later the majority opinion states that the provisions of the 180-day redemption mortgage act governed the mortgage.
The answer to this dilemma is found in the mortgage instrument itself:
This mortgage shall be governed by the law of the jurisdiction in which the property is located. In the event that any provision or clause of this mortgage or the note conflicts with the applicable law, such conflict shall not affect other provisions of this mortgage or the note that can be given effect without the conflicting provision, and to this end the provisions of the mortgage and the note are declared to be severable.
It is implicit on the face of the judgment that this is what the trial court did. It severed the provisions peculiar to short-term redemption mortgages and treated the mortgage as a valid first lien mortgage.
I would affirm.
I am hereby authorized to state that Justice WOLLMAN joins in this dissent.