Court Opinion

ID: 3510700
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:21:23.290705+00
Date Added: 2024-06-11T14:05:36.361252
License: Public Domain

I dissent. The exemption provision in the Minnesota mortgage moratorium act reads that the provisions of the act "shall not apply to any mortgage while such mortgage is held by the United States or by any agency * * * thereof." The South Dakota mortgage moratorium act, of which the majority opinion makes mention, exempts from the operation of its provisions mortgages held by "the United States Government, or any agent, agency, orinstrumentality of the United States." (Italics mine.) In view of the fact that the provision is more inclusive and broader than the exemption provision in the Minnesota act, it would seem that the case of Ellingson v. Joint Stock Land Bank, 64 S.D. —, 264 N.W. 516, is not conclusive of the question before us.
The Texas mortgage moratorium act (Vernon's Ann. Civ. St. art. 3804, § 3) provided: "The provisions of this Act shall not apply to loans due the Federal Government, or any agency thereof." That is almost identical with the exemption provision in our act. In Dallas Joint Stock Land Bank v. Ballard (Tex.Civ.App.) 74 S.W.2d 297, 299 (affirmed on other grounds,124 Tex. 113, 76 S.W. [2d] 1042), the court stated:
"It is contended that appellant [Joint Stock Land Bank] is an agency of the federal government within the purview of such exemption *Page 138 
provision. A joint stock land bank is undoubtedly, for some purposes, an agency of the federal government. * * * We are inclined to doubt, however, whether the agency existing by such authority alone would bring it within the exemption."
That court exempted the joint stock land banks from the operation of the act but did so under the feeling that the legislature so intended despite the fact that the language used was not broad enough to accomplish that purpose.
In no case decided by the United States Supreme Court has the relationship existing between the federal government and joint stock land banks been determined directly. There have been indications one way or the other but no absolute determination, although the federal land banks (a separate group of institutions) definitely have been held to be federal agencies. Smith v. Kansas City T.  T. Co. 255 U.S. 180, 41 S. Ct. 243,65 L. ed. 577; Federal Land Bank v. Gaines, 290 U.S. 247,54 S. Ct. 168, 78 L. ed. 298; Federal Land Bank v. Crosland,261 U.S. 374, 43 S. Ct. 385, 67 L. ed. 703, 29 A.L.R. 1.
In Federal Land Bank v. Priddy, 295 U.S. 229, 231,55 S. Ct. 705, 706, 79 L. ed. 1408 (1935), the court stated:
"* * * it is sufficient that this Court has already had occasion to consider the organization and functions offederal land banks, and to declare that they are instrumentalities of the federal government * * *." (Italics mine.)
The court there definitely limited the statement to federal land banks. In the same opinion, a few sentences later, the court stated [295 U.S. 233]:
"Joint stock land banks are privately owned corporations, organized for profit to their stockholders through the business of making loans on farm mortgages. § 16. There is nothing in their organization and powers to suggest that they are governmental agencies." (Italics mine.)
Those two statements appearing in the same opinion leave no doubt in my mind as to the relationship existing between joint stock land banks and the federal government. *Page 139 
In a later case, Louisville Joint Stock Land Bank v. Radford,295 U.S. 555, 55 S. Ct. 854, 79 L. ed. 1593, 97 A.L.R. 1106 (1935), subsec. (s) added to § 75 of the bankruptcy act (11 USCA, § 203) by the Frazier-Lemke act (passed June 28, 1934), was held unconstitutional as depriving the Louisville Joint Stock Land Bank of property without compensation in violation of the fifth amendment to the federal constitution. The provisions of the Frazier-Lemke act differ materially from those of our moratorium law. If joint stock land banks act only as agents of the federal government in the acquisition of their mortgages, as the majority opinion indicates, then it would be a novel procedure to allow said agents to complain that the principal had permitted the taking of property, acquired by the agent as agent, without due process of law. The fact that the federal government was not permitted to grant the type of relief provided by the Frazier-Lemke act is an indication that the joint stock land banks do not act simply as agents of the federal government in the acquisition of mortgages. Ordinarily a principal can deal with his own property as he chooses regardless of the fact that he might have obtained it through an agent. The Radford case and the Priddy case seem determinative of the proposition that joint stock land banks are not federal agencies. The fact that federal land banks are should not affect the situation.
The purpose of the mortgage moratorium act was to relieve the distress caused by a depreciation in values. Blaisdell v. Home B.  L. Assn. 189 Minn. 422, 249 N.W. 334, 86 A.L.R. 1507. This purpose certainly would not be attained were the use of the word "agency" in the exemption provision given the interpretation laid down in the majority opinion. Just how far is that exemption to be extended? In Wheeler v. Greene,280 U.S. 49, 51, 50 S. Ct. 21, 74 L. ed. 160, the national bank act, R. S. § 5234, was called "the prototype" of the farm loan act under which the joint stock land banks are authorized. Undoubtedly the legislature intended to exempt only such federal agencies as The War Finance, Emergency Fleet, Housing, Reconstruction Finance, Subsistence Homestead, and Tennessee Valley Authority, corporations which are federal agencies in every sense of the word. See 48 Harv. L.Rev. 775. *Page 140 
It was held in Home B.  L. Assn. v. Blaisdell,290 U.S. 398, 54 S. Ct. 231, 78 L. ed. 413, 88 A.L.R. 1481, that the moratorium act did not impair the integrity of the mortgagor's indebtedness nor injure substantial property rights. At the time the exemption provision with which we are concerned was enacted (March, 1935), there was no speculation as to the validity of the act, it having been upheld in the Blaisdell case. Thus the United States land bank commissioner would not have just grounds for turning down applications for loans secured by mortgages on Minnesota farms merely because there was a moratorium act in this state. In at least three instances mortgage moratorium acts of other states have been resorted to successfully for the purpose of obtaining extensions of the time within which to redeem from foreclosure sales made under mortgages held by joint stock land banks. Young v. Union Joint Stock Land Bank, 266 Mich. 83, 253 N.W. 225; Des Moines Joint Stock Land Bank v. Nordholm, 217 Iowa, 1319, 253 N.W. 701; Virginian Joint Stock Land Bank v. Hudson, 266 Mich. 644,254 N.W. 234; cf. Phoenix Joint Stock Land Bank v. Dewey (D.C.)8 F. Supp. 678.
I think the order should be affirmed.