Court Opinion

ID: 3508619
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:19:08.311961+00
Date Added: 2024-06-11T09:17:55.463766
License: Public Domain

I concur in the result.
I think that the statement in The Frissell Co. v. O'Brien,204 Minn. 398, 401, 283 N.W. 766, that every day the purchaser at the foreclosure sale is kept out of possession increases the mortgagee's loss is dictum that is not in accordance with the fact and should be overruled. The mortgagor's continued possession is often of as much benefit to the mortgagee as to the mortgagor. Such possession results in the preservation and maintenance of buildings, which might otherwise deteriorate and be destroyed, protection of the property, payment of taxes, and other benefits. There is a showing here that the mortgagor's possession was beneficial to both mortgagor and mortgagee during a long period when the building was unrentable. But when the mortgagor obtained a tenant, the mortgagee, who was several hundred miles away and unable to attend to that matter, wanted the possession and the rents.
Furthermore, giving the mortgagee the net rental compensates him for loss of possession. In our decision in the Blaisdell case, 189 Minn. 422, 432, 249 N.W. 334, 86 A.L.R. 1507, we held that application of income to carrying the property and reduction of the mortgage debt "goes far to giving compensation for the extension secured." The Supreme Court of the United States said [290 U.S. 425]:
"While the mortgagee-purchaser is debarred from actual possession, he has, so far as rental value is concerned, the equivalent of possession during the extended period," and [290 U.S. 446] "the relief afforded by the statute has regard to the interest of mortgagees as well as to the interest of mortgagors. The legislation seeks to prevent the impending ruin of both by a considerate measure of relief."
This view was adopted by the Supreme Court of the United States again in Wright v. Vinton Branch Mountain Trust Bank,300 U.S. 440, 57 S. Ct. 556, 81 L. ed. 736, 112 A.L.R. 1455, *Page 467 
in construing the Frazier-Lemke Amendment to the bankruptcy act (11 USCA, § 203[s]).
While we might take judicial notice that borrowing conditions have improved in recent years, the fact remains that the mortgagors have made ample showing to sustain a finding that conditions in the locality where the mortgaged property is located have not improved so as to make a loan on the property available to refinance the mortgage. The unavailability of loans continued there on account of unprecedented drouth with consequent loss of crops and substantial part of the income of the community, resulting in stagnation of business and stifling of demand for the property so as to make it unrentable.
The trouble with saying that we take judicial notice that borrowing conditions have greatly improved in recent years and concluding from that premise that the mortgagors might have obtained a new loan if there was equity in the property to warrant a loan at all is that the fact to be judicially noticed is directly contrary to the proved facts that borrowing conditions have not improved in the locality where the property involved is situated and that loans are not available there for this particular mortgage. We are confronted with the dilemma of saying that we will notice a fact judicially contrary to what it is actually or holding that judicial notice is only tentative and subject to verification in the particular case. In the first mentioned situation the doctrine of judicial notice should never be applied. In the second, inquiry as to the fact should be permitted. In Ohio Bell Tel. Co. v. Public Utilities Comm. 301 U.S. 292, 57 S. Ct. 724, 729,81 L. ed. 1093, the latter view was adopted. There the lower court took notice that a decline in prices was a ground justifying the commission's finding of the value of the utilities property for rate-making purposes. The Supreme Court of the United States pointed out that while the court might take notice that there had been a general price decline where the question is involved only collaterally, it could not do so where it involved the very point in issue. Here the situation involves an upturn rather than a *Page 468 
decline. While we might take judicial notice that borrowing conditions have improved generally in a case where the question is involved collaterally, we should not do so where that is the very point involved in the litigation. In the cited case, in speaking of the extent of price declines, the court said that [301 U.S. 302] "no rational concept of notoriety will include these variable elements," and held that when judicial notice is taken it has no other effect than to relieve one of the parties of the burden of resorting to the usual forms of evidence. Certainly that rule makes the doctrine of judicial notice square with actuality and serves to attain rather than obstruct justice. Otherwise, as the court pointed out in the cited case, the rule is in effect a "pretext for dispensing with a trial." See State ex rel. Attorney General v. Norcross, 132 Wis. 534,112 N.W. 40, 122 A.S.R. 998.
A two-year extension was granted. This, absent a showing other than that stated in the majority opinion, seems excessive. The case should be sent back for the retrial of this one issue.