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03/11/41 GUARDIAN DEPOSITORS CORP. v. POWERS

March 11, 1941

GUARDIAN DEPOSITORS CORP.
v.
POWERS



SYLLABUS BY THE COURT

1. CONSTITUTIONAL LAW -- IMPAIRMENT OF OBLIGATION OF CONTRACT -- DEFICIENCY AFTER STATUTORY FORECLOSURE OF MORTGAGES -- SET-OFF -- STATUTES.

Statute which affords to defendant mortgagor when sued for deficiency after foreclosure of mortgage by advertisement the right to set off the difference between the amount bid by mortgagee or holder of the mortgage interest and the fair value of the property at the time of the sale is not unconstitutional as an impairment of a vested substantive right even though the sale was held prior to time the act became effective since it permits proof that the mortgagee has already obtained satisfaction of his debt and merely denies further recovery (U.S. Const. art. 1, § 10; Mich. Const. 1908, art. 2, § 9; Act No. 143, Pub. Acts 1937).

2. MORTGAGES -- CREDITOR'S REMEDIES UPON NONPAYMENT.

A creditor holding a real estate mortgage as security, in the event of nonpayment of the debt, may have recourse (1) to an action at law on the note; (2) to an action at law on the covenant in the mortgage; (3) to foreclosure in equity with right to a deficiency judgment as fixed by the decree (3 Comp. Laws 1929, § 14364 et seq., as amended), or (4) to foreclosure by advertisement with a subsequent right to an action for deficiency (3 Comp. Laws 1929, § 14425 et seq., as amended).

3. MORTGAGES -- FORECLOSURE -- DEMORALIZATION OF REALTY MARKET.

When a mortgagee forecloses by advertisement he looks first to the security for the realization of his debt, and, when the realty market is demoralized, the legislature may properly set up new machinery to protect the debtor and secure to the creditor only that which is his due as no one has a vested substantive right to more than his due.

4. CONSTITUTIONAL LAW -- ACTION -- ALTERATION OF MANNER, METHOD AND TIME FOR RECOVERY -- IMPAIRMENT OF OBLIGATION OF CONTRACT.

The legislature may modify and alter the manner and method of recovery as well as the time within which actions may be brought without impairing the obligation of contract so long as remedy is not denied or so embarrassed with conditions and restrictions as seriously to impair the value of the right (U.S. Const. art. 1, § 10; Mich. Const. 1908, art. 2, § 9).

5. CONSTITUTIONAL LAW -- IMPAIRMENT OF OBLIGATION OF CONTRACT -- CHANGE OF REMEDY.

A statute is void as impairing the obligation of contract if it takes away all remedy for the enforcement of the contract, or if it leaves no substantial remedy therefor, but within such limitations the legislature may alter or abolish particular remedies, and may substitute one remedy for another. (U.S. Const. art. 1, § 10; Mich. Const. 1908, art. 2, § 9).

6. MORTGAGES -- FORECLOSURE BY ADVERTISEMENT -- STATUTES.

The right to foreclose mortgages by advertisement has always been subject to change by the legislature since the right is wholly dependent upon statute (3 Comp. Laws 1929, § 14425 et seq., as amended).

7. MORTGAGES -- FORECLOSURE BY ADVERTISEMENT -- NATURE OF PROCEEDING.

The right to foreclose a mortgage under statutory procedure is the act of a party and not a judicial proceeding and is only possible when the mortgage is so framed as to authorize it (3 Comp. Laws 1929, § 14425 et seq., as amended).

8. MORTGAGES -- FORECLOSURE IN EQUITY -- CONFIRMATION OF BID.

In equitable foreclosures the court, in the exercise of fair discretion, may decline confirmation of the sale if the amount bid is so inadequate that it shocks the conscience of the court (3 ...


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