CONSTITUTIONAL LAW--MORTGAGES--FRAZIER-LEMKE ACT

Authors

Abstract

In 1922 and 1924 appellee mortgaged property worth $18,000 to secure a loan of $9,000 from appellant which was to be repaid in installments over a period of thirty-four years. Default being made on the covenants in the mortgage, the mortgagee declared the full amount due and brought a suit to foreclose. Proceedings were stayed when the appellee sought relief under Section 75 of the Bankruptcy Act, but he was unable to obtain the requisite majority in number and amount to the composition proposed. The state court entered a foreclosure judgment and ordered a sale. The mortgagor then sought relief under sub-section (s) of Section 75, known as the Frazier-Lemke Act, which was passed June 28, 1934. In accordance with paragraph 3 of that Act the property securing the debt was appraised at $4,445. The mortgagee refused to consent to a sale of the property to the mortgagor at that price so the latter sought relief under paragraph 7. The bankruptcy court ordered that all proceedings to foreclose the mortgage be postponed for five years, that the mortgagor pay an annual rental of $325, and that the mortgagor be given the opportunity to purchase the property any time within the five year period at its then appraised value, or at a reappraised value, if requested by the lienholder. The appellant contended that the act was unconstitutional on two grounds: (1) that sub-section (s) of Section 75 is not a law on the subject of bankruptcy, and (2) that it deprives creditors of their property without due process of law. The Supreme Court of the United States, reversing the decisions of the lower courts, held the act unconstitutional. Louisville Joint Stock Land Bank v. Radford, 2 U. S. LAW WEEK, index p. 919 (1935).

Recommended Citation

CONSTITUTIONAL LAW--MORTGAGES--FRAZIER-LEMKE ACT, 33 Mich. L. Rev. 1210 (1935).
Available at: https://repository.law.umich.edu/mlr/vol33/iss8/5