Louis Brandeis

“ But it must be assumed that the mortgagor will not get the property for less than its actual value. The Act provides that upon the creditor's request the property must be reappraised, or sold at public auction and the mortgagee may by bidding at such sale fully protect his interest. Nonpayment of taxes may imperil the title. Payments for upkeep are essential to the preservation of the property. These payments prescribed by the Act are in accordance with the common practice in foreclosure proceedings where the property is in the hands of receivers. ”

“ The first payment of such rental shall be made within one year of the date of the order staying proceedings, the amount and kind of such rental to be the usual customary rental in the community where the property is located, based upon the rental value, net income, and earning capacity of the property.'
The clause providing that 'the first payment of such rental shall be made within one year' is obviously capable of either of two constructions: One, that the mortgagor may not be required by the court to pay before the close of the year. ”

“ First. The mortgagee claims that the legislation is void on its face. It challenges the power of Congress to confer upon courts authority to grant to a mortgagor, under any circumstances, any of the relief provided for in subsection (s) of the new Frazier-Lemke Act. There has been no order granting a stay under paragraph 2 of subsection (s) . But the suit is not premature; for the fact that no stay order has been entered does not imply that an actual constitutional controversy is not presented. ”

“ No. 985, 74th Cong., 1st Sess., p. 5, pointed out that: 'The amended subsection (s) shortens the time of the stay of proceedings from 5 to 3 years, and * * * gives the court power to shorten that stay. It gives the court complete jurisdiction and custody of the property, with authority to fix the rental annually, and to sell perishable property and personal property that is not necessary for the debtor's farming operations. It will also be noticed that the court can require payments over and above the rental value. ”

“ The offer of composition must be in good faith (section 75, (c) , (i) , 47 Stat. 1471, 1472) , and if the debtor is beyond all reasonable hope of financial rehabilitation, and the proceedings under section 75 cannot be expected to have any effect beyond postponing inevitable liquidation, the proceedings will be halted at the outset. The practical administration of section 75 in the lower courts already affords ample evidence of the substantial protection afforded the creditor by this requirement of good faith in the initiation of proceedings under subsections (a) - (r) . ”

“ The bill as reported by the Senate Committee on the Judiciary inserted after the provision for appraisal a clause providing, 'That upon request in writing by any secured creditor or creditors, the court, in its discretion, if it deems it for the best interests of the secured creditors and debtor, may order the property upon which such secured creditors have a lien, to be sold at public auction ”

“ Since the language of the Act is not free from doubt in the particulars mentioned, we are justified in seeking enlightenment from reports of Congressional committees and explanations given on the floor of the Senate and House by those in charge of the measure. ”