Ziegler v. First National Bank of Volga (In Re Ziegler)

MEMORANDUM DECISION

PEDER K. ECKER, Bankruptcy Judge.

This case is before the Court on the issue of whether an assignment of rents clause contained in a mortgage must be perfected after default before the mortgagee is entitled to the rents.

FACTS

The debtors, Ronald and Judy Ziegler, own approximately 727 acres in Brookings County, South Dakota. On March 20,1978, the debtors entered into a loan transaction with the Federal Land Bank (FLB). They executed a variable interest rate note and a real estate mortgage, which included a clause assigning to FLB “the rents, issues, crops and profits arising…