Book Title
Business Law with UCC Applications 14th Edition

978-0077733735 Chapter 21 Part Five Case Study   

April 10, 2019
Part Five Case Study
Superior Savings Association v. City of Cleveland
Questions for Analysis
1. The case of Superior Savings Association v. City of Cleveland clearly supports the core legal
principle of stare decisis. The judge in this case cites more than twenty different cases as precedent,
2. In Louisville Joint Stock Bank v. Radford, 295 U.S. 555 at 594-95, 55 S.Ct. 854 at 865-866, 79
L.Ed. 1593 (1934), the five property rights listed are: “1. The right to retain the lien until the
indebtedness secured is paid; 2. The right to realize upon the security by a judicial public sale; 3. The
right to determine when such a sale shall be held, subject only to the discretion of the court; 4. The
3. In Paul v. Davis, 424 U.S. 693, 710-711, 96 S.Ct. 1155, 1164-1165, 47 L.Ed.2d 405 (1976),
Justice Rhenquist lists the following property rights that emerge from the Fourteenth Amendment: “It is
apparent from our decisions that there exists a variety of interests which are difficult of definition but
are nevertheless comprehended within the meaning of either "liberty" or "property" as meant in the Due
5. On the surface the case appears to be a vindication of the rights of the individual and a frustration
of the principle that is designed to insulate the government from the power of the people. However, a
close look at the step-by-step reasoning conducted by the court, indicates that the court (an arm of the
government) has done its best to protect the government from the rights and the power of the people
even though, in this case, the “people” are represented by a savings and loan institution (Still the S&L
is a corporate “person.”). First, the court points out that there is a question as to whether Fifth and
Fourteenth Amendment rights extend to mortgagees. The court would have preferred to find that such
rights do not extend to mortgagees, but in doing its research determines that such rights do extend to
mortgagees. Having been frustrated in its attempt to declare an early governmental victory for the city,
the court moves on to its second attempt to prevent the S&L from winning the case. The court does this
by observing that sometimes in emergency situations, the city (again read “government” here), can just
summarily remove a building without notice. Again the court which would have liked to have found an
7. Recording that mortgage notified all third parties that the mortgagee, Superior, had an interest in
the building at that address. Had the mortgage not been recorded, and Hughes had taken out a later
mortgage on the property which had been properly recorded by the second mortgagee, then the new
10. The proper measure of damages in this case would be the difference in value of plaintiff's mortgage
END of Part Five End Case