Wilder v. Campbell

MORGAN, C. J. (After Stating the Facts.) — The only question presented to this court is, Is the assignee or purchaser entitled to his deed at the end of six months from the date of sale, or must the mortgagor be allowed one year in which to redeem, under the amendment to section 4492 of the Session Laws of 1895, page 34, approved March 5, 1895. By this amendment to section 4492 the judgment debtor or redemptioner is given one year from the date of sale within which to redeem real estate sold under execution 'or decree of foreclosure. Under the law as it existed prior to this amendment, section 4492 gave the judgment debtor only six months within which to redeem such property. It is claimed by the respondent that the law referred to above does not apply to mortgages entered into before its passage, and that in this case the mortgagor has but six months in which to redeem from a sale under a decree, and that therefore he was entitled to his deed at the time the demand was made, to wit, on the thirtieth day of September, 1895. This amendment to the section not only affected the remedy given to the mortgagee, inasmuch as it prevents him from getting the ownership and possession of the mortgaged property as soon as he otherwise would by the law which was in force at the time the contract was made; it also gives the mortgagor an equitable estate in the land which, before the passage of this act, he did not have. In Bronson v. Kinzie, 1 How. 320, the supreme court of the United States, in a similar case, in speaking of the laws of Illinois passed after the mortgage in that case was given, says: “As concerns the law of February 19, 1841, it appears to the court not to act merely on the remedy, but directly upon the contract itself, and to ingraft upon it 'new ■conditions injurious and unjust to the mortgagee.” It declares that, although the mortgaged premises should be sold under the decree of the court of chancery, yet that the [699] equitable estate of the mortgagor shall not be extinguished, but shall continue for twelve months after the sale. If such rights may be added to the ordinary contract by subsequent legislation, it would be difficult to say at what point they must stop. The equitable interest in the premises may in like manner be conferred upon others, and the right to redeem may be so prolonged as to deprive the mortgagee of the benefit of his security, by rendering the property unsalable for anything like its value. This law gives to the mortgagor an equitable estate in the premises, which he would not have been entitled to under the original contract, and these new interests are directly and materially in conflict with those which the mortgagee acquired when the mortgage was made. Such modification of a contract by a subsequent legislature, without the consent of one of the parties, unquestionably impairs its obligations, and is prohibited by the constitution. In the case of Louisiana v. New Orleans, 102 U. S. 206, Mr. Justice Field, in delivering the opinion of the court, says: “The obligation of a contract, in the constitm tional sense, is the means provided by law by which it can be enforced — by which the parties can be obliged to perform it. Whatever legislation lessens the efficacy of these means impairs the obligation. If it tends to postpone or retard the enforcement of a contract, the obligation of the latter is to that extent weakened. Any authorization of the postponement of payment, or of means by which such postponement may be effected, is in conflict with the constitutional inhibition.” In Green v. Biddle, 8 Wheat. 84, the supreme court of the United States says: “The objection to a law on the ground of its impairing the obligation of a contract can never depend upon the extent of the change which the law effects in it. Any deviation from its terms, by postponing or accelerating the period of performance which it prescribes, imposing conditions not expressed in the contract, or dispensing with the performance of those which are, however minute or apparently immaterial in their effect upon the contract of the parties, impairs its obligation. Upon this principle it is that if the creditor agrees with his debtor to postpone the day of payment, or in any other way to change the terms of the contract without the consent of the surety, [700] the latter is discharged, although the change was for his advantage.” (See, also, Watkins v. Glenn, 55 Kan. 417, 40 Pac. 316; Seibert v. Lewis, 122 U. S. 284, 7 Sup. Ct. Rep. 1190.) Sutherland on Statutory Construction, at page 625, has the-following language: “A law which takes from a mortgagee the-right of possession until after foreclosure, a law postponing-the right to sue on the note or bond until after foreclosure, ess tending redemption or shortening redemption, impairs the-obligation of the contract, and is within the prohibition of the-constitution.” The case of Gargill v. Power, 1 Mich. 369, is a-case in point. The facts are as follows: A mortgage containing a power of sale was given in January, 1847, and the mortgaged premises were advertised and sold under the power in-July, 1848. Between the giving of the mortgage and the-sale, the law regulating the time of redemption by the mortgagor was changed from two years to one year. It was held that the law in existence at the time the mortgage was executed and delivered was a part of a contract, that the mortgagor had two years from the sale to redeem it, and that the-law in force at the time the sale took place, restricting the-redemption to one year, was unconstitutional so far as it respected mortgages in existence at the time the law took effect.. In Edwards v. Kearzey, 96 U. S. 595, the court holds: A remedy subsisting in a state when and where a contract is made- and is to be performed is a part of its obligation, and any subsequent law of a state which so affects that remedy as to-substantially impair and lessen the value of a contract is forbidden by the constitution of the United States, and is therefore void. Further on, the court says, in illustration of the-principle. “That it is the established law of North Carolina that stay laws are void, because they are in -conflict with the-national constitution. This ruling is clearly correct. Such-laws change the terms of a contract. It impairs its obligations by making it less valuable to the creditor, and it does this solely by operating on the remedy. The contract is not-otherwise touched by the offending law.....Let us suppose-a case. A party recovers two judgments — one against A, and the other against B, — each for the sum of $1,500, upon a prom [701] issory note. Each debtor has property worth the amount of the judgment, and no more. The legislature thereafter passes a law declaring that all past and future judgments shall be collected in four equal annual installments. At the same time, another law is passed which exempts from execution the debtor’s property to tho amount of $1,500. The court holds the former law void, and the latter valid. Is not such a result a legal solecism? Can the two judgments be reconciled— one postponing the remedy, and the other destroying it? If it may exempt property to the amount here in question, it may do so to any amount. It is as regards the mode of impairment we are considering. It would annul the inhibition of the constitution, and set at naught the restrictions it was intended to impose.” In Goenen v. Schroeder, 8 Minn. 387 (Gil. 344), the following are the facts: A mortgage was executed on the premises in question by the defendant and wife, on the third day of August, 1853, which was to pay a certain sum of money in eight months from this date. Default was made on the twenty-sixth day of October, 1861. The land was sold by virtue of the power contained in the mortgage, and purchased by the plaintiff for the sum of $280.59. The proper certificates were executed by the sheriff, and, the premises not being redeemed by the first day of November, 1862, the sheriff on that day executed and delivered to the plaintiff, as purchaser, a deed to the same. On the seventh day of April, 1863, the plaintiff demanded possession of the premises of the ■defendant, who refused to deliver them up. This action was brought to recover the premises. The law in force at the time the mortgage was given gave the mortgagor but one year in which to redeem after sale under power and foreclosure by judgment. The court held that the act of March 10, 1860, passed after the making' of the mortgage and before the sale of the land by virtue of the mortgage, which extended the time of redemption to three years, did not apply to mortgages, •executed before its passage, which contained powers of sale and were foreclosed under them; and says, further, that: “It is clear that the legislature of 1860 had no power to change the time of redemption in the mortgage under consideration. [702] .... The cases we have decided under this law hold this, without qualification, and place it upon the ground that it will be impairing the obligation of a contract to so do.” These cases, and many others quoted in the decisions above referred to, make it clear that both the supreme court of the United States and many of the courts of last resort in the several states hold that the passage of a law extending the time of redemption, enacted between the time of the making of the-contract embodied in the mortgage and the time of sale under the decree of foreclosure, cannot affect such mortgage. To-hold otherwise would be to hold that a law might be passed impairing the obligation of contracts, which is positively forbidden both by the constitution of the United States and the constitution of our own state. The reasons given in these.various decisions are abundant and convincing. It is scarcely necessary to rehearse them in the present case. We must hold, therefore, in the case at bar, that the amendment to section 4492 by the act of the legislature of March 5, 1895 (Sess. Laws 1895, p. 34), does not affect sales under foreclosure of mortgages where the mortgages was executed and recorded prior to the passage of the act. The judgment of the district court is affirmed, with costs to the respondent. Sullivan and Huston, JJ., concur.