Bennington County Savings Bank v. Lowry

SiebecKER, J. It is admitted that the defendant’ Lowry borrowed the $450 from the plaintiff and that the bank is a foreign corporation and at the time of making the loan had not complied with the provision of sec. 17707?, Stats., to obtain a license to do business in this state. Under the statutes of this state, when the loan was made in April, 1911, the mortgage, at the election of the defendant Loiory, was invalid as to the bank, which precluded the bank from enforcing the mortgage in any manner. Lanz-Owen & Co. v. Garage E. M. Co. 151 Wis. 555, 139 N. W. 393. By ch. 214, Laws of 1911, amending sub. 2, sec. 17706, it was provided that “Mortgages or trust deeds heretofore taken by foreign corporations to secure the payment of money loaned or advanced are hereby declared valid.” This act was approved May -26, 1911, which was subsequent to the giving of the mortgage involved here. It is not disputed but that this act validated the mortgage. It is a recognized rule that, when a contract is invalid by reason of some impediment which does not affect the merits or natural justice of the obligation, it is within the power of the legislature to remove such obstacle and validate the contract. This in no way deprives the parties thereto of any vested rights protected by the fundamental law [662] of tbe laud. “A party bas no vested right in a defense based upon an informality not affecting bis substantial equities.” Cooley, Const. Lim. (7th ed.) 529. Tbe healing statute must be confined to validating acts wbicb were witbin tbe power of tbe legislature to have authorized in tbe first instance. Nat. S. Co. v. Architectural D. Co. 226 U. S. 276, 33 Sup. Ct. 17; Single v. Marathon Co. 38 Wis. 363; Gross v. U. S. Mortgage Co. 108 U. S. 477, 2 Sup. Ct. 940; Pittsburg C. Co. v. West Side B. R. Co. 227 Pa. St. 90, 75 Atl. 1029; West Side B. R. Co. v. Pittsburgh C. Co. 219 U. S. 92, 31 Sup. Ct. 96, and cases there cited. Tbe mortgage having been validated by tbe act of 1911, it became in all respects as good and valid a contract between tbe parties thereto as if no impediment to its validity bad existed when it was made. Tbe natural result of this is that from tbe time of its validation it was witbin tbe protection of tbe juovisions 0£ sec. 12, art. I, of tbe state constitution, and sec. 10, art. I, of tbe federal constitution, forbidding tbe passage of any laws impairing the obligation of contracts. Tbe trial court was of tbe view that cb. 248, Laws of 1913, repealed tbe validating clause of the act of 1911 and declared valid only such mortgages as were taken by foreign corporations after May 26, 1911, and prior to January 1, 1914, and that this legislative act necessarily “implies tbe invalidity of all other mortgages taken by foreign corporations,” and therefore held tbe mortgage in litigation here to be void. Cb. 248, Laws of 1913, provides: “Mortgages or trust deeds taken by foreign corporations after tbe twenty-sixth day of May, 1911, and prior to January 1, 1914, to secure the payment of money heretofore or hereafter loaned or advanced pursuant to such mortgages or deeds of trust, are hereby declared valid. . . .” We discover nothing in the context of this act expressive of a legislative intent to declare void tbe mortgages wbicb bad been validated by tbe act of 1911. Tbe contention of appellant that tbe legislature, by omitting tbe validating part of [663] the 1911 act and enacting the foregoing, acted npon the theory that all mortgages prior to May 26, 1911, were then valid in the law, and that this status of such contracts having become fixed it was unnecessary to further specifically recognize them in the amendment of 1913, seems well founded in view of the objects sought to he accomplished by this legislation. All legislative efforts were evidently directed to legalize the mortgages rendered invalid under the original provisions of the statutes, and manifestly there was no intent to invalidate by the act of 1913 those legalized in 1911. Eurther, if the legislature had intended such a result the attempt would have failed under the constitutional provisions forbidding the passage of laws impairing the obligation of contracts. The mortgage in question is a valid mortgage in the hands of the plaintiff and is enforceable by it to obtain payment of the amount due on the note which it secures. The circuit court erred in dismissing the action. By the Court. — The judgment appealed from is reversed, and the cause remanded with direction for further proceedings according to law.