Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-03-18
JUDGE DENg0Rs MORTGAGE DECISION.


provided that the mortgagor should pay
all taxes assessed against the subject prop
erty, the mortgage can be made to pay
part of those taxes. It is true that Judge
benson has attempted to draw distinction
in this particular case. He says; III, by the
"terms of the contract made between the
"parties, the mortgagor had agreed to pay
&" all taxes assessed against the mortgage
debt, the subsequent adoption of a new
Constitution would not and could not
g change the terms Of that agreement.
" The mortgagor does not in this case con
tract to pay or repay taxes assessed
against the debt secured by the mort
gage, but only taxes imposed upon
90 said lot Of land and premises and which
&c may be in effect charge thereupon. -"
It appears to us that the Judges distinc-
ton here taken is an untenable refine
ment The mortgagor did not contract to
pay or repay taxes assessed against the
debt, for the obvious and conclusive rea-
son that the Constitution under which the
instrument was drawn did not provide for
the taxation Of debts. But it is to be as
sumed in every such case that the purpose
of the agreement entered into was to Sc
cure to the mortgage freedom from all
taxes that might be levied against the
property, and this mortgage, like all others
drawn under the old Constitution, was OBJ
viously influenced in all its conditions by
that consideration. 1t is indeed strange
argument that, because contract JAILED to
provide for conditions which did not exist
when it was made, therefore one of the
parties to it must suffer.
We cannot admit the force of Judge
Denson's distinction on this head. 1t ap-
pears to US that the only reasonable and
sound view of the contract is that which we
have indicated, namely that the mortgagor
agreed to pay all taxes levied upon the
property. This view necesaitates the con.
clusion that the Judges construction OF the
law is in direct contravention of the prin-
ciples whose binding force he has himself
so fully acknowledged. For he says sit
"may be laid down as an incontrovertible
proposition, and without argument, that
emo statute law or State Constitution can
impair the obligation of contracts, be-
"cause prohibited by Section-l0 of Article
81. of the Constitution of the United
estates, and this, Whether attempted b.
"direct or indirect means" In the pres.
emit case the obligations of contract have
been impaired, and by indirect means.
to be difficult. A mortgage is a contract by
and through which one party agrees to lend
the other certain moneys, on condition that
| he shall receive certain interest and secur-
ity for the loan. Now, whatever has the
effect of diminishing the value of the mort
gage In the hands of the holder, either by
impairing the value of the property which
is security for the debt, or by diminishing
the interest which is to be paid for the use
of the money loaned, is an impairment OF
the obligations of that contract. Nor can
there be any doubt that the effect of Judge
Densons decision is to diminish the value
OF the mortgages made under the old Con
stitutiop. To compel the mortgage to
pay any part of any tax founded upon the
mortgage in any way, no matter unde,
what color OF pretext, is to reduce the
value of his Investment to the full extent
of that tax.
The general effect of this decision, there
fore, is to give the new Constitution a
retroactive force, which is Of itself flat
violation of the United States constitu.
tional inhibition of er post .facto laws
and at the same time to violate the provi
sion cited by Judge benson, in regard tc
the impairing of the obligations Of con.
tracts. 1t would in fact be impossible tc
sustain the Judges view of the case except
by demonstrating that the operation o.
the new Constitution was not retrospective
and that it did not in any way diminish
the value of the contracts affected by it
All the Judges arguments regarding the
construction of the new Constitution pro
visions appear to US more ingenious thar
sound They remind us forcibly of The
endeavor of the man in the story to con
vince his friend, who had been clspped il
prison, that the act of imprisoning hin
was impossible. Judge benson holds
that the contract between mortgage anc
mortgagor is so altered by the new Consti
tuition that the former must pay a tai
which he never contracted to pay, anc
which practically changes the entire char
acter of his investment but, he says, this
must lot be regarded as impairing the OBJ
legations of contract, because the new
Constitution has made things taxable
which were not taxable before. The in
consequence OF this argument suggests the
story of the hardshell revivalist who once
addressed an audience thus Z" My brethren
"and sisters, you all love hogs fat, and
you all lovedoughnuts, and you all love
doughnuts fried in hogs fat. Then why
"don't you get religion %
i No matter through what cireuitous path,
the argument is carried, the facts of the
case cannot be concealed as altered. Il
is claimed by Judge benson that through
the operation of the new Constitution
mortgages made under the old Constitution
are to be deprived Of part of their value.
Twist it how one may this amounts to the
contention that the new Constitution has
changed the status of the aforesaid mortgage
and to the injury and loss of the mort
gage If this is not impairing the OBJ
legations of contracts, there is no meaning
in language, and no significance in facts
The value of the mortgages has beer
diminished; the nature of the contract has
been changed and by the new Constitu
ton. Back to this state of things al
discussion must eventually come, and We
are unable to perceive how the soundnes'
of Judge Denson's reasoning can be allowed
under the circumstances. As the case be