Case Name: Scobey v. Gibson
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1861-02-06
Citations: 17 Ind. 572
Docket Number: 
Parties: Scobey v. Gibson.
Judges: 
Reporter: Indiana Reports
Volume: 17
Pages: 572–587

Head Matter:
Scobey v. Gibson.
The act of June 4,1861, (Acts Spec. Sess. 1861, p. 79,) providing for the redemption of real property sold upon execution, &c., ko far us the same was intended to apply to sales on judgments rendered upon contracts existing at and before its passage, is in conflict with Art. 1, § 10 of the Constitution of the United States, which prohibits the passage of any law impairing' the obligation of contracts.
APPEAL from the Decatur Circuit Court.

Opinion:
Perkins, J.
The only question in this case is whether the redemption law of 1861, (Acts 1861, p. 79,) is to he I eld applicable to sales on judgments upon contracts existing at and before its passage. The act provides that in all cases of sales by the sheriff, &c., on execution, &c., after its passage, the sheriff' shall not give the purchaser a deed for, and possession of, the property sold, but only a certificate entitling him to a deed and possession in one year from the sale, if the property is not redeemed.
In legal effect, what is the operation of this statute? It is to prohibit, for one year, the absolute sale of property for the purpose of collecting a debt due. In place of such sale, it authorizes the sheriff to make a contract for the absolute sale of property after the lapse of one year's time, unless such contract shall be defeated by the performance of a specified condition, namely, tbe return of the purchase money paid, with interest, by the expiration of said year; it authorizes, in other words, the sheriff, in legal effect, to mortgage the debtor's land for one year, to any one wbo will advance the amount required by law, upon its appraised value, the mortgage to become absolute, and free from an equity of redemption, at the end of a yeai', if the money advanced is not repaid with interest.
What is the influence of, such a statute upon the collection of debts? Its tendency is to delay. It embarrasses tbe collection, because it deprives the creditor of the right which the law, at the date of his contract, gave him of selling the absolute fee of the debtor's real estate.
And the question'is, if held to operate upon existing contracts, will the act conflict with that clause of § 10, Art. 1 of the Constitution of the United Slates, which declares that no State shall pass any law impairing the obligation of contracts ? What constitutes such a law ?
A few years ago, the Legislature passed a law prohibiting the sheriff to sell the debtor's property unless the half of the appraised value was bid for it. Before that time, property had sold for what it would bring. The appraisement law was held not to operate on existing contracts; and why? Not because it forbade the sale of property for their enforcement; it did not do that; but because it deprived the sheriff of the absolute power to sell the fee at all events; it left him but the conditional power to sell; the power of selling if he could get a certain price, not otherwise. It tended to embarrass, and thereby to prevent the sale, and thus delay the collection of the debt. So, too, awhile ago, an additional stay of execution was given upon judgments, by an act of the Legislature. This act was held inoperative as to existing contracts; and why? Not because it canceled obligations, but because it delayed their collection by the process of the law. This was the natural, necessary, and intended effect of both of the above mentioned statutes, and it is, also, of the redemption law. If the decisions upon the operation of the first two named laws were right, and we are bound by them, then, beyond doubt, the redemption law, in question, must be held inoperative upon existing contracts. See the cases collected in Gavin & Hord's Ed. of R. S., Vol. 1, p. 10.
It is said, that where a purchaser bids off the property and pays the money under the present law, he has no right to object to the redemption, as he buys in face of the law; but it is a maxim, that every man is bound to know the law, and act accordingly. Hence, the man who buys does so knowing that the law will not, and can not, operate to deprive him of his deed and title; and he must be taken to make his bid in the light of, and influenced by, such knowledge. And, further, the law must be uniform in its operation, alike upon all.
Again, it is urged that the Legislature has a right to change legal remedies; that it is only the obligation of contracts that can not be impaired; and it is claimed that the redemption law affects the remedy only.
It is freely admitted that the State, for convenience, may c^anSe legal remedies; may vary the times of holding courts, shift jurisdiction from one to another, change forms of action, of pleadings and of process, &c.; and that such legislation may, incidentally, delay, somewhat, the collection of given debts; but such is not the purpose of this legislation, and while its validity is admitted, it may also be asserted, that the Legislature can not, under the guise of legislating upon the remedy, intentionally, in effect, impair the obligation of contracts; and it may be further laid down, that any legislation, professedly directed to the remedy, which de-. prives a party of one substantially as efficient as that existing at the making of the contract, does impair the obligation of the contract. Ind. Dig., § 55, p. 271. In Gantly's Lessee v. Ewing, 3 How. (U. S.) 707, Judge Catron, in delivering the opinion of the Court said: "This Court held in Bronson v. Kinzie, 1 How. 319, that the right, and a remedy substantially in accordance with the right, were equally parts of the contract, secured by the laws of the State where it was made." See, also, 1 Blackf. by Beele & Davis, p. 220, note. Also, 4 Cal. Rep. 127; 5 id. 401; 1 Manning (Mich.) Rep. 309. It may, perhaps, be questioned whether the redemption law in question is properly classed as legislation touching the remedy. It does not operate upon terms of court, upon pleading- or practice in obtaining judgment, nor upon process upon judgment. But Tiowever classed, it restricts, curtails the right of the judgment creditor, in relation to subjecting the property of the debtor to execution for the payment of given debts. It may not diminish the fund of the debtor applicable to the payment of his debts; nor did the appraisement law, nor the stay law; but it limits, curtails materially, and embarrasses the right of the creditor, in given cases, in subjecting the entire amount of the debtor's property subject to execution to the payment of the debt in suit. Curran v. Arkansas, 15 How. (U. S.) 304.
This Court judicially knows, and it must decide, the question, as one of law, upon its judicial knowledge, that the right to sell, at once, the entire, absolute fee simple in land, and give the purchaser possession, is worth more, will more likely to realize the amount of money due on a particular judgment, than the restricted right of selling a conditional interest in such land; and that, hence, the taking away of such absolute right may tend to defeat, in given cases, the collection of debts due. A purchaser will give more for an absolute title than a conditional one; and few moneyed men will be found to buy conditional titles as mere investments, which may be defeated by simply refunding them their money with ten per cent., when a much higher rate may be obtained on the most select securities. But suppose the act in question is to be regarded as directed to the remedy; still, as we have seen, an act thus directed may impair the obligation of contracts. It is very doubtful whether those cases decided upon the general rule of international law, that the lex loci governs as to the interpretation and effect to be given to the terms of a contract, and the lex fori as to the remedy upon it, are safe guides to rely upon in determining the force to be awarded to the constitutional provisión quoted. These express constitutional restrictions upon the legislative power are peculiar to American goVernment, and must be interpreted in accordance with the spirit and purpose of their adoption. Stay and lief laws, enacted by various States before the adoption of the Federal Constitution, were, in part, at least, the evil which it was designed to prevent the repetition of. The learned Chancellor Desaussure, of North Carolina., who lived in the times mentioned, and who went upon the Equity Bench in 1808, in a note to Glaze v. Drayton, vol. 1, p. 109, of his Reports, (a case decided in 1784,) says: "The Legislature, in consideration of the distressed state of the country, after the war, (Revolutionary war,) had passed an act preventing the immediate recovery of debts, and fixing certain periods for the payment of debts far beyond the periods fixed by the contract of the parties. These interferences with private contracts became very common with most of the State Legislatures, even alter the distress arising from the war had ceased in a great degree. They produced distrust and irritation throughout the community to such an extent that new troubles were apprehended, and nothing contributed more to prepare the public mind for giving up a portion of the State sovereignty, and adopting an efficient National Government, than these abuses of power by the State Legislatures." See, also, on this point, Rawle on the Constitution, and Sergeant's Constitutional Law.
We have been controlled, in coming to our conclusion, by the decisions bearing upon the question latest made by the Supreme Court of the United States. We may most safely, we think, presume that that Court will follow, and not depart from, those decisions. Should such be the case, it would be detrimental to the public should this Court decide the redemption laws operative upon existing contracts, thus leading debtors to suffer their lands to be sold upon the faith of a right to redeem, which the Supreme Court might take away. While, should this Court decide against the redemption, it will put debtors on their guard to take care of their property; and should the Supreme Court afterward decide in favor of redemption, the decision of this Court will not have worked harm to any great extent.
Per Guriam. — The judgment is reversed, with costs. Cause remanded, &c.