Court Opinion

ID: 3523837
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:36:01.43994+00
Date Added: 2024-06-11T13:55:11.179964
License: Public Domain

ON MOTION FOR REHEARING.
Appellants appear to be laboring under the misapprehension that we have overlooked the rule that a surety bond must be construed so as to operate prospectively unless the intention that it shall operate retrospectively is made manifest by its terms. We have been mindful of that rule in construing the statute which fixes the terms of the bond, and we think we have construed the statute in consonance with that rule. The statute clearly requires the bond to cover taxes accrued, as well as taxes accruing during the year allowed for redemption, and we have instanced the obligation of the mortgagor in possession to protect the security, given by the mortgage, from impairment by the accrual of taxes, to show that the construction which makes the bond cover taxes accrued prior to the foreclosure, as well as taxes accruing during the year allowed for redemption, is a reasonable construction, and not an unreasonable one as contended by appellants. Taxes are peculiar in their effect upon the security given by a mortgage, in that they come on by operation of law subsequent to the giving of the mortgage and take precedence over the mortgage and thus impair the security, unless *Page 858 
they are paid. It is pertinent to observe that the statute makes the bond retrospective in another particular, that is, in that it requires that the bond cover all interest accrued prior to the foreclosure sale on any prior encumbrance. The term, "any prior encumbrance," evidently refers to any encumbrance existing prior to the giving of the mortgage. In case of a mortgage given subject to a prior encumbrance the security given is the equity of redemption, and accrued interest on the prior encumbrance, if unpaid, impairs the security given just as accrued taxes, if unpaid, impair the security. Why should the bond cover the one impairment and not the other in case the mortgagor is allowed by virtue of the bond to prolong his possession of the mortgaged property and extend the time for the payment of the mortgage debt for an additional year?
Appellants undertake to give the word "accrued" a useful purpose in the statute on the theory that there is a possibility that some taxes may have accrued subsequent to the foreclosure sale and prior to the execution of the bond, and that the word "accrued" is intended to cover such taxes. The trouble with this theory is that the language of the bond as required by the statute is ample to cover such taxes without the use of the word "accrued." The year allowed for redemption by the terms of the statute is the year succeeding the foreclosure sale, not the year succeeding the giving of the bond, and the statute, without the word "accrued," requires the bond to cover all taxes "accruing during such year allowed for redemption." If this language, without more, is not ample to cover the whole redemption year, then it does not mean what it plainly says. We do not see how this language could be made more comprehensive by the use of the word "accrued" unless it was intended to reach and cover taxes accrued prior to the commencement of the redemption year.
The Commissioner recommends that appellants' motion for a rehearing be overruled.