Court Opinion

ID: 6640632
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:45:01.1648+00
Date Added: 2024-06-11T15:59:13.693563
License: Public Domain

Emmett, C. J.
By the Court. On the 5th day of February, 1857, the Defendant and wife gave a mortgage to the Plaintiff, on certain real property in Ramsey County, to secure the payment of $2000, in one year, with interest at the rate of two per cent, per month, until paid. On the 7th day of August, 1858, Defendant having failed to pay, the Plaintiff commenced an action in the District Court to foreclose the mortgage, and such proceedings were had therein, that the court, on the 5th day of May, 1859, ordered the mortgaged property, or so much thereof as might be sufficient, Jo be sold by the Sheriff to satisfy the amount due, giving to either party the right to purchase at the sale, and ordering that the Sheriff make a deed to the purchaser, and that, on the production of such deed, he be let into the possession; and, also, that the Defendant and wife, and all claiming through or under them, be barred of all equity of redemption. In pursuance of this order, the Sheriff, proceeding as upon oi’dinary execution, sold all of the mortgaged premises to the Plaintiff on the 15th day of July, 1859, and on the same day executed a deed to him of the property purchased, after the usual form of Sheriff’s deeds. After-wards, on the 30th day of July, 1859, the Plaintiff produced this deed to the Defendant, and demanded possession of the premises, but the Defendant refused to surrender the possession. It further appears that the Defendant and wife just *301pridi* t& the sale by tbe Sheriff, bad conveyed all of tbe mortgaged premises to one J. James Herr, and at tbe time of tbe Plaintiff’s demand of possession, tbe Defendant was claiming to bold, as tbe tenant of said Herr, and bad as sncb tenant and as agent for Herr, on tbe 1st day of August, 1869, tendered to tbe Plaintiff tbe sum of seventy-five dollars, as tbe interest on tbe sum for wbicb tbe property was sold, at tbe rate of twelve per cent, per annum, for tbe term of three months from tbe day of tbe sale. This tender of interest tbe Plaintiff refused to accept, and on tbe 23d of August, 1859, commenced tbe present action, before a Justice of tbe Peace of the County, to recover possession of tbe premises. Tbe Justice gave judgment for tbe Plaintiff, and awarded restitution. An appeal was taken to tbe District Court, where a similar judgment was rendered, and tbe Defendant then appealed to this Court. He insists that under tbe Statute of July 29, 1858, entitled “An Act to Begtilate tbe Foreclosure of Peal Estate,” be might retain possession for one year after tbe sale, by paying tbe interest on tbe purchase money, at tbe rate of twelve per cent, per annum, and that bis tender of three months’ interest was sufficient for tbe time, because, as be claims, tbe Statute does not require tbe interest for tbe whole year to be paid in advance. And be' makes a further point (not made in the Court below), that a Justice of the’ Peace has not jurisdiction of an action to recover possession of real property against a mortgagor who bolds over after a sale under a judgment of foreclosure.
On tbe other band, tbe Plaintiff contends that tbe Statute of July 29, 1858, cannot be applied to this sale without impairing tbe obligation of tbe mortgage contract, wbicb was made prior to the passage of tbe law, and that in any event, tbe mortgagor could not retain possession by paying one year’s interest in advance.
In tbe case of Grimes vs. Bryne, 2 Minn. 89, where it was insisted that the exemption law of August 12, 1858, could not be applied to contracts made prior to its enactment without impairing tbe obligation of such contract, this Court held, that although tbe law exempted property not exempt from execution at tbe time tbe contract was made, yet it affected tbe *302remedy only, and not in such a manner as to impair the obligation of the contract. That the Legislature has control of the remedy, and the question for the court in such cases is not whether the power exists and can be exercised, but whether the exercise of it in any particular case amounts to an abuse of that power, but that no adjudicated case can be authority for another, unless the facts are identical.
Let us, then, inquire whether, by the passage of the Act of July 29, 1858, the Legislature abused the power vested in it to control the remedy, and whether the Act can be applied to contracts made prior to its enactment, without a violation of the State or Federal Constitution. This inquiry involves an examination of the practice in our courts, and of the remedies in force at the time this mortgage was made.
For the first few years of our Territorial existence, our District Courts exercised their equity powers according to the usual chancery practice; and during that time the judicial remedy on mortgages was by bill in chancery for a strict foreclosure, or to have the property sold, and the proceeds applied in satisfaction of the mortgage. But even when a strict foreclosure was sought, the Statute expressly recognized the power of the court to order the mortgaged property to be sold.
The Legislature, however, by an Act, approved May 5,1853, abolished the Court of Chancery as a distinct tribunal, and also all distinctions then existing between the practice and proceedings at law and in equity, and expressly directed that all equity and chancery jurisdiction should thereafter be exercised, and that all suits, applications, and proceedings then enforced by chancery jurisdiction, including the foreclosure and satisfaction of mortgages, should be' commenced, prosecuted and conducted to a final decision and judgment, by the process, pleading, trial and proceedings prescribed in civil actions. This Act, though it took from the courts none of their equity powers, yet in effect repealed all Statutes relating to the mode of practice and proceedings in chancery, and prescribed but one form of action for the enforcement or protection of private rights, or the redress of private wrongs, whatever might be the nature of the action. The Statutes concerning civil actions, and regulating the practice and proceed*303ings therein, so far as they can be made to apply, are those, therefore, by which we are to be governed. Had these Statutes from the beginning applied to suits and proceedings in equity, as well as to actions at law, many distinctions now urged would never .have been thought of, and we think that they should now receive the same construction and interpretation that would have been given had the Court of Chancery and the distinctions in practice between law and equity been abolished in the first instance, and we had never had any other practice act than that prescribed in civil actions.
If, then, there be but one form of action, and the Statutes concerning civil actions apply as well to suits in equity as actions at law, is there any reasonable ground for distinguishing sales of real estate, made by order or judgment of the court upon proceedings for the foreclosure or satisfaction of mortgages from other sales upon execution ? Does not the same general law apply to all sales of real estate upon an execution against the property of a debtor? The sale is but the result of the judgment of the court in either instance. In the one case, there is a general judgment against the party enforced by an execution against his property generally, and directed to the Sheriff of the county. In the other, there is a judgment for the sale of particular property, in satisfaction of a debt, enforced by a special execution directed to the Sheriff or other person appointed by the court to execute it. Why, then, should the right of redemption attach to a sale upon a judgment in the one instance and not in the other ? Does the Statute make the distinction ? The Statute provides, that upon a sale of real property on execution, when the estate is less than a leasehold of two years unexpired term, the sale shall be absolute, but that in all other cases the property is sold subject to the redemption therein provided. R. S. Chap. 71, Sec. 112. And is not a sale of mortgaged premises under the judgment or order of the court a judicial sale ? The Act of May 5, 1853, expressly says, that proceedings for the foreclosure and satisfaction of mortgages are to be governed by the proceedings prescribed in civil actions. ■ Shall we, then, adopt all the provisions of the Statutes concerning civil actions and proceedings, and the rights *304of parties therein, both before and after judgment, and except those alone which relate to the right of redemption ? W e do not think there is any warrant for such distinction. If the property is fairly exhausted, and the proceeds applied in satisfaction of the mortgagee’s claim, he obtains all that in justice he is entitled to under the mortgage contract, and perhaps all that he has asked for. Of what particular interest then can it be to him whether there be a right of redemption or not ? He is not affected by it, unless he obtain permission to bid at the sale, and become the purchaser, but this he may easily avoid. If he purchase, his subsequent rights depend rather on his contract of purchase than anything contained in the mortgage, and he stands in the precise condition of any other purchaser, except that his purchase is examined with more jealous care by the courts, but there is no legal presumption that he alone, of all the world, will become the successful bidder. If the property, by reason of the right of redemption, will not, in the opinion of the mortgagee, sell for what it is really worth, let him not ask for a sale, but for a strict foreclosure, (which he may obtain by showing that his claim would be seriously affected by a sale), and then if the mortgagor does not redeem from the forfeiture, provided by the mortgage, within the time or times allowed by the court,,his equity of redemption will be foreclosed, and the mortgagee can take the property, which would be all that his mortgage calls for. But when the mortgagee himself asks for a sale, it may reasonably be presumed that the remedy he asks for is sufficient for his purpose, and that he prefers the time of redemption given by the Statute to that which would be given by the court before the equity of redemption could be foreclosed; and pursues this course, in order to obtain a remedy over against the mortgagor, for any balance that might remain after exhausting the property. The objection, however, that property coupled with the right of redemption will not sell for its real value, is one which the courts should take into consideration before they order it to be sold, upon proceedings for a strict foreclosure of the mortgage. They should not in any case order a sale, when the rights of either party would be seriously endangered thereby. But when ordered, the sale is presumed to be for the interest *305of th'e parties, and there is no presumption that property at public sale will not bring its full value.
But it is said that sometimes, owing to the general scarcity of money, no one but the mortgagee .is likely to bid at the sale, and that he will have to bid all the property is worth, or it will be redeemed. "We regard this as an argument rather in favor of, than against the right of redemption, for, without a redemption, the mortgagee, in the instance suggested, might be able to obtain the property on his own terms, while, if the mortgagor has the right to redeem, the danger of sacrifice is not so imminent, and I can see no great injustice in a Statute which permits a redemption, upon the terms of repaying the purchase money, with interest at a rate equal to, or greater than the usual legal rate. Indeed, courts of equity have frequently interfered, when mortgages have been pressed in times of general embarrassment, and deferred the sale, or time of redemption until the difficulties were removed.
But, we will not discuss the policy of a statutory redemption. "We are satisfied that the Act of May 5,1853, places all judicial sales upon the same footing, whether the sale is upon a judgment in proceedings to foreclose or satisfy a mortgage, or an ordinary judgment for the recovery of money; and we consider the Act of July 29, 1858, so far as it gives a right to redeem from mortgage sales, as merely declaratory of the existence of that right.
Looking, then, to the law as it existed at the time the mortgage in this case was executed, we find that the sixty days redemption given by the general law of 1851, on all judicial sales, had been extended to. one year, by an amendment made in 1851. Sess. Laws of 1854, p. 103. The mortgagor, therefore, under this amendment, had the right to retain possession and redeem at any time within one year, upon repaying the purchase money with interest, at the rate of ten per cent, per annum. The Act of July 29,1858, however, changed the rate of interest to twelve per cent., and made its payment the condition upon which the mortgagor could retain possession. The constitutional objection, therefore, so earnestly insisted on by the Plaintiff, would not avail him in any event, for the time of redemption was not changed, and the alterations that are made are adverse to the ^Defendant,
*306But, should we be wrong even, in the view we have taken of the law of 1853, there can be no doubt that it was intended by the Act of July 29, 1858, to confer the right to redeem from sales made in judicial proceedings to foreclose, or satisfy mortgages. And we recognize the power of the Legislature to enact such a law. It relates exclusively to the remedy, and we are unable to see that mortgagees are deprived by it of any rights given by their contract. The old Chancery Act does not give to either party the absolute right to have the property sold, on proceedings to foreclose or satisfy mortgages. It merely recognizes the authority of the court in the exercise of its chancery powers to decree a sale, if the equities of the case require it. Nor does the mortgage proper stipulate for such a sale. The contract of the mortgage, strictly carried out, gives to the mortgagee the property, upon a breach of the conditions, but nothing beyond. Whatever else he may obtain, is by virtue of the contract which the mortgage is given to secure. And if he sues upon that contract, there can be no doubt of the mortgagor’s right to redeem. How then can it be said, that the Legislature, by giving a right of redemption upon mortgage sales, made in judicial proceedings, violates the mortgage contract, or any light belonging to the mortgagee ? He has, it is true, a right to a remedy, but not to any particular remedy, and we have already seen that the remedy which comes nearest enfprcing the mortgage according to its terms, that of strict foreclosure, is still open for him to pursue.
The Supreme Court of the State of New York, in a well considered opinion, James vs. Stull, 9 Barb. 482, held that a Statute of that State authorizing sales of mortgaged premises, under the power of sale contained in a mortgage, upon a notice of t/wel/oe weeks, is not unconstitutional and void, so far as it operates upon mortgages in existence at the time of its passage, notwithstanding that previous to that Statute a notice of twenty-four weeks was necessary; and that the authority given to the mortgagee to sell according to law, should be construed to mean according to the law in force at the túrne such sale became neaessa/ry. See also Morse vs. Gould, 1 Kernan 281. In Butler vs. Palmer, 1 Mill, 324, the same court held that a Statute which operated to lessen the time of redemption was not un*307constitutional, although the mortgaged property had been sold under the former law, subject to one year’s redemption, and the master’s deed specified that it might be so redeemed. The same principle was recognized in People vs. Livingston, 6 Wend. 526, 530, where a creditor under one Statute had acquired a right to redeem in a certain form, and a subsequent enactment repealed that Statute, and changed the form of redemption. Savage, Chief Justice, was of opinion that an attempt to redeem under the old form was nugatory. To my mind these decisions go far towards establishing the position that if the Legislature may thus shorten the time of redemption, it may also extend it. If the time may be reduced one half, or to any extent, when the right to redeem has already accrued, and the time has commenced running, it certainly may be abolished altogether as to sales yet to be made, and, if a right to redeem 'may be abolished, or extended without impairing the obligation of contracts, why may it not be created ? The Legislature of a State, representing as it does, the sovereign power, has absolute power over all subjects of legislation, except when limited by the Federal or State Constitution, Unless thus restrained, it may control even vested rights, and, although many cases can be found, showing- a disposition on the part of courts to construe statutes which provide new exceptions, or create new defences, as not applicable to contracts, or rights of action existing at the time of their enactment, yet it is not conceivable, that after allowing the few restrictions to be found in the Federal and State Constitutions, any further bounds can be set to legislative power by written prescription. 1 Hill 329; Charles River Bridge vs. Warren Bridge, 11 Pet. 420.
Believing then, as we have before stated, that the legislature has control of the remedy, and may alter it in any manner, that does not impair the obligation of the contract, and being unable to discover in the act of July 29,1858, any abuse of this legislative discretion, we hold: That it is not a violation of the State or Federal Constitution, whether as applied to contracts made prior or subsequent to the time of its enactment: That the Defendant was bound, as the condition upon which he could retain possession, during the time of redemption, to pay *308to the purchaser interest upon the amount of the purchase' money according to the terms of that act: That the interest is required to be paid in advance for the whole time allowed for redemption: and that the Defendant having failed so to pay, or tender the interest, was not entitled to the possession as against the purchaser.
It is however urged by the Defendant that this action was improperly brought before a Justice of the Peace, because the Statute which confers jurisdiction on Justices of the Peace, in forcible entry or detainer, does not, in terms, include a case where a mortgagor holds over after a sale on foreclosure of a mortgage in chancery. Sec. 12, Chap. 87, Rev. Stat. 1851.
That Statute was passed while we yet had a separate chancery practice, and did not include cases of that kind, they being otherwise fully provided for by the 58th section of chapter 91 of the same act, which authorizes the court of chancery, on the coming in of the report of such a sale, to decree and compel the delivery of the possession of the premises to the purchaser, without calling upon a Justice of the Peace for assistance to enforce its decrees.
But, does the effect which we have given to the act of May 5th, 1853, obviate this objection? We think not. The sale in such a case, it is true, is a sale upon execution within the meaning of the forcible entry and detainer law, but, it will be found that by the terms of that law, an action cannot be commenced before a Justice of the Peace, after a sale upon execution, until after the expiration of the time for redemption; and, as the time for redemption in this case had not expired, the purchaser, although entitled to the possession, could not maintain this action before a Justice of the Peace.
Atwater, J.
I agree with the conclusion arrived at by the Chief Justice, as to the effect of the law of 1853, and the validity of the law of 1858, in its application to contracts made prior to its passage, but dissent from much of the reasoning of his Honor, embraced in the foregoing opinion.
*309Elandrau, J.
It is quite clear to me that the Justice of the Peace had uo jurisdiction under the Statute to entertain and decide this case upon its merits. The mortgagor had the right to redeem the land under the act of July 29th, 1858, and until the time had expired within which this right could be exercised the Justice could not try tbe question of tbe right to tbe possession. Com. Stat. 651, Sec. 12. This point alone is entirely fatal to tbe whole case, and cuts oif tbe necessity of an investigation of tbe merits. After deciding that tbe Court below bad no jurisdiction of tbe subject matter of tbe action, anything that we should say upon the merits would be of no force or authority as a precedent for our future government; therefore while I fully concur in tbe conclusions arrived at by tbe Chief Justice in bis opinion as to tbe disposition to be made of tbe case, and all tbe reasoning that be brings to bear in support of such conclusions, I deem it advisable in order to prevent any future uncertainty, to say, that tbe reasoning of tbe Chief Justice in support of tbe power of tbe legislature to extend the time of tbe redemption on mortgage sales under pre-existing mortgages, should be confined exclusively to sales made by order of tbe courts in tbe exercise of their equitable powers, and not to such sales as may resijlt from tbe express contract of tbe parties.