Barnitz v. Beverly, 863

• Decision Date: 18 May 1896
• Docket Number: No. 863,863
• Citation: 41 L.Ed. 93,16 S.Ct. 1042,163 U.S. 118
• Parties: BARNITZ v. BEVERLY
• Court: U.S. Supreme Court

163 U.S. 118

16 S.Ct. 1042

41 L.Ed. 93

BARNITZ

v BEVERLY.

No. 863.

May 18, 1896.

On November 1, 1885, George A. Kirtland executed to Martha Barnitz several promissory notes, covering a principal debt of $1,500 and interest, payable semiannually for five years, at the rate of 8 per cent. per annum, and after ma- turity at the rate of 12 per cent. per annum. These notes were secured by a mortgage of the same date upon a quarter section of land in Shawnee county, Kan. The principal note and the last note for interest not having been paid, an action was commenced, on January 21, 1893, in the district court of Shawnee county, by Martha Barnitz, to recover on said unpaid notes, and to foreclose the mortgage. John L. Beverly and others were made co-defendants with Kirtland. On July 7, 1893, a judgment was rendered against Kirtland for the sum of $2,113.46 and costs, and against him and the other defendants for the foreclosure of the mortgage and the sale of the mortgaged premises. Appraisement having been waived, the judgment, pursuing the laws of Kansas, provided for a stay of execution for six months, and that interest should run at the rate of 12 per cent. per annum. On January 9, 1894, an order of sale was issued; and on February 12, 1894, the mortgaged property was sold thereunder at sheriff's sale to Martha Barnitz for the sum of $2,000. On February 16, 1894, a motion was filed in the district court for a confirmation of the sale; and this motion came on for hearing on February 26, 1894, when Beverly appeared, and claimed to be the owner of the premises, by virtue of conveyances since the date of the mortgage, and to be in possession thereof in good faith by a tenant, and asked the court to order the sheriff to execute to the purchaser only a certificate of purchase, as provided for by chapter 109 of the Laws of Kansas of 1893. The sale was confirmed, and Beverly's motion was overruled, and the court ordered that the sheriff should execute to the purchaser, Martha Barnitz, a deed for the premises.

John L. Beverly took the case on error to the supreme court of the state, and that court, on April 30, 1895, affirmed the judgment of the district court. 40 Pac. 325. A motion for a rehearing was subsequently allowed (the membership of the supreme court having been in the meantime changed); and on December 7, 1895, the supreme court reversed and set aside its previous decision and judgment (42 Pac. 725), reversed the judgment and ruling of the district court, and directed that a sheriff's deed should not be executed to the purchaser, but that a cer- tificate of purchase should be given, as provided for by chapter 109 of the Laws of 1893.

To this judgment of the supreme court of Kansas a writ of error was sued out from this court.

Chapter 109 of the Laws of 1893 is as follows:

'Section 1. After sale by the sheriff of any real estate on execution, special execution, or order of sale, he shall, if the real estate sold by him is not subject to redemption, at once execute a deed therefor to the purchaser; but if the same is subject to redemption, he shall execute to the purchaser a certificate containing a description of the property and the amount of money paid by such purchaser, together with the amount of costs up to said date, stating that unless redemption is made within eighteen months thereafter according to law, that the purchaser or his heirs or assigns will be entitled to a deed to the same: provided, that any contract in any mortgage or deed of trust waiving the right of redemption shall be null and void.

'Sec. 2. The defendant owner may redeem any real property sold under execution, special execution, or order of sale, at the amount sold for, together with interest, costs and taxes, as provided for in this act, at any time within eighteen months from the day of sale as herein provided, and shall in the meantime be entitled to the possession of the property; but where the court or judge shall find that the lands and tenements have been abandoned or are not occupied in good faith, the period of redemption for defendant owner shall be six months from the date of sale, and all junior lien holders shall be entitled to three months to redeem after the expiration of said six months.'

'Sec. 23. Real estate once sold upon order of sale, special execution, or general execution, shall not again be liable for sale for any balance due upon the judgment or decree under which the same is sold, or any judgment or lien inferior thereto, and under which the holder of such lien had a right to redeem within the fifteen months hereinbefore provided for.

'Sec. 24. The holder of the certificate of purchase shall be entitled to prevent any waste or destruction of the premises purchased, and for that purpose the court, on proper showing, may issue an injunction; or when required to protect said premises against waste, appoint and place in charge thereof a receiver, who shall hold said premises until such time as the purchaser is entitled to a deed, and shall be entitled to rent, control and manage the same; but the income during said time, except what is necessary to keep up repairs and prevent waste, shall go to the owner or defendant in execution, or the owner of its legal title.

'Sec. 25. The provisions of this act shall apply to all sales under foreclosure of mortgage, trust deed, mechanics' lien, or other lien, whether special or general, and he terms of redemption shall be the same.

'Sec. 26. The sheriff shall at once make a return of all sales made under this act to the court; and this court, if it finds the proceedings regular and in conformity with law and equity, shall confirm the same and direct that the clerk make an entry upon the journal that the court finds that the sale has in all respects been made in conformity to law, and order that the sheriff make to the purchaser the certificate of sale or deed provided for in section 1 of this act.'

D. M. Valentine and Thos. F. Doran, for plaintiff in error.

E. A. McMath and W. J. Scott, for defendant in error.

Mr. Justice SHIRAS, after stating the facts in the foregoing language, delivered the opinion of the court.

No provision of the constitution of the United States has received more frequent consideration by this court than that which provides that no state shall pass any law impairing the obligation of contracts. This very frequency would appear to have rendered it difficult to apply the result of the court's deliberations to new cases differing somewhat in their facts from those previously considered.

This record discloses that in the present case the supreme court of Kansas filed two opinions, in which, after elaborate reviews of the decisions of this court, opposite conclusions were reached. The case was twice argued and decided. On the first hearing, a majority of that court held, expressing its views in an opinion by Chief Justice Horton, that chapter 109 of the Laws of Kansas of 1893 did not apply to contracts made before its passage, and that, if it did so apply, the law was void as respects prior contracts, because it impaired their obligations.

A change in the membership of the court having taken place, a rehearing was had; and it was held by a majority of the court, speaking through Chief Justice Martin, that the act in question was applicable and valid in the case of contracts made before and after its passage. Beverly v. Barnitz, 55 Kan. 451, 40 Pac. 325; Id., 55 Kan. 466, 42 Pac. 725.

It is the last decision which is brought before us for review. In so far as it construes the act to be applicable to prior contracts, we are, of course, bound by that decision. Whether, when so construed, the act is valid, is a question open for our consideration.

The decisions of this court are numerous in which it has been held that the laws which prescribe the mode of enforcing a contract, which are in existence when it is made, are so far a part of the contract that no changes in these laws which seriously interfere with that enforcement are valid, because they impair its obligation within the meaning of the constitution of the United States. But it will be sufficient for our present purpose to mention a few only.

Bronson v. Kinzie, 1 How. 311, holds that a state law, passed subsequently to the execution of a mortgage, which declares that the equitable estate of the mortgagor shall not be extinguished for 12 months after a sale under a decree in chancery, and which prevents any sale unless two-thirds of the amount at which the property has been valued by appraisers shall be bid therefor, is within the clause of the constitution of the United States which prohibits a state from passing a law impairing the obligation of contracts. In this case the court dealt with the contention, usually made on these occasions, and which is relied on by the defendant in error in the present case, that the law was a regulation of the remedy, and did not directly affect the contract; and Chief Justice Taney said:

'Whatever belongs merely to the remedy may be altered according to the will of the state, provided the alteration does not impair the obligation of the contract. But, if that effect is produced, it is immaterial whether it is done by acting on the remedy or directly on the contract itself. In either case it is prohibited by the constitution.'

And he quoted the language of the court in Green v. Biddle, 8 Wheat. 5:

'It is no answer that the acts of Kentucky now in question are regulations of the remedy, and not of the right to the lands. If these acts so change the nature and extent of existing remedies as materially to impair the rights and interests of the owners, they are just as much a violation of the compact as if they directly overturned his rights and interests. * * * If the remedy afforded be qualified and restrained by conditions of any kind, the right of the owner may, indeed, subsist, and be acknowledged, but it is impaired and rendered insecure...