Beverly v. Barnitz

• Decision Date: 30 April 1895
• Citation: 40 P. 325,55 Kan. 451
• Parties: JOHN L. BEVERLY v. MARTHA BARNITZ. [*]
• Court: Kansas Supreme Court

40 P. 325

55 Kan. 451

JOHN L. BEVERLY v. MARTHA BARNITZ. ^[*]

Supreme Court of Kansas

April 30, 1895

Error from Shawnee District Court.

ACTION by Martha Barnitz against John L. Beverly to foreclose a mortgage. From a judgment and an order directing the sheriff to execute a deed to plaintiff, defendant brings error. The facts are stated in the opinion herein, filed April 30, 1895.

Judgment affirmed.

E. A McMath, for plaintiff in error:

The only question involved in this case is whether chapter 109 of the Laws of 1893, relating to the sale and redemption of real estate, etc., which took effect March 17, 1893, is constitutional as applied to previous mortgages.

In discussing this important question we may assume that the principal and primary test of the constitutionality of this law is whether the law changes or impairs the mortgage contract; for it may be at once conceded that any change or impairment of the contract rights secured under the mortgage however slight, would be unconstitutional. But if the new law acts on the remedy only, then the second and final test of its constitutionality is whether a substantial remedy be left; for the law will not be held unconstitutional simply for the reason that it changes or alters the remedy given by the statute at the time the contract was made.

In Kansas all of the features of the common-law mortgage have been long since wholly swept away or abrogated. Whatever may be the express terms of the mortgage contract, it does not in this state convey any title or estate whatever, either legal or equitable. It gives no right of possession. It gives no power to the mortgagee to sell upon default. It merely gives a lien upon the mortgaged property which can be enforced, not in the manner prescribed in the contract itself, but only in accordance with the rules and practice of the court as the same may be prescribed or limited by statute. Waterson v Devoe, 18 Kan. 233; Seckler v. Delfs, 25 id. 165.

It may be conceded without argument that if the mortgage contract in this case could be construed by the laws or the rules of the court in force at the date of the contract, according to its express terms, or as conveying a title, or the right of possession, or the right to sell as therein expressed, the redemption law of 1893 would operate to deprive the mortgagee of rights expressly given him by contract, and would therefore be unconstitutional; but as the only right obtained by the mortgagee under her contract was a right to a lien to be enforced according to the remedy furnished by statute, it is clear that the subsequent law affects only the remedy, and not the terms or conditions of the mortgage itself.

If the parties to this mortgage could not include in it a valid contract for vesting title, or right of possession, or regulating the time or manner of sale, still less could they make a valid contract which would limit the right of redemption. The right of redemption is inherent in every mortgage, notwithstanding any stipulation to the contrary. The parties to a mortgage cannot, even by express contract limit or restrain this right, either by fixing a limit to the period or by any other condition whatever. Courts of equity have always strenuously resisted all attempts to abridge this right by contract, and have almost uniformly set aside and disregarded every restriction or limitation or condition attempted to be placed upon this right by contract. This rule has been stated by numerous courts and eminent authorities in various forms, but all recognizing the same general principle. Vernon v. Bethell, 2 Eden, 113; Spurgeon v. Collier, 1 id. 55; Hilliard, Mortg. 59; Poindexter v. McCannon, 1 Dev. Eq. 375.

From the foregoing premises we are led to the necessary conclusion, a conclusion that cannot be evaded, that under the construction of the mortgage contract which obtained in Kansas at the time when this mortgage was made, and still obtains, and in view of the invalidity of any contract which the parties may have attempted or may be presumed to have made as to the extent of the estate thereby granted, or the right of possession, or the manner of sale, or in any way limiting the right of redemption, the mortgagee obtained no contract rights which are affected or impaired by the new law; and if this law is held to be unconstitutional, it must be solely upon the ground that it changed and altered the particular remedy which was provided for the enforcement of the mortgage at the time it was made.

The principal case relied upon by those who claim the Kansas law to be unconstitutional, is the case of Bronson v. Kinzie, 1 How. 311, decided by the United States supreme court in 1843. Unless this case is decisive of the question, it will be conceded that the supreme court of the United States has not decided the precise question which arises under the Kansas redemption law. In that case the court was called to pass upon a redemption law passed by the Illinois legislature in 1841, giving the mortgagor 12 months from the date of sale in which to redeem, and giving him meantime the possession of the mortgaged premises. The mortgage in question was an Illinois mortgage, made before the law passed, and the sale was made after its enactment. It was claimed that the law was unconstitutional as applied to that mortgage. While the court sustained this claim, and held the law unconstitutional, the reason given for the decision and the whole argument of the court result in a conclusion precisely the contrary as applied to a Kansas mortgage. A careful reading of the opinion of the court shows that the decision was based upon the special attributes of the common-law mortgage. It held that the redemption law acted not merely on the remedy, but on the contract itself, because it took away from the mortgagee an estate and a right of possession which the contract expressly gave him, and conferred upon the mortgagor an estate which he was not entitled to; because it modified the contract itself, and not merely the remedy. This court has called attention to the important distinction between Kansas mortgages and Illinois mortgages, in the case of Waterson v. Devoe, 18 Kan. 233.

The case of Bronson v. Kinzie, supra, is decisive of the question where the common-law theory of mortgages prevails; but, under the doctrine there laid down and the reasons given for the decision in that case, it must be held that the Kansas redemption law does properly apply to existing mortgages which have been made and are to be construed according to the laws of Kansas, for the reason that the law does not affect the contract itself, as in Illinois, but acts only on the remedy. See, also, Howard v. Bugbee, 24 How. 461; Jones, Mortg., § 18; 32 Ala. 9.

Before examining the decisions of the state courts, it is well to distinguish between a sale made under a mortgage containing a "power of sale," as authorized in some states, and a sale made under a judicial decree. Where a sale is made under a "power of sale" contained in the mortgage, it is a distinct exercise of authority under the terms of the contract, and title is conveyed according to the form of the contract. In such cases a new law providing for redemption and possession by the mortgagee necessarily changes the contract itself, and could not properly apply. While some of the state courts have recognized this exception, an examination of the authorities shows that every state court that has been called upon to determine question (in states where the common - law theory of mortgages has been modified, as in Kansas,) has finally sustained the constitutionality of such a redemption law as applied to existing mortgages when foreclosed by action. It is interesting to note that while in several states early decisions may be found deciding adversely, yet in every such case such adverse decisions have been either squarely reversedor practically overruled by later decisions of the same courts.

See Moore v. Martin, 38 Cal. 439; Thorne v. San Francisco, 4 id. 154; Heyward v. judd, 4 Minn. 487; Scobey v. Gibson, 17, Ind. 572; Davis v. Rupe, 114 id. 588; Robertson v. Van Cleave, 129 id. 229; Insurance Co. v. Brouse, 83 id. 62; Maloney v. Fortune, 14 Iowa, 418; White v. Rittenmyer, 30 id. 62; Maloney v. Fortune, 14 Iowa, 418; White v. Rittenmyer, 30 id 273; Holland v. Dickerson, 41 id. 367; Babcock v. Gurney, 42 id. 156; Fonda v. Clark, 43 id. 300; Olmstead v. Kellogg, 47 id. 460; Loan Association v. Hardy, 26 S.W. 497; iverson v. Shorter, 9 Ala. 113; Life Insurance Co. v. Neeves, 46 Wis. 147; Van Baumbach v. Bade, 9 id. 559; Farnsworth v. Vance, 2 Coldw. 108; People v. Livingston, 6 Wend. 526; McCoun v. Railway Co., 50 N.Y. 176; Louisiana v. New Orleans, 109 U.S. 285; Cook v. Grey, 2 Houst. 455; James v. Stull, 9 Barb. (N.Y.) 482; Butler v. Palmer, 1 Hill, 324; Chadwick v. Moore, 8 Watts & S. 49; Antoni v. Greenhow, 107 U.S. 769; Morley v. Railway Co., 13 S. C. Rep. 55; Berthold v. Fox, 13 Minn. 501.

But it is claimed that the laws which are in force at the time and place of making a contract enter into, and form a part of it, and eminent authorities are cited to sustain this position, notably the case of Van Hoffman v. City of Quincy, 4 Wall. 550, in which Mr. Justice Swayne said:

"It is also settled that the laws which subsist at the time and place of making the contract, and where it is to be performed, enter into and form a part of it as if they were expressly referred to or incorporated in its terms."

The later cases, however, distinguish between such laws as affect the construction and operation of the contract, and those which affect merely the remedy, and hold that the laws in reference to which the parties must be assumed to have contracted were those which in their direct or...