Blaisdell v. Home Building & Loan Association

• Decision Date: 07 July 1933
• Docket Number: 29,615
• Citation: 249 N.W. 334,189 Minn. 422
• Parties: JOHN H. BLAISDELL AND ANOTHER v. HOME BUILDING & LOAN ASSOCIATION
• Court: Minnesota Supreme Court

249 N.W. 334

189 Minn. 422

JOHN H. BLAISDELL AND ANOTHER v. HOME BUILDING & LOAN ASSOCIATION

No. 29,615

Supreme Court of Minnesota

July 7, 1933

Judgement Affirmed 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 255

Proceeding in the district court for Hennepin county under L. 1933, c 339, to obtain an extension of the period of redemption from a mortgage foreclosure sale of petitioners' homestead. Upon hearing, the court, Arthur W. Selover, Judge, granted respondent's motion to exclude all evidence under the petition on the ground that the 1933 act is unconstitutional. From an order denying their motion for a new trial petitioners appealed. Reversed.

SYLLABUS

Mortgage -- redemption -- extension of time -- validity of statute.

Constitution -- impairment of obligation of mortgage contract.

1. It is conceded that L. 1933, c. 339, under which the time for redemption from mortgage foreclosure sales may be extended, impairs the obligation of the mortgage contract.

Constitution -- impairment of obligation of mortgage contract.

2. The existence of the economic emergency justified the legislature in the exercise of the police power of the state to enact the law to relieve from the emergency.

Constitution -- judicial and legislative powers.

3. Whether the emergency existed and was of such nature that resort might be had to the police power of the state was primarily for the legislature; but, though the courts have authority to determine whether such emergency in fact exists, common knowledge of conditions and the action of the president and the congress indicate a reasonable basis for legislative action.

Constitution -- impairment of obligation of mortgage contract.

4. The law goes no farther than reasonably necessary in granting relief under the existing conditions.

Statute -- subject and title of act.

5. The title does not embrace more than one subject -- the extension of the time of redemption. The other matters are incidental.

Statute -- general law.

6. The law is general and not objectionable as special or class legislation.

George C. Stiles, for appellants.

Strong, Myers & Covell and Karl H. Covell, for respondent.

Harry H. Peterson, Attorney General, William S. Ervin and Matthias N. Orfield, Assistant Attorneys General; Leonard Eriksson, and Bryce E. Lehmann, amici curiae, filed separate briefs in support of the contention that L. 1933, c. 339, is constitutional, and there was an oral argument by William S. Ervin, Assistant Attorney General.

OPINION

HOLT, Justice.

Appellants presented a petition to the district court for an order extending the period of redemption under the provisions of L. 1933, p. 514, c. 339. The substance of the petition was that appellants owned a certain lot in Minneapolis, which was their homestead and of the reasonable value of $15,000; that appellants on May 1, 1931, executed and delivered their mortgage to respondent on said lot to secure the payment of a certain sum of money, which mortgage contained a valid power of sale by advertisement; that thereafter, by reason of circumstances beyond the control of appellants, default in the condition of the mortgage was made, and it was foreclosed by advertisement and sold to respondent on May 2, 1932, for $3,700.98; that the time of redemption will expire on May 2, 1933, and that respondent is the owner and holder of the sheriff's certificate of sale on the foreclosure; that appellants have made earnest efforts to refinance the loan and redeem but have failed because of the economic depression which has existed throughout the state for the last three years; that unless the period of redemption be extended the property will be irretrievably lost to appellants; that the reasonable net income in normal times is $115 per month and that for the last year it has been only $37 per month; that the reasonable value of the property greatly exceeds the money due on the mortgage; that unless the time to redeem from the said sale be extended appellants will suffer the loss of their whole equitable interest in the property; and appellants prayed that the court grant a hearing to extend the period of redemption until May 1, 1935, that it determine the reasonable rental value of the property and direct and require appellants to pay all or such reasonable part of such rental value toward the payments of taxes, insurance, and interest on the mortgage indebtedness as to the court appears reasonable and just. On the hearing respondent objected to the introduction of any evidence on the ground that L. 1933, p. 514, c. 339, was unconstitutional in that it impaired the obligation of the mortgage contract, that it was special and class legislation, and not warranted under the police power of the state. The objection was sustained, and, appellants' motion for a new trial being denied, they appealed.

Appellants concede, as they must, that L. 1933, p. 514, c. 339, impairs the obligations of the mortgage contract. It is too long for insertion in an opinion. It is declared to be an emergency measure and is not to remain in operation beyond May 1, 1935. Its object is to authorize the district court to extend the time of redemption from mortgage foreclosure sales and execution sales of real estate, and, incidentally thereto, to withhold during that time the power of sale by advertisement and the right to deficiency judgments. That this is impairing the obligation of the mortgage contract and the rights of judgment creditors is settled by the following decisions: Heyward v. Judd, 4 Minn. 375 (483); Goenen v. Schroeder, 8 Minn. 344 (387); Carroll v. Rossiter, 10 Minn. 141 (174); Hillebert v. Porter, 28 Minn. 496, 11 N.W. 84; O'Brien v. Krenz, 36 Minn. 136, 30 N.W. 458; Dunn v. Stevens, 62 Minn. 380, 64 N.W. 924, 65 N.W. 348; Bronson v. Kinzie, 1 How. 311, 11 L.Ed. 143; Edwards v. Kearzey, 96 U.S. 595, 24 L.Ed. 793; Barnitz v. Beverly, 163 U.S. 118, 16 S.Ct. 1042, 41 L.Ed. 93.

The only ground upon which L. 1933, p. 514, c. 339, can be sustained is that it is legislation in virtue of the police power of the state called into exercise because of "a public economic emergency" which the act declares exists in the state. Respondent concedes that under the police power the state may impair the obligations of contract. Courts have so held. State ex rel. Twin City B. & I. Co. v. Houghton, 144 Minn. 1, 174 N.W. 885, 176 N.W. 159, 8 A.L.R. 585; State ex rel. Beery v. Houghton, 164 Minn. 146, 204 N.W. 569, 54 A.L.R. 1012; Sligh v. Kirkwood, 237 U.S. 52, 35 S.Ct. 501, 502, 59 L.Ed. 835; Price v. Illinois, 238 U.S. 446, 35 S.Ct. 892, 59 L.Ed. 1400; Perley v. North Carolina, 249 U.S. 510, 39 S.Ct. 357, 63 L.Ed. 735; Miller v. Schoene, 276 U.S. 272, 48 S.Ct. 246, 72 L.Ed. 568. In Sligh v. Kirkwood, 237 U.S. 52, 59, 35 S.Ct. 501, 59 L.Ed. 835, we find the following:

"The police power, in its broadest sense, includes all legislation and almost every function of civil government. Barbier v. Connolly, 113 U.S. 27, 5 S.Ct. 357, 28 L.Ed. 923. It is not subject to definite limitations, but is co-extensive with the necessities of the case and the safeguards of public interest. Camfield v. U.S. 167 U.S. 518, 524, 17 S.Ct. 864, 42 L.Ed. 260, 262. It embraces regulations designed to promote public convenience or the general prosperity or welfare, as well as those specifically intended to promote the public safety or the public health."

To what extent emergency legislation under the police power of the state may impair contract obligations or impinge on any constitutional provision has received exhaustive consideration in cases arising out of the so-called housing legislation in New York and in the District of Columbia. On all questions involved and decided therein the similarity or occasion for the emergency legislation and its effect in impairing the obligations of contract and in violating the due process clause are so pointedly applicable here that we feel they should be followed. The opinion of Judge Pound in People ex rel. Durham R. Corp. v. La Fetra, 230 N.Y. 429, 130 N.E. 601, 604, 16 A.L.R. 152, and the concurring opinion of Judge Crane, expressed in Guttag v. Shatzkin, 230 N.Y. 647, 130 N.E. 929, go quite fully into every legal proposition now raised. Edgar A. Levy Leasing Co. Inc. v. Siegel, 230 N.Y. 634, 130 N.E. 923, decided on the opinion in the La Fetra case, was affirmed in 258 U.S. 242, 42 S.Ct. 289, 291, 66 L.Ed. 595. We quote from Judge Pound's opinion the principles controlling in a case of this sort :

"Whether or not a public emergency existed was a question of fact, debated and debatable, which addressed itself primarily to the legislature. That it existed; promised not to be presently self-curative, and called for action, appeared from public documents and from common knowledge and observation. If the law-making power on such evidence has determined the existence of the emergency and has, in the main, dealt with it in a manner permitted by the constitutional limitations upon legislative power, so far as the same affect the class of landlords now challenging the statutes, the legislation should be upheld. * * * The proposition is equally fundamental that the state may establish regulations reasonably necessary to secure the general welfare of the community by the exercise of its police power although the rights of private property are thereby curtailed and freedom of contract is abridged [citing authorities]. * * * Emergency laws in time of peace are uncommon but not unknown. Wholesale disaster, financial panic, the aftermath of war ( Hamilton v. Kentucky Distilleries & W. Co. 251 U.S. 146, 161, 40 S.Ct. 106, 64 L.Ed. 194), earthquake, pestilence, famine and fire, a combination of men or the force of circumstances may, as the alternative of confusion or chaos,...