Craig v. Herzman
| Decision Date | 01 December 1899 |
| Docket Number | 6731 |
| Citation | 81 N.W. 288,9 N.D. 140 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Cass County; Pollock, J.
Action by Archibald J. Craig and others against Rosa Herzman and others. Judgment for plaintiffs. Defendants appeal.
Affirmed.
Mills Resser & Mills, for appellants.
Appellants' mortgage was given and recorded prior to the passage of § 4795, Rev. Codes, allowing a sale of the entire property and an apportionment of the proceeds. A sale of the entire property where the mechanic's lien attaches to the building only, appellants' mortgage on the land being a first lien, would violate the constitutional restriction upon laws impairing the obligation of contracts. Secs. 10 and 16 article I, Const. U. S.; Bronson v. Kinzie, 1 How 311; Taylor v. Stearns, 18 Grat. 288. Wherever a subsequent law affects to diminish the duty or impair the right it necessarily bears on the obligation of the contract in favor of one party to the injury of the other, and is obnoxious to the prohibition of the constitution. Grantley's Lessees v. Ewing, 3 How. 707; Planters' Bank v. Sharp, 6 How. 301; Curren v. State, 15 How. 319; Howard v. Bugbee, 24 How. 461; Hawthorn v. Cliff, 2 Wall. 10. One of the tests that a contract has been impaired is that its value has by legislation been diminished. Edwards v. Kearzey, 96 U.S. 595-601; Rutland v. Copes, 15 Richardson (S C.) 105; Boice v. Boice, 27 Minn. 371; O'Brien v. Kreuz, 36 Minn. 136. It is no answer that the legislation in question is a regulation of the remedy and not of the right to the land. Where an act so changes the nature and extent of existing remedies as to impair the rights and interests of the owner it is just as much a violation of the contract as if it directly overturned his rights. Greene v. Biddle, 8 Wheat. 1; Robards v. Brown, 40 Ark. 423; Collins v. Collins, 79 Ky. 88; Phinney v. Phinney, 81 Me. 450. Statutes must be so construed as to give prospective and not a retroactive effect, particularly so where a retrospective construction will interfere with a vested right. Sutherland on St. Cr. § 206; 23 Am. & Eng. Enc. L. 448; Cutting v. Taylor, 51 N.W. 949; Am. Ins. Co. v. County, 59 N.W. 212; Conrad v. Smith, 6 N.D. 337; U. S. v. Heath, 3 Cranch. 399; Harvey v. Taylor, 2 Wall. 328; Smith v. Auditor, 20 Mich. 398. This is true of mechanics' liens. Boisot on Mechanics' Liens, § 41; McCarthy v. Havis, 3 South. Rep. 819; Cooley, Const. Lim. 370; Phillips on Mech. Liens, 22; Vanderpool v. Ry. Co., 44 Wis. 652; Plum v. Sawyer, 21 Conn. 351. The liens in question were filed under chapter 31, Comp. Laws 1887, all parts of which applicable to this case were repealed by the Revised Codes of 1895, and without any saving clause. The repeal of the statute destroyed the rights of the lien claimants. 23 Am. & Eng. Enc. L. 502; Lamb v. Schattler, 54 Cal. 319; County v. Kincaid, 71 Ill. 587; Chapin v. Crusen, 31 Wis. 209; State v. Campbell, 44 Wis. 209; State v. Van Stralen, 45 Wis. 437; Purmort v. Tucker, 2 Col. 470. The lien of a mechanic does not arise out of his contract but depends upon the statute alone for its existence. Bailey v. Mason, 4 Minn. 430; Boisot, § 33. It is within the power of the legislature therefore to do away with the lien entirely. Watson v. Ry. Co., 47 N.Y. 157-162; Frost v. Ilsley, 54 Me. 345.
Newton & Smith, and Benton, Lovell & Bradley, for respondents.
After the liens in question had been earned and asserted (filed) they became vested rights and it was beyond the power of the legislature to destroy them. There may be ownership of rights granted by statute. § 3267, Rev. Codes; § 2676 Comp. Laws. A thing of which there can be ownership is called property. § 3266, Rev. Codes. Mechanics' liens are assignable. Phil. Mec. Liens, § 55 and 29; Sec. 4797, Rev. Codes; Const. § 13; Cooley's Const. Lim. 429; Wade, Retroactive Laws, 156. Mechanics' liens by § 5469 were given to secure payment. The law in force at the time and place of making a contract enters into and forms a part of it, this embraces alike those which affect its validity, construction, discharge and enforcement. Walker v. Whitehead, 16 Wall. 314. there is a vested right in property which one owns and it cannot be taken away. Suth. St. Cr. § 480, p. 627; Lane v. Nelson, 79 Pa. 407; Greenough v. Greenough, II Pa. 489; Weaver v. Sells, 10 Kan. 609; Smith v. Ry. Co. 62 Miss. 510. The liens cannot be destroyed by repeal of the law under which they were filed. Suth. St. Cr. 628; Waters v. Dixie, etc. Co. 32 S.E. 636. Notwithstanding the special repeal, by the Revised Codes, of the mechanics' lien laws theretofore existing, the liens filed under the Compiled Laws were not thereby destroyed. Where a statute is repealed and the repealing statute goes into effect the moment the former is repealed, and contains provisions identical with those in the repealed statute, such provisions are regarded as continuing in force without interruption. Gull River Lumber Co. v. Lee, 7 N.D. 135, 73 N.W. 430; Steamship Co. v. Joliffe, 2 Wall. 450; Wright v. Oakley, 5 Metc. 406; Skyme v. Mill Co. 7 Nev. 219; Sheftels v. Tobert, 46 Wis. 439; Fullerton v. Spring, 3 Wis. 667; Hurley v. Town, 2 Wis. 634; Lande v. Ry. Co. 33 Wis. 640; Glintz v. State, 38 Wis. 549. This court in 1898 enforced a mechanic's lien filed under the Compiled Laws. Turner v. St. John, 8 N.D. 245, 78 N.W. 340. The legislature has plenary power as regards the remedy. Pomeroy's Notes Sedg. St. Contr. 617. The Revised Codes relate only to the remedy. Where a statute deals with procedure only, prima facie, it applies to all actions, those which have accrued or are pending and future actions. Chaffee v. Aaron, 62 Miss. 29; Ry. Co. v. Company, 35 Ohio St. 1; Sampeynese v. U. S. 7 Pet. 222; § 5148 Rev. Codes. It forms no objection to a law that the cause of action existed antecedent to its passage so far as it applies to the remedy and does not effect the right. Dobbins v. Bank, 112 Ill. 553; Peo. v. Tebbets, 4 Conn. 384; Peo. v. Supervisors, 63 Barb. 83; Hanschall v. Schmidz, 50 Mo. 458; Blair v. Casey, 4 wis. 543; Jacquis v. Clark, 9 Cush. 279; Com. v. Bradley, 16 Gray, 241; McNamara v. Ry Co. 12 Minn. 388; Wimberly v. Maybury, 14 L. R. A. 305; Bill v. Myreck, 3 Dak. 294; Thomas v. Smith, 42 Pa. 68; Hine v. Pomeroy, 39 Vt. 211; Hepburn v. Curtis, 32 Am. Dec. 760; McLimans v. Lancaster, 73 Wis. 596, 23 N.W. 689. The rights of parties are not divested by changing the form of the property from real estate to money. Norris v. Clymer, 2 Pa. 277; Sargeant v. Culen, 2 Pa. 393; Wade, Ret. Laws, 241; Wimberley v. Maybury, 14 L. R. A. 305.
This is a contest between certain mechanic's lien holders and a purchaser under a mortgage foreclosure sale. The property consists of a certain lot in the City of Fargo, upon which a two-story brick building, with party walls on either side, has been erected. The mortgage was given long before the building or any part thereof was placed upon the lot. The mechanic's liens attached before the foreclosure of the mortgage. This action was brought by the lienholders. The Red River National Bank was the only defendant that appeared and answered. It claimed title under the foreclosure proceedings, free and clear from all the mechanics' liens. The trial court established the liens upon the building, and found the value of the lot without the building and the value of the building separately, and each at the same sum, and directed that the premises be sold, and that one-half of the proceeds of sale be paid over to the defendant bank; that the mechanics' liens, as established, and in their order, be paid from the other half; and that the surplus, if any, be paid over to the bank. From this decree the bank appeals.
The first position of appellant, as we understand it, is briefly this: When the mortgage under which it derives title was given, and when it was foreclosed, and when appellant received its deed thereunder, the statute in force relative to mechanics' liens declared that, where a building was erected upon land upon which there was an existing mortgage the mortgage should remain a first lien upon the land, but that the liens for labor and materials used in the construction of the building should be a first lien upon the building, and that the building might be sold under said liens, and removed from the land. Comp. Laws, § 5480. It concedes that it possesses only such rights as came to it through the mortgage, and that it took such rights subject to the mechanics' liens, so far as they existed and could be enforced under the law existing when the mortgage was given, and when appellant acquired its title, but to no other or greater extent. It claims that the provision under which the court ordered a sale of the entire property was passed after it acquired its rights, and, in effect, impaired the obligations of the mortgage contract, and hence, as to appellant, such provision is unconstitutional and void. The provision is found in section 4795, Rev. Codes, which went into effect January 1, 1896, and is as follows: "But if in the opinion of the court it would be for the best interests of all the parties that the land and the improvements thereon should be sold together, it shall so order and the court shall take an account and ascertain the separate values of the land and of the erection, buildings or other improvements, and distribute the proceeds of sale so as to secure to the prior mortgage or other lien, priority upon the land, and to the mechanic's lien priority upon the building, erection or other improvement." It will be noticed that under the prior law the priority of the mechanic's lien was enforced by a sale and removal of the building. It so...
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