Dennis v. Moses

Decision Date15 February 1898
PartiesDENNIS v. MOSES.
CourtWashington Supreme Court

Appeal from superior court, King county; O. Jacobs, Judge.

Action by J. H. Dennis against I. E. Moses to foreclose a mortgage. Judgment for defendant, and plaintiff appeals. Reversed.

Dunbar and Reavis, JJ., dissenting.

John P. Hoyt and Hastings & Stedman, for appellant.

John E Humphries, W. E. Humphrey, and E. P. Edsen for respondent.

SCOTT, C.J.

This action was brought to foreclose a real-estate mortgage given to secure a note for $1,500, bearing interest at the rate of 6 per cent. per annum. The mortgage contained stipulations on the part of the mortgagor waiving all benefits under the provisions of sections 3 to 10, inclusive, of the act relating to sales of property under execution (Laws 1897, p 70), and provided that in case of foreclosure the land might be sold forthwith, as lands are sold on execution, to the highest bidder, without appraisement, and without waiting one year, as provided by statute; also waiving the provisions of the deficiency judgment act (Laws 1897, p. 98), and providing that in case of nonpayment of the note there might be a decree of foreclosure against the mortgaged land, and a personal judgment upon the note, and in case the land was not sufficient to satisfy it, that an execution might issue and be levied on other property of the mortgagor. It was further stipulated in the note and mortgage that the debt should be payable only in gold coin of the United States of the present standard value, and that the decree and judgment thereon should so provide, in contravention of the act relating to payment of obligations (Laws 1897, p. 91); also, that the purchaser at the foreclosure sale, or his successor in interest, should have possession of the mortgaged land during the time allowed for redemption, but should apply the rents and profits upon the debt in case it was redeemed, the mortgagor waiving all right to the possession as provided by the act granting judgment debtors right of possession during the period of redemption (Laws 1897, p. 227). The mortgage also provided, in case of suit, that an attorney's fee of 20 per cent. upon the amount due should be included in the judgment, and in case of a settlement of the suit before judgment an attorney's fee of $300 should be payable, which calls in question the provisions of the act regulating attorney's fees (Laws 1895, p. 81). The mortgage recited that the loan was obtained at a lower rate of interest than would have been fixed were it not for the stipulations and the waivers above stated. The lower court found that they were all agreed to, but held that they were all invalid, and that there must be an appraisement, that the land could not be sold for less than 80 per cent. of the appraised value, that the remedy must be confined to the property mortgaged, that it could not be sold before the expiration of one year provided by statute, that the mortgagor should have possession meanwhile, that the debt could be satisfied in any kind of lawful money, and allowed an attorney's fee of 10 per cent., instead of the one stipulated; whereupon the plaintiff appealed.

That some of the questions raised are of paramount importance is apparent. The general situation heretofore and now prevailing is well known, and it is permissible to consider it for the purpose of arriving at the intention of the legislature in enacting some of the laws in question. Incident to the development of a new state, it had been necessary for people to hire money, and this was done largely upon real-estate security, such debts being in the main unsatisfied when said laws were passed, and the mortgages given to secure the same could not be affected thereby. If these laws are valid, and must receive the construction contended for in some of the briefs, it is apparent that a large number of citizens will be prevented from negotiating loans, and from obtaining a generally prevailing lower rate of interest than that previously existing, with which to satisfy present debts, or, perhaps, to obtain binding stipulated extensions of time upon such debts, or for the purpose of contracting new loans for building houses or constructing improvements. Homes might be lost thereby, and the development of the state seriously retarded. They were helpless, so far as existing mortgages are concerned, for such laws could not affect them injuriously, under both the state and national constitutions. There is no way of compelling new loans or extensions of either foreign or local capital. Realizing the great public interest centered in the decision of these questions, and desiring to be as fully enlightened as might be, the court followed a practice, sometimes adopted, of inviting other competent attorneys to express their views to the court on said matters; they not being interested in the case. These gentlemen have courteously and ably responded, and while in important particulars they have disagreed, and while it will not be necessary to consider the argument presented upon some lines, it has been much to the court's assistance. The most important questions are those arising under the act relating to sales of property under execution, especially the matter of the appraisement, and the deficiency judgment act, as these are the most serious obstacles in the way of obtaining loans and renewals.

Arguments have been presented in several of the briefs to the end that the provisions of the act relating to sales of property under execution, as to the appraisement of land, do not apply in the case of mortgage foreclosures. In the case of Swinburne v. Mills, 17 Wash. 611, 50 P. 489, without entering upon an extended discussion of that point, the court expressed the opinion that, owing to the use of the word "decree," etc., in the title of the act, and the direct reference to mortgages in section 10, mortgages were included in the act, and that there must be an appraisement as to subsequent mortgages. There are other expressions of like import, such as sales "upon execution or by order of the court," in section 2, and "upon the return of any sale of real estate or execution," in section 14. Also, the evident intent of the act as a whole to deal with all sales of real estate at the suit of the private or individual creditor strengthens that conclusion, and we follow it here. In the discussion of the Swinburne Case, the court, after holding that the provisions of the act relating to an appraisement applied to mortgage decrees as well as to ordinary judgments, held that it was an impairment of the obligations of existing contracts, and could not affect prior mortgages, following a long, unbroken line of state and federal decisions, it being a prior mortgage there in controversy. No attempt was made to interpret or construe the act further in that case, as it was not necessary to do so. But the substance of the entire act is largely involved in this case, for a construction of the particular parts questioned renders necessary a consideration of nearly all of it to some extent, in order to harmonize and give effect to the whole. It is a wholesome, well-established rule that an act should be interpreted or construed to give effect to each of its express provisions, if practicable. In case of conflict, those susceptible of but one meaning will control those susceptible of two, if the act can thereby be rendered harmonious. The general purpose or spirit of the act must always be held in view, and absurd or oppressive consequences avoided, as far as possible. State v. Daniel (Wash.) 49 P. 243; People v. Jaehne, 103 N.Y. 182, 8 N.E. 374. Observing these rules we enter upon the further consideration of this act.

First going back to the necessity of an appraisement, we desire to call attention to section 16 of the act, which seems to have been unnoticed from the briefs. This section clearly recognizes that there are cases where no appraisement is required. To what sales does it apply? Section 3 speaks of an estimated value to be furnished by the judgment creditor; section 4 provides that if the debtor is not satisfied therewith, he may except, and give his estimate, etc.; and section 5 provides that the creditor may demand an appraisement, if he is not satisfied with the debtor's estimate. But, evidently, section 16 did not intend to except those cases where no other appraisement than the first estimate, or estimates, was demanded, because, if the debtor should except to the creditor's estimate, and thus bring about the further appraisement provided for at the instance of the creditor, and section 16 means the appraisement provided for in section 5, the debtor will be punished for excepting to the creditor's estimate by cutting off one year of his period of redemption; for, if this is the appraisement that is meant, and none is had, the deed would not issue until one year after confirmation, and, if an appraisement is had, the deed issues immediately after confirmation. There would be no reason for providing two different periods of redemption to fit these cases, and a cogent one against it. If section 630, vol. 2, of the Code, was not repealed, so an immediate sale of mortgaged lands could be had, and it should be held that no appraisement was necessary, the same difficulty and inconsistency would remain as to ordinary judgments not constituting a lien until a levy is had, and if mortgaged lands must be appraised, and an immediate sale can be had, under section 630, the confirmation following right along, the period of redemption would be less than one year. The legislature evidently meant to provide a uniform period of redemption in these cases, whether the land was sold under an ordinary judgment or a mortgage or lien decree...

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