Farnsworth Loan & Realty Company v. Commonwealth Title Insurance & Trust Company
| Decision Date | 28 June 1901 |
| Docket Number | 12,596 - (167) |
| Parties | FARNSWORTH LOAN & REALTY COMPANY v. COMMONWEALTH TITLE INSURANCE & TRUST COMPANY |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county by plaintiff, as grantee of the mortgagor, to recover the amount of costs and disbursements collected by defendant, as mortgagee, on foreclosure by advertisement of a real-estate mortgage, upon the ground that the affidavit of costs and disbursements had not been filed within the time limited by statute. From a judgment entered in favor of defendant upon the pleadings pursuant to an order of Elliott, J., plaintiff appealed. Affirmed.
Curative Act -- Constitution.
A person has no vested right in a cause of action or defense based solely upon an informality or irregularity in judicial proceedings, not affecting his substantial equities; and a retroactive statute curing defects in such proceedings which are mere irregularities and mistakes, and do not extend to matters of jurisdiction, is not void on constitutional grounds.
Foreclosure of Mortgage -- Filing Affidavit of Costs.
The failure to file, in mortgage foreclosure proceedings, an affidavit of costs and disbursements, as required by G.S 1894, § 6051, is an irregularity not affecting the validity of the foreclosure; and a failure and neglect in that respect occurring prior thereto, no rights of third persons intervening, was cured by Laws 1895, c. 308.
Smith & Smith, for appellant.
Without a strict compliance with the statutory conditions upon which the mortgagee can retain any sum for costs, he has no right or title to any excess above his actual debt, and he is bound to pay the same to the mortgagor. Perkins v. Stewart, 75 Minn. 21. Money arising from a foreclosure sale in excess of the debt of the mortgagor is the money of the mortgagor; he may maintain an action for it, and such right of action is a right of property as fully as if he held a promissory note against the mortgagee for the surplus. Truesdale v. Sidle, 65 Minn. 315; Wyatt v. Quinby, 65 Minn. 537; Eliason v. Sidle, 61 Minn. 285; Fagan v. Peoples Sav. & L. Assn., 55 Minn. 437; Johnson v. Stewart, 75 Minn. 20; Perkins v. Stewart, supra.
A cause of action once existing is a right of property and cannot be taken away by the legislature upon any pretense of relieving the existing legal obligations of debtors. Chicago v. Dunn, 52 Ill. 260. The legislature has no power to extend or alter a statute of limitations as to past transactions for the purpose of taking away rights of action or defenses, because such rights are vested rights of property. Board v. Blodgett, 155 Ill. 441. The legislature cannot by curative acts change the then existing contracts, rights or obligations, or rights existing under the law. Lowry v. Mayo, 41 Minn. 388; Heyward v. Judd, 4 Minn. 375 (483); O'Brien v. Krenz, 36 Minn. 136; Willis v. Jelineck, 27 Minn. 18; Carroll v. Rossiter, 10 Minn. 141 (174); Black, Const. Prohib., § 101. Curative acts cannot prevail when they interfere with vested rights or legal obligations. Deininger v. McConnel, 41 Ill. 227; Orton v. Noonan, 23 Wis. 102; Leland v. Wilkinson, 10 Pet. 294; Lessee of Good v. Zerchee, 12 Ohio 364; Meighen v. Strong, 6 Minn. 111 (177); Thompson v. Morgan, 6 Minn. 199 (292). All attempts, by curative acts, to impair or destroy the rights and obligations of parties under contracts, either express or implied, are void. Goenen v. Schroeder, 8 Minn. 344 (387); Carroll v. Rossiter, supra; Hillebert v. Porter, 28 Minn. 496.
C. W. G. Withee and Davis, Kellogg & Severance, for respondent.
"If the thing wanting or which failed to be done, and which constitutes the defect in the proceedings, is something the necessity for which the legislature might have dispensed with by prior statute, then it is not beyond the power of the legislature to dispense with it by subsequent statute." Cooley, Const. Lim. (6th Ed.) 457. Undoubtedly the legislature might have dispensed with the requirement for the filing of any affidavits of costs and disbursements in a foreclosure proceeding, and if so, it can dispense with it or extend the time for filing, by subsequent statute. Green v. Abraham, 43 Ark. 420, 423; Blount v. City, 31 Wis. 648. There are no equities in the plaintiff's claim. There never was any equity in it, either while the mortgagor owned the property or since the assignment to the plaintiff, and under such circumstances it has been repeatedly held that a party can have no vested right in a cause of action based upon an informality which does not affect his substantial equity. State v. Norwood, 12 Md. 195; State v. Mayor, 27 N.J.L. 185, 197; Gibson v. Hibbard, 13 Mich. 214; Harris v. Rutledge, 19 Iowa 388; Foster v. President, 16 Mass. 244; Perry v. Clary, 77 Me. 482; Freiberg v. Singer, 90 Wis. 608; Dillon v. Linder, 36 Wis. 344; Campbell v. Iron-Silver Mining Co., 27 C.C.A. 646. The amount sought to be recovered in this action is in the nature of a penalty for failure to file the affidavits in time. If such is the case, the plaintiff has no vested right in the matter, and no right at all that the legislature could not take away. Mix v. Illinois, 116 Ill. 502, and cases cited.
This action was brought to recover the amount of certain costs and expenses incurred in the foreclosure of a real-estate mortgage, on the ground that the mortgagee failed to file the proper affidavit of costs within the time prescribed by statute. Defendant had judgment in the court below, and plaintiff appeals.
There is but one question in the case, and that is whether Laws 1895, c. 308, is a constitutional and valid statute. The facts are short. Defendant was the owner of a mortgage upon several lots or tracts of land; the indebtedness secured being divided into specific amounts, and secured separately on distinct lots. It was treated as eleven mortgages, foreclosed as such, and the costs and disbursements taxed and charged accordingly. The cause was submitted to the court below on the pleadings and a stipulation of facts, from which it appears that the foreclosure of the mortgage was regular and in all respects in accordance with law, and that the costs and disbursements ($31.16 as to each separate foreclosure) were actually paid and incurred by the mortgagee. It was further stipulated that the plaintiff was the owner of the mortgaged premises at the time of the foreclosure, though not the mortgagor, having prior thereto succeeded to his rights, and that no redemption was ever made from the sales. Each lot was bid in by the mortgagee at the sale for the principal, interest, and costs of foreclosure. It is further expressly stipulated that this action is brought to recover the costs and disbursements as to each of the lots covered by the mortgage, on the ground and for the reason that the affidavits of such costs and disbursements were not filed in the office of the register of deeds within the time required by law.
The action was commenced in October, 1899, -- nearly six years after the completion of the foreclosure. By Laws 1895, c. 308, all affidavits of costs and disbursements in mortgage foreclosure proceedings theretofore had, which were not filed and recorded within the time limited therefor by G.S. 1894, § 6051, but were subsequently filed, were legalized and made as effectual in all respects as though filed and recorded within proper time. The validity of this act is the only question in the case. Counsel for appellant contend that the title thereto is not a sufficient compliance with the requirements of the constitution, and for this reason that the act is invalid. The title is as follows: "An act to legalize filing of affidavits in certain cases, and making the same and the record thereof evidence."
This title is not as full and explicit as it might have been made, but we hold it sufficient, within the decisions of this court. State v. Cassidy, 22 Minn. 312.
The serious objection to this statute goes to its substance. G.S. 1894, § 6051, provides that a party foreclosing a mortgage upon real property shall make and file an affidavit of costs and disbursements within ten days after the foreclosure. The statute was construed, in Larocque v. Chapel, 63 Minn. 517, 65 N.W. 941, to mean and to require the filing of the affidavit within ten days from the completion of the foreclosure by the execution and recording of the sheriff's certificate of sale. So that, as twenty days are given within which to complete the foreclosure by the execution of the sheriff's certificate, the mortgagee or person foreclosing has in fact thirty days from the date of sale in which to file the affidavit of costs. In the case at bar the sale occurred May 22, 1894, and the affidavit of costs and disbursements was in fact filed June 27, 1894, -- six days too late. That plaintiff has a cause of action, unless the failure to file the affidavit, which is the foundation thereof, was cured by the act of 1895, there is no doubt. So the question is whether the irregularity and failure to file the requisite affidavit at the proper time were cured by that act.
The question is an important one because it goes to the power and authority of the legislature to enact "healing" or curative statutes. Mature reflection and consideration of the authorities bearing on the question convince us that the statute is not obnoxious to the constitution, and should be upheld. The only ground upon which it can be held invalid is that it impairs and destroys vested rights. It being essential to the right of the mortgagee to retain the costs of foreclosure that the affidavit be filed, we have heretofore held that the failure to file it works a forfeiture of that right. The amount becomes a surplus in the...
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