Langever v. Miller

• Decision Date: 22 November 1934
• Docket Number: Application No. 20699.
• Citation: 76 S.W.2d 1025
• Parties: LANGEVER v. MILLER.
• Court: Texas Supreme Court

76 S.W.2d 1025

LANGEVER v. MILLER.

Application No. 20699.

Supreme Court of Texas.

November 22, 1934.

Application for Writ of Error from Court of Civil Appeals of Second Supreme Judicial District.

Suit by J. J. Langever against H. H. Miller. Judgment dismissing the cause was affirmed by the Court of Civil Appeals [73 S. W.(2d) 634], and plaintiff applies for writ of error.

Application refused.

William R. Watkins, of Fort Worth, for plaintiff in error.

E. L. Gilbert and C. H. Milliken, both of Fort Worth, for defendant in error.

CURETON, Chief Justice.

This case is before us on application for writ of error. We have concluded that the application should be refused, and will state our reasons therefor.

The only question involved is the constitutionality of the Anti-Deficiency Judgment Law, approved April 21, 1933, now chapter 92, General Laws, Regular Session of the 43d Legislature (Vernon's Ann. Civ. St. arts. 2218, 2218a).

H. H. Miller, the defendant in error, obtained a judgment against the plaintiff in error on October 4, 1932 (long before the enactment of the statute here involved), for $1,338.29, with interest and $82.65 costs, and foreclosure of a second mortgage lien on real property in Fort Worth. Order of sale issued on the foreclosure judgment, the property was sold as provided by law, and was purchased at the sale by Miller, the defendant in error, for $25, leaving a then existing deficiency judgment for approximately $1,450. The plaintiff in error, Langever, the judgment debtor, then instituted this suit under the act above named, for the purpose of ascertaining the actual value of the property sold under the foreclosure proceedings, exclusive of amounts secured by superior and tax liens, and having the amount thereof, less the $25 for which it sold, credited on the deficiency judgment. Allegations were made in the petition that at the time and place of sale the property was actually worth more, exclusive of the amounts secured by judgment and tax liens, than the amount of the deficiency judgment. In fact, it was stated in Langever's petition that the aggregate of the amounts due under superior and tax liens was $4,775, while the property at the time and place of sale was worth $6,500, or some $1,700 in excess of what it sold for under the order of sale. Against this petition the defendant in error urged demurrers based on the invalidity of the legislative act, and by virtue of which plaintiff in error claimed the relief he prayed for. The demurrers were sustained, and the cause dismissed by the district court. Langever appealed, and the Court of Civil Appeals, having concluded that the legislative act involved was unconstitutional and void, affirmed the judgment of the district court. 73 S.W.(2d) 634.

The laws, at least as to substantial rights and remedies, existing at the time a contract is made, become a part of the contract. 9 Texas Jur. p. 544, § 110; Jones on Mortgages (8th Ed.) vol. 3, § 1694; 19 Ruling Case Law, p. 302, § 77; McLane v. Paschal, 62 Tex. 102; Thompson v. Cobb, 95 Tex. 140, 65 S. W. 1090, 93 Am. St. Rep. 820; International B. & L. Ass'n v. Hardy, 86 Tex. 610, 26 S. W. 497, 24 L. R. A. 284, 40 Am. St. Rep. 870; Dallas County L. I. Dist. v. Rugel (Tex. Com. App.) 36 S.W.(2d) 188; Life Ins. Co. v. Sanders (Tex. Civ. App.) 62 S.W.(2d) 348, 353; Vanderbilt v. Brunton Piano Co., 111 N. J. Law, 596, 169 A. 177, 89 A. L. R. 1080; O'Brien v. Kreuz, 36 Minn. 136, 30 N. W. 458, 460; Adams v. Spillyards, 187 Ark. 641, 61 S.W.(2d) 686, 86 A. L. R. 1493; Walker v. Whitehead, 16 Wall. 314, 317, 21 L. Ed. 357; Bronson v. Kinzie, 1 How. 311, 11 L. Ed. 143; Edwards v. Kearzey, 96 U. S. 595, 600, 24 L. Ed. 793.

To this we may add, that since the Constitution is also a law—the supreme law— section 16, art. 1, prohibiting the enactment of laws impairing the obligation of contracts also becomes a part of each contract, protecting it to the extent of the meaning of that clause from impairment even by constitutional amendment.

Our statute regulating judgments upon foreclosure of mortgages and other liens has been a part of our statutes since 1846, and was the law when the judgment here involved was rendered. This statute, article 2218, then read: "Judgments for the foreclosure of mortgages and other liens shall be that the plaintiff recover his debt, damages and costs, with a foreclosure of the plaintiff's lien on the property subject thereto, and, except in judgments against executors, administrators and guardians, that an order of sale shall issue to the sheriff or any constable of the county where such property may be, directing him to seize and sell the same as under execution, in satisfaction of the judgment; and, if the property cannot be found, or if the proceeds of such sale be insufficient to satisfy the judgment, then to make the money, or any balance thereof remaining unpaid, out of any other property of the defendant, as in case of ordinary executions."

Under the terms of this statute, when the judgment before us was rendered, Miller, the plaintiff in error, held and owned a valid, subsisting, and unsatisfied deficiency judgment for approximately $1,450. To satisfy this judgment he was then entitled under the statute to seize and sell as under execution any other property of the plaintiff in error subject to execution. 26 Texas Jur. p. 928, § 102, p. 930, § 103; 3 Jones on Mortgages (8th Ed.) § 1739; 42 Corpus Juris, p. 284, § 1963, p. 285, § 1964; Bailey v. Block, 104 Tex. 101, 134 S. W. 323. This was the status of defendant in error's judgment debt and the statutory remedy for its collection when the Legislature passed the law here involved. That measure, chapter 92, General Laws 43d Legislature, Regular Session, after re-enacting article 2218, as copied above, followed it in the same section with the provisions shown below and certain other sections. The act, in so far as here involved, reads:

"Section 1. That Article 2218, Title 41, Chapter 9, Revised Civil Statutes, 1925, be and the same is hereby amended so as to hereafter read as follows:

"`Article 2218. [Here follows Article 2218 just as we have copied it above.]

"`Providing that if the property be real property, and if the proceeds of such sale be insufficient to satisfy the judgment, and providing that if the mortgagee or lien holder has elected to foreclose his mortgage or lien to satisfy his debt, or if the property be real property, and if sold under deed of trust or other contract and the proceeds of such sale be insufficient to satisfy the debt, and the mortgagee or lien holder shall thereafter bring suit against the maker of the debt or any person who has assumed the payment thereof, or who is obligated thereon, or if a deficiency judgment exists after sale under execution or order of sale, the defendant or defendants in such suit may plead as a defense or partial defense to such suit or against such deficiency judgment that said property at such foreclosure was sold for less than its actual value, exclusive of superior liens including tax liens, at the time and place of such sale; and may by proper pleading and evidence show the actual value, exclusive of superior liens including tax liens, of such property at the time and place of such foreclosure sale; and if such actual value, exclusive of superior liens including tax liens, be shown to be more than the amount for which such property was sold at such foreclosure, the defendant or defendants shall be entitled to a credit upon such deficiency indebtedness of the difference between the amount of such foreclosure price and the actual value, exclusive of superior liens including tax liens, of such property at the time and place of such foreclosure sale. The burden of proof shall be upon the defendant to establish by clear and satisfactory evidence the facts necessary to establish his defense or offset or credit, and the court shall so instruct the jury.' "Sec. 2. All actions for the recovery of any judgment on any note or notes secured by a lien on real estate shall be brought within six months after the date of any sale of the real estate security and no court shall have any jurisdiction to maintain any such action brought after such date.

"Sec. 3. No writ of execution, attachment, garnishment, or other writ or order seeking to enforce any money or deficiency judgment had on any note or other obligation secured by any lien on real estate shall ever be issued by any court of this State unless the application for said writ or order shall have been made within six (6) months after any sale shall have been had of any real estate securing the note or other obligation."

Section 4 exempts from the provisions of the statutes liens, etc., given to secure the payment of money secured by fraud, etc.

Section 5 of the act is the emergency clause, which shows that the prime purpose of the measure was to give relief from then existing contracts and judgments. This clause reads: "Sec. 5. The fact that many honest, hard working and worthy city home owners and farm owners are being foreclosed in these hard, stringent and depressed times when their real estate is being bought in at foreclosure sales, in many instances, at unconscionably low prices by mortgage holders and lien holders who are securing deficiency judgments for the unpaid balance of the mortgage or lien held against these property holders, thereby, harassing and embarrassing honest, worthy people by hanging unwarranted judgments over their heads and further depressing their spirits when calamity overtook them through no fault of their own, creates an emergency and an imperative public necessity that the Constitutional Rule requiring bills to be read in each House on three several days be suspended, and said Rule is hereby suspended, and this Act shall take effect and be in force from and after its passage, and it is so enacted."

It is obvious that the legal effect of this act is to cancel all...