National Tailoring Co. v. Scott, 2392

• Decision Date: 03 August 1948
• Docket Number: 2392
• Citation: 65 Wyo. 64,196 P.2d 387
• Parties: NATIONAL TAILORING COMPANY, a Corporation, and DON C. PARKIN, Sheriff of Big Horn County, Wyoming, Plaintiffs in Error, v. J. E. SCOTT, Defendant in Error
• Court: Wyoming Supreme Court

196 P.2d 387

65 Wyo. 64

NATIONAL TAILORING COMPANY, a Corporation, and DON C. PARKIN, Sheriff of Big Horn County, Wyoming, Plaintiffs in Error, v. J. E. SCOTT, Defendant in Error

No. 2392

Supreme Court of Wyoming

August 3, 1948

ERROR to District Court, Big Horn County; C. D. MURANE, Judge.

Suit by J. E. Scott against National Tailoring Company and Don C Parker, Sheriff of Big Horn County, Wyoming, to restrain defendants, their agents, attorneys, or deputies, from foreclosing mortgage on plaintiff's realty and to have mortgage adjudged void and canceled. To review a judgment for plaintiff the defendants bring error.

Reversed with instructions.

For the plaintiffs in error the cause was submitted on the brief of Zaring and Zaring of Basin, Wyoming.

POINTS OF COUNSEL FOR PLAINTIFFS IN ERROR

The majority rule is to the effect that a statute of limitations governing actions or suits to foreclose mortgages has no application to proceedings of foreclosure under a power of sale in a mortgage or trust deed. It is generally held that a statute of limitations governing actions or suits to foreclose mortgages has no application to proceedings of foreclosure under a power of sale in a mortgage or trust deed. State ex rel Avenius v. Tidball, 35 Wyo. 496; 41 C. J. 944.

It is generally held that statutes of limitation governing actions or suits have no application to foreclosure of mortgages by the exercise of a power of sale therein contained. Delfelder Land Co. v. Teton Land & Investment Co., 46 Wyo. 169.

The general rule is that statutes of limitation governing actions or suits to foreclose mortgages have no application to proceedings of this kind, taken ex parte and out of court and the fact that an action of foreclosure or to recover the debt secured is barred by limitations does not in general affect the right of selling under the power for the purpose of applying the proceeds of the sale to a debt, unless there is a statute which makes such limitations applicable. 41 C J. 944.

A statute is prospective only which expressly declares that it is not retrospective. So where, by its terms, a statute is to apply 'hereafter' or 'thereafter', or is to take effect at a fixed future date, or immediately, or which contains, in the enacting clause, the phrase 'from and after the passing of this act,' or contains the words 'shall have been made,' or 'from and after' a designated date, or which expressly excepts rights acquired prior to the passage of the act, or 'actions now pending', or 'any suit or proceeding had or commenced' before the passage of the act, it is prospective only in operation. But the words 'heretofore' and 'theretofore' expressly give the statute a retrospective operation.

Retrospective or retroactive legislation is not favored. Hence, it is a well-settled and fundamental rule of statutory construction, variously stated, that all statutes are to be construed as having only a prospective operation, and not as operating retrospectively. It is equally well settled as a fundamental rule of statutory construction supported and established by numerous judicial decisions that statutes are not to be construed as having a retroactive effect. 59 C. J. 1159; 50 A. J. 494-500.

The power to enact statutes of limitation is subject to the fundamental condition that a reasonable time shall be allowed for the exercise of the right of action, whether existing or prospective, after it comes within the prospective or present operation of the statute and before the bar becomes effective. 12 C. J. 978; 17 R. C. L. 676; Adams & Freese Co. v. Kenoyer, (N. D.) 16 L. R. A. (N. S.) 683; Price v. Hopkins, 13 Mich. 318; Lamb v. Powder River Livestock Co., 67 L. R. A. 558; Fisher v. Green, 31 N.E. 172; Hathaway v. Merchants Loan & Trust Co., 75 N.E. 1060.

For the defendants in error the cause was submitted on the brief of Robert H. Brome of Basin, Wyoming.

POINTS OF COUNSEL FOR DEFENDANT IN ERROR

Proceedings to foreclose a mortgage by advertisement and sale are limited by both the 10 year statute of limitations applicable to foreclosures at law (89-409 Wyo. Rev. Stat. 1931, now Wyo. Com. Stat. 1945 Sec. 3-504) and the provisions of the statute (Wyo. Com. Stat. 1945, Sec. 59-201) authorizing proceedings to foreclose by advertisement and sale.

In jurisdictions where action at law to foreclose a mortgage is barred when the debt is barred, the right to exercise a power of sale in a mortgage or trust deed is likewise barred when action on the debt it secures is barred. 37 A. J. Sec. 656, page 110.

There is a division of opinion as to the effect of the bar of a debt upon the mortgage given to secure such debt. One line of authorities holds that the life of a mortgage of real estate is not measured by that of the obligation which it is given to secure, and that the mortgagee can pursue his remedy on the mortgage by foreclosure notwithstanding the debt or the evidence thereof is barred by the Statute of Limitations. * * * There is, however, another line of decisions holding that a mortgage, since it is a mere incident of the debt cannot be foreclosed when the note or other evidence of the indebedness secured thereby is barred by the statute of limitations. If a suit on the debt is barred, a suit on the mortgage is likewise barred. Dupree v. Mansur, 214 U.S. 161, 53 Law Ed. 951 (1909); Boyd v. Buchanan, 176 Mo.App. 56, 162 S.W. 1075 (1914).

The mortgage is but an incident to the debt. The reasonable and logical conclusion is that the mortgage is only barred when the debt is barred. Balch v. Arnold, 9 Wyo. 17 (1899).

The rights of a mortgagee who forecloses under power of sale should be the same against an adverse possession as the rights of one who forecloses by action, in order that all statutes may be construed reasonably and in harmony. Stryker v. Rasch, 57 Wyo. 34.

Chapter 122 Sec. 1 of Laws of 1945 contains unmistakable evidence that the Legislature intended the limitation thereby incorporated into the statute to apply to mortgages executed prior to its enactment. The Act first provides that a mortgage containing power of sale may be foreclosed by advertisement within 10 years "after the maturity of such mortgage or the debt secured thereby" and then adds a proviso providing a special modification of this rule applicable only to mortgages "executed after the date this Act takes effect". The general rule must, therefore, have been intended to apply to mortgages executed prior to the effective date of the Act as well as to those executed thereafter.

The Legislature may change the remedy for the enforcement of a mortgage where the parties themselves have not provided for a particular remedy. * * * Nor are statutes making such changes objectionable on the ground that they are retroactive in effect. 59 C. J. 1173. James v. Chapman, 50 Wyo. 210, 58 P.2d 439.

When a power of sale in a real estate mortgage authorizes a mortgagee to foreclose and sell "pursuant to statute" or "according to law", the law or statute to be followed is the one in force when the foreclosure and sale is had and not the one in force when the mortgage was given, unless the parties have prescribed a different method, as they may do under Section 71-216, Rev. St. 1931, or unless the Legislature in amending the statute manifests an intent to the contrary. James v. Chapman, supra. Scott v. District Court of Fifth Judicial District, 15 N.D. 259, 107 N.W. 61, 64; Farmers' Life Ins. Co. v. Wolters, 10 S.W.2d 698 (Texas).

Statutes imposing a limitation upon the exercise of a right to execute a power of sale in a mortgage do not impair any contractual right. Webb v. Lewis, 45 Minn. 285, 47 N.W. 803; Davis v. Savage, 168 P.2d 851, 858 (N. M.) 1946.

RINER, Chief Justice. KIMBALL, J., and BLUME, J., concur.

OPINION

RINER, Chief Justice.

This is a proceeding in error to secure the review of a judgment on the pleadings entered by the district court of Big Horn County in an action there pending wherein J. E. Scott was plaintiff and National Tailoring Company, a Corporation, C. A. Zaring, its attorney, and Don C. Parkin, Sheriff of said county were defendants. In this court the defendants other than C. A. Zaring appear as plaintiffs in error but will be referred to hereinafter usually as the "defendants" or as the "Tailoring Company" or the "sheriff". J. E. Scott, the defendant in error here will usually be designated as the "plaintiff" or by his surname. As can be inferred from what has been said, the judgment aforesaid was given in favor of the plaintiff and against the Tailoring Company and its agents and representatives as well as the sheriff.

The original petition of the plaintiff was filed in court on August 30, 1945. The substance of plaintiff's amended petition filed June 18, 1946 may be stated as follows:

As an alleged first cause of action, in paragraphs numbered 1, 2 and 3, it is stated that the Tailoring Company was at all times mentioned, a foreign corporation; that the defendants, Zaring and the sheriff are respectively the attorney and agents for said corporation and acting in its behalf in the matters subsequently set forth; that the Tailoring Company has commenced and is carrying on in said county proceedings by advertisement to foreclose a certain mortgage given by the plaintiff to said Tailoring Company upon real property situated in said county and described in said mortgage; that said mortgage, dated January 31, 1925, was duly recorded in a stated book and page in the County Clerk's office in said county on March 3, 1925, this mortgage being given to secure the principal sum of $ 4,758.25; that according to its terms it became due and payable January 31, 1930; that true copies of the mortgage and the Notice of Foreclosure by advertisement ...