State ex rel. German Savings & Loan Soc. v. Sears

• Decision Date: 27 January 1896
• Citation: 43 P. 482,29 Or. 580
• Parties: STATE ex rel. GERMAN SAVINGS & LOAN SOC. v. SEARS, Sheriff. [1]
• Court: Oregon Supreme Court

43 P. 482

29 Or. 580

STATE ex rel. GERMAN SAVINGS & LOAN SOC. v. SEARS, Sheriff. ^[1]

Supreme Court of Oregon

January 27, 1896

Appeal from circuit court, Multnomah county; E.D. Shattuck, Judge.

Application on relation of the German Savings & Loan Society, against George C. Sears, sheriff, for writ of mandamus to compel defendant to deed certain land to relator as purchaser at foreclosure sale under a mortgage. From a judgment for defendant, the plaintiff appeals. Affirmed.

Milton W. Smith, for appellant.

Raleigh Stott, for respondent.

BEAN C.J.

This is a mandamus proceeding to compel the sheriff of Multnomah county to execute and deliver to the relator a deed for certain real property purchased by it at foreclosure sale. The facts are that on June 2, 1891, one Charles Rivears, being indebted to the relator in the sum of $6,000 executed and delivered to it a mortgage on the real property in question to secure such indebtedness. Thereafter, Rivears having made default, the mortgage was regularly foreclosed and the premises ordered sold to satisfy such indebtedness. The sale having been duly advertised, on April 20, 1895, the property was sold to the relator by the sheriff of Multnomah county, in the manner provided by law, and such sale was regularly confirmed on the 13th of June, 1895. No redemption having been made within the time provided by the law as it existed at the time the mortgage was made, the relator demanded a deed from the sheriff, which being refused, he commenced this proceeding to compel the execution thereof. A demurrer to the alternative writ was sustained and plaintiff appeals.

At the time the mortgage was executed, the statute ^[1] provided that a judgment debtor, or his successor in interest, might, at any time within four months after the confirmation of an execution sale, redeem the premises by paying the amount of the purchase money, with interest at the rate of 10 per cent. per annum from the date of the sale, together with the amount of any taxes the purchaser may have paid thereon. But, prior to the sale, the law was amended by extending the time for redemption to one year after the confirmation. Laws of 1895, p. 59. And the question now here is whether this latter act was intended to apply to decretal sales on mortgages executed prior to its becoming operative, and, if so, whether it violates article 1, § 10, of the constitution of the United States, which ordains that "no state *** shall pass any law *** impairing the obligation of contracts." That it was intended by the legislature to apply to and regulate redemptions from all execution sales made after its passage is too clear for argument. It is the only statute on the subject, and makes no reservations or exceptions in favor of proceedings for the enforcement of prior contracts. We come, then, to the real question in the case, and that is whether, in its application to foreclosure sales on mortgages executed prior to its passage, it impairs the obligation of the mortgage contract. And, at the outset, it must be admitted that, if it impairs any of the contract rights secured by such mortgages in the slightest degree, it is unconstitutional. Green v. Biddle, 8 Wheat. 92. But the contention for the defendant is, that the statute acts on the remedy only, and in no way enlarges, abridges, or changes the terms or conditions of the contract, or retards or postpones its enforcement, and is not, therefore, within the constitutional inhibition. A contract is an agreement between two or more persons to do or not to do a certain thing, and any law passed subsequent to the making thereof which alters or abridges its terms or prevents its enforcement or releases either of the parties from the performance of their undertaking necessarily impairs the obligations of the contract; but the form of the remedy or mode provided by law for its enforcement is no part of the contract, and may be changed at the will of the sovereign, without impairing its obligations, provided a remedy substantially as efficient be substituted. And, although the new remedy may be less convenient, or may in a sense affect the value of the contract or diminish the value of the performance, it does not for that reason impair its obligations, so long as the duty of full performance still exists. It is one of the contingencies which the parties necessarily have in view in making contracts that the mode of enforcing their performance in the courts may be changed or modified by subsequent legislation, as the public good may demand.

What constitutes the obligation of a contract, within the meaning of the constitution, has been a fruitful subject for judicial discussion and controversy; and, notwithstanding all that has been said upon the question, "no attempt has been made to fix definitely the line between alterations of the remedy which are to be deemed legitimate and those which, under the form of modifying the remedy, impair such rights. Every case must be determined upon its own circumstances." Von Hoffman v. City of Quincy, 4 Wall. 535. It has been frequently said in the opinions of the supreme court of the United States, whose decisions, so far as applicable, are, of course, controlling on the question here presented, that the laws subsisting in a state at the time a contract is made including those which affect its validity, construction, discharge, or enforcement, enter into and form a part of the contract, as if they were expressly referred to or incorporated in its terms. Von Hoffman v. City of Quincy, 4 Wall. 550; Walker v. Whitehead, 16 Wall. 314; Edwards v. Kearzey, 96 U.S. 595; Seibert v. Lewis, 122 U.S. 284, 7 Sup.Ct. 1190; Louisiana v. New Orleans, 102 U.S. 206. But the expression of the judges in these, as in all, cases, must be understood in the light of the question to be decided; for, as said by Chief Justice Marshall in Ogden v. Saunders, 12 Wheat. 233, "the positive authority of a decision is coextensive only with the facts on which it is made." As so understood and interpreted, the meaning of the rule seems to be that the laws existing at the time a contract is made, which enter into and form a part of it, are only those which, "in their direct or necessary legal operation, control or affect the obligations of such contract." Insurance Co. v. Cushman, 108 U.S. 65, 2 Sup.Ct. 236. It is admitted by all to be entirely competent for the state to change or modify the form of the remedy as it may see fit as to past as well as future contracts, without violating the provisions of the constitution, so long as a substantial remedy remains and no right secured by the contract is impaired. "For, undoubtedly," says Mr. Chief Justice Taney in Bronson v. Kinzie, 1 How. 311, "a state may regulate at pleasure the modes of proceeding in its courts in relation to past contracts, as well as future. It may, for example, shorten the period of time within which claims shall be barred by the statute of limitations. It may, if it thinks proper, direct that the necessary implements of agriculture, or the tools of the mechanic, or articles of necessity in household furniture, shall, like wearing apparel, not be liable to execution on judgments. Regulations of this description have always been considered in every civilized community as properly belonging to the remedy, to be exercised or not by every sovereignty, according to its own views of policy and humanity. It must reside in every state to enable it to secure its citizens from unjust and harassing litigation, and to protect them in those pursuits which are necessary to the existence and well-being of every community. And, although a new remedy may be deemed less convenient than the old one, and may in some degree render the recovery of debts more tardy and difficult, yet it will not follow that the law is unconstitutional. Whatever belongs merely to the remedy may be altered according to the will of the state, provided the alteration does not impair the obligation of the contract. But, if that effect is produced, it is immaterial whether it is done by acting on the remedy or directly on the contract itself. In either case it is prohibited by the constitution." And in Tennessee v. Sneed, 96 U.S. 74, it is said: "The rule seems to be that, in modes of proceeding and of forms to enforce the contract, the legislature has the control, and may enlarge, limit, or alter them, provided that it does not deny a remedy or so embarrass it with conditions and restrictions as seriously to impair the value of the right." In conformity to this doctrine, it was held in Antoni v. Greenhow, 107 U.S. 769, 2 Sup.Ct. 91, that an act of the Virginia legislature requiring the holder of certain coupons to first pay his taxes in cash, and file his coupon in the court of appeals, and afterwards, in some circuitous way, receive back his money, was an act affecting the remedy only, and did not impair the obligation of a contract, although the funding act under which the coupons were issued required the state to receive them for all taxes and demands due her, and authorized the writ of mandamus to compel the tax collector to so receive them. So, also, in Morley v. Railway Co., 146 U.S. 162, 13 Sup.Ct. 54, a law of the state of New York reducing the rate of interest on a judgment based on a contract for the payment of money which, when matured, began under the then-existing law to draw interest at a specified rate per cent., was held to be valid under the federal constitution. Again, in Terry v. Anderson, 95 U.S. 628, it was held that a law shortening the period prescribed by the statute of limitations in force when the right of action accrued was valid, a reasonable time having been given in which to commence the action before the bar took effect, and that such...