Original
proceeding by the State of South Dakota, on the relation of
the Northwestern Mutual Life Insurance Company, against the
Circuit Court of the Second Judicial Circuit of the State of
South Dakota, within and for the County of Minnehaha, and
John T. Medin, Judge of the court.
RUDOLPH
Presiding Judge.
On the
14th day of December, 1916, Isaac J. Todd and others executed
and delivered to the petitioner, the Northwestern Mutual Life
Insurance Company, a mortgage covering certain lands in
Minnehaha county, S. D., securing an indebtedness then owing
by the mortgagor to the mortgagee. This mortgage contained a
power of sale, as follows: "It shall be lawful for the
party of the second part its successors or assigns to
foreclose this mortgage by action or advertisement, as by
statute in such case made and provided." A default
making operative the power of sale occurred in the conditions
of the mortgage, and on April 5, 1933, the mortgagee
commenced proceeding to foreclose the mortgage by
advertisement. Notice of mortgage sale was published, and on
the 29th day of April, 1933, the mortgagor appeared before
the circuit court of Minnehaha county, and there filed an
application describing the mortgage and stating his interest
and stated that he "desires that said mortgage be
foreclosed by action in the circuit court of Minnehaha
county, South Dakota, that being the court having
jurisdiction of said property." The circuit court did
thereupon enter its order, enjoining the mortgagee from
foreclosing said mortgage by advertisement, and directing
that all further proceedings for the foreclosure be had in
the circuit court of Minnehaha county. The matter is now
before this court as an original proceeding, wherein it is
sought to review the jurisdiction of the circuit court in
entering its order.
We have
recently held that an order entered under the provisions of
section 2876, Rev. Code 1919, and amendments thereto, is not
an appealable order. See Bargmann v. Mutual Benefit Life
Insurance Co. of Newark. N. J. (S. D.) 244 N.W. 325. We
have, therefore, deemed it advisable to entertain original
jurisdiction. The application to restrain the foreclosure by
advertisement was made, and the order entered under the
provisions of chapter 135, Laws 1933, and the validity of
this law is now being attacked. Chapter 135, Laws 1933, is an
amendment of section 2876, Rev. Code 1919. The petitioner
the Northwestern Mutual Life Insurance Company, contends that
the amendment of 1933, if construed to be applicable to its
pre-existing mortgage, violates section 12 of article 6 of
the Constitution of South Dakota, in that it impairs the
obligation of the contractual power of sale contained in the
mortgage.
Prior
to 1927, section 2876, Rev. Code 1919, was as follows
"Power of Sale in Mortgage. Every mortgage of real
property containing therein a power of sale, upon default
being made in the condition of such mortgage, may
be foreclosed by advertisement, in the cases and manner
hereinafter specified; provided, that when the mortgagee or
his assignee has commenced procedure by advertisement, and it
shall be made to appear by affidavit of the mortgagor, his
agent or attorney, to the satisfaction of the judge of the
circuit court of the county wherein the mortgaged property is
situated, that the mortgagor has a legal counterclaim or any
other valid defense against the collection of the whole or
any part of the amount claimed to be due on such mortgage,
such judge may, by an order to that effect, enjoin the
mortgagee or his assignee from foreclosing such mortgage by
advertisement, and direct that all further proceedings for
the foreclosure be had in the circuit court properly having
jurisdiction of the subject matter; and for the purpose of
carrying out the provisions of this section, service may be
made upon the attorney or agent of the mortgagee or
assignee."
This
section was amended by chapter 163, Laws of 1927, to read as
follows:
"Section 2876. Power of Sale in Mortgage. Every mortgage
of real property, containing therein a power of sale, upon
default being made in the condition of such mortgage, may be
foreclosed by advertisement, in the cases and in the manner
hereinafter specified; provided, that when the mortgagee, his
person representative, or assignee, has commenced foreclosure
by advertisement, the mortgagor, or his successor in
interest, may apply to the Circuit Court of the county where
the mortgaged property, or a part thereof, is located, for an
order enjoining such foreclosure. Such application shall be
in writing duly verified by the applicant, his agent or
attorney, and shall set forth the grounds upon which the
applicant will rely for the injunction sought.
"The court shall upon presentation of such petition,
issue its order to show cause setting a time and place for
the hearing of said petition. Upon such hearing, if the Court
is satisfied that the mortgagor, or his successor in
interest, has a legal counter-claim or any other valid
defense against the collection of the whole, or any amount
claimed to be due on such mortgage, the Court may in its
discretion by an order to that effect, enjoin the mortgagee,
his heirs, personal representative, or assigns, as the case
may be, from foreclosing such mortgage by advertisement, and
direct that all further proceedings for the foreclosure of
such mortgage, be had in the circuit court properly having
jurisdiction of the subject matter; provided further, that
for the purpose of carrying out the provisions of the
section, service may be made upon the attorney or agent of
the mortgagee, his heirs, personal representative, or
assigns."
The
1933 session of the Legislature again amended this law by
chapter 135 of the Session Laws of 1933, which is as follows
"Section 2876. Power of Sale in Mortgage. Every mortgage
of Real Property containing therein a power of sale, upon
default being made in the condition of said mortgage, may be
foreclosed by advertisement, in the cases and manner
hereinafter specified; provided, that when the mortgagee or
his assignee has commenced procedure by advertisement, the
mortgagor or his successor in interest may require the owner
and holder of the mortgage to foreclose by action and for
that purpose shall present to the Court having jurisdiction
thereof an application describing the mortgage and stating
his interest and stating the fact that he desires the
mortgage foreclosed by action without necessity of stating
any reasons, and upon such application the Judge of such
Court shall by an order to that effect, enjoin the mortgagee
or his assignee from foreclosing such mortgage by
advertisement, and direct that all further proceedings for
the foreclosure be had in the Circuit Court properly having
jurisdiction of the subject matter; and provided, further,
that in the event issue is joined by appearance or answer on
part of the mortgagor or successor in interest in such
action, the attorney's fees that may be taxed against the
defendants shall not exceed the...
