State Sav. Bank v. Mathews

• Decision Date: 20 February 1900
• Citation: 81 N.W. 918,123 Mich. 56
• Court: Michigan Supreme Court
• Parties: STATE SAV. BANK v. MATHEWS et al.

81 N.W. 918

123 Mich. 56

STATE SAV. BANK v. MATHEWS et al.

Supreme Court of Michigan

February 20, 1900

Appeal from circuit court, Wayne county, in chancery; Robert E Frazer, Judge.

Action by the State Savings Bank against James N. Mathews and others for the foreclosure of a mortgage. From a decree directing a sale of the mortgaged premises without redemption, the defendant Jessie W. Radcliffe, a second mortgagee, appeals. Reversed.

James T. Keena, for appellant.

Walker & Spalding, for appellee.

MOORE J.

This is an appeal of a second mortgagee in possession from a decree of foreclosure of a real-estate mortgage authorizing a sale one month after decree entered, and providing that there shall be no redemption from such sale. The appellant appeared in the court below, and asked that a decree be entered providing for redemption according to the terms of Act No 200 of the Public Acts of 1899. The sole questions are on the constitutionality and applicability of that act. The mortgage, foreclosed was made in February, 1897, the bill of complaint was filed February 5, 1898, and the decree was entered November 25, 1899. It is contended that the law, as amended, should not control the proceedings in this case First, because, the mortgage having been executed before the passage of the amendment, which amendment, by its terms materially changes the rights and remedies of the mortgagee, the act, as to such mortgage, would be unconstitutional, as impairing the obligation of contracts; second, because, even if the act can be construed as affecting prior mortgages, it should not be construed to affect proceedings instituted before the act took effect, and the proceedings in this cause must, therefore, be governed by the old law; third, because it is clear, by the reading of the amended law, that it was intended to apply only to foreclosure proceedings instituted in the future, and not to proceedings pending at the time the law went into effect. It is said the statute in force at the execution of the mortgage must govern, and Act No. 200 of the Laws of 1899, as applicable to such mortgage, is unconstitutional, as impairing the obligation of contracts; citing Stevens v. Brown Walk. Ch. 42; Mundy v. Monroe, 1 Mich. 68; Cargill v. Power, Id. 369; Blackwood v. Van Vleet, 11 Mich. 252; Newton v. McKay, 30 Mich. 381; and Barnitz v. Beverly, 163 U.S. 118, 16 S.Ct. 1042, 41 L.Ed. 93. How. Ann. St. � 6701, reads as follows: 'Whenever a bill shall be filed for the foreclosure or satisfaction of a mortgage, the court shall have power to decree a sale of the mortgaged premises, or such part thereof as may be sufficient to discharge the amount due on the mortgage and the costs of the suit; but the circuit judge shall not by such decree order any lands to be sold within one year after the filing of the bill of foreclosure.' The amended section reads just the same as the original section down to the words 'within one year,' which are stricken out, and the words 'six months' are inserted in lieu thereof. Then comes a provision for the redemption of the land any time within six months after the sale. Is this such a change in the law as to impair the contract made between the mortgagor and the mortgagee, or does it simply relate to the remedy? Prior to the passage of the law of 1843 the title to the land was in the mortgagee. He was entitled to its possession, and to the rents and profits accruing therefrom. The law of 1843 took from the mortgagee the right of possession, and did not allow him to bring ejectment until the expiration of the right of redemption after the foreclosure of the mortgage. Of course, this deprived him of the use of the premises, and of the rents and profits to which he was entitled prior to the passage of the law. The court, in Mundy v. Monroe, supra, and Blackwood v. Van Vleet, supra, very properly held that this deprived the mortgagee of a contract right, and impaired the obligation of a contract. The same reason applies in the case of Barnitz v. Beverly, 163 U.S. 118, 16 S.Ct. 1042, 41 L.Ed. 93. Under the law of 1844 the mortgagor had the legal right to remain in possession of the premises two years after the foreclosure sale. This law was changed so as to make the period of redemption run but one year. In Cargill v. Power, 1 Mich. 369, it was held this change in the law would not apply to existing mortgages. It is apparent from reading the opinion that the reason of this holding was that to rule otherwise would be to deprive the mortgagor of the right of possession for one of the two years to which he was entitled under the law before it was amended. It is hardly necessary to add that this would deprive him of a valuable right. In Mundy v. Monroe, 1 Mich., at page 71, it is said: 'It seems to be conceded by all who have written on this subject that, where the law sought to be invalidated affects the remedy only, and does not touch the right of the party secured by the contract, it is not repugnant to that provision of the...