Wylie v. Hays

• Decision Date: 06 June 1924
• Docket Number: (No. 458-3980.)
• Citation: 263 S.W. 563
• Parties: WYLIE v. HAYS et al.
• Court: Texas Supreme Court

263 S.W. 563

WYLIE v. HAYS et al.

(No. 458-3980.)

Commission of Appeals of Texas, Section B.

June 6, 1924.

Certified Questions from Court of Civil Appeals of Third Supreme Judicial District.

Trespass to try title by C. S. Wylie against W. B. Hays and others. Judgment for defendants, and plaintiff appealed to the Court of Civil Appeals, which certified questions to the Supreme Court. Questions answered.

Geo. W. Barcus, of Waco, for appellant.

S. E. Stratton, of Waco, for appellees.

STAYTON, J.

Certified questions from the Court of Civil Appeals for the Third Supreme Judicial District, in an appeal from McLennan county. The statement and questions, arising as certified by the Court of Civil Appeals, are as follows:

"The appellant brought this suit against appellees for the purpose of trying title to a certain tract of land. The trial resulted in a judgment for the defendants, and the plaintiff has brought the case to this court by appeal, and it has been submitted on briefs and oral argument of both parties.

"The defendants' title and the correctness of the judgment appealed from depend upon the validity of a trustee's sale made under a deed of trust executed by the plaintiff, C. L. Wylie, to W. B. Hays, Jr., as trustee, for the use and benefit of W. B. Hays and W. O. Van Wyck, dated March 25, 1916. The land which was conveyed by the deed of trust is situated in Reagan county, Tex., but it is stipulated in the instrument referred to that, in case of default and a sale by the trustee, such sale shall be made at the courthouse door of McLennan county. At the time the deed of trust was executed, all the parties interested therein resided in McLennan county. Appellant failed to pay the debt when due, and, at the request of the beneficiaries, a trustee's sale was made, and the deed of trust thereby forclosed, not in McLennan county, but in Reagan county, where the land is situated, and the appellees hold under that sale.

"It is provided by article 3759 that sales of real estate, made under powers conferred by deeds of trust or other contract lien, shall be made in the county in which such real estate is situated. Appellant challenges the constitutionality of that statute, and contends that, if it was intended by the Legislature to thereby deprive the parties to trust deeds of mortgages with power of sale from stipulating in the instrument creating the lien that if the property is sold by the trustee such sale shall be made at some place other than the county in which the land is situated, then the statute is violative of both the federal and state Constitutions, because it constitutes an arbitrary and unreasonable restriction upon the power of individuals to make contracts concerning their own business affairs. On the other hand, it is contended by appellees that the statute in question is a proper exercise of the police power vested in the Legislature, and it is therefore constitutional.

"There may be some decisions in this state which tend to support appellees' contention, but the later cases of Hess v. Denman (Tex. Civ. App.) 218 S. W. 162, Williams v. Baldwin (Tex. Com. App.) 228 S. W. 557, Wright v. McAdams Lumber Co. (Tex. Com. App.) 234 S. W. 878, and Michael v. Crawford, 108 Tex. 352, 193 S. W. 1070, it seems to us, tend to support appellant's contention.

"Appellant further contends that since the deed of trust which he gave provides that the land, if sold by the trustee, should be sold in McLennan county, and since the pretended sale of the land under the deed of trust was made in Reagan county, where the land was located, rather than in McLennan county, where the deed of trust provides same should be sold, that the pretended sale by the trustee was void and passed no title because the trustee did not have the power to sell the land in Reagan county.

"The questions which are thus presented are of importance, and in order to secure a final decision as early as possible, this court has decided to, and does hereby, certify to the Supreme Court for its decision the following questions:

"First: Is article 3759 of the Revised Statutes of Texas unconstitutional in so far as it attempts to prevent or prohibit the owner of property from making a contract to have his land sold under a deed of trust lien in any county except where the land is located?

"Second: Did the trustee have the right to sell the land in this instance in Reagan county when the deed of trust provided that it should be sold, if at all, in McLennan county?

"Third: Did the sale by the trustee of the land in Reagan county pass any title, in view of the fact that the deed of trust provided that the land, if sold by the trustee, should be sold in McLennan county?"

In addition to the ground of attack mentioned in the certificate, appellant, in a written argument lately filed, assails the statute as being in contravention of section 16, art. 1, of the Constitution of Texas, by "impairing the obligation of contracts." But it would be impossible in this case for that limitation to apply, because it has reference alone to contracts made prior to the legislative action complained of, and hence to vested rights, whereas the deed of trust in this case was executed after the statute that is mentioned in the certificate had been in force for many years. The solution of the questions certified will therefore depend, not upon the rules regarding the impairment of the obligation of contracts or retroactive laws, but upon the application of the elements stated in the certificate, that is, the liberty of contract, on the one hand, and the operation of the police power, on the other. Freund, Police Power, §§ 499, 555-557.

That a power of sale created by a deed of trust, or other contract lien, is a valuable contractual right, the full and free exercise of which is maintained by the provision of the Fourteenth Amendment to the federal Constitution guaranteeing due process of law and by the corresponding provision of the Texas Constitution in section 19, art. 1, is clear; and that this right may be regulated, or in certain instances denied, by the Legislature in a proper use of the police power, is equally clear and most thoroughly settled.

The controlling questions presented are when and in what manner this power may be exercised to the extent of depriving citizens of the full and free enjoyment of their liberty of contract, and whether the statute under investigation is a valid expression of that power.

While the statement is perhaps too liberal to the side of constitutional attack, it may be safely said that, if a law regulating contracts to be executed in the future has as its object that which may be clearly and reasonably considered by the Legislature to be the public welfare, prescribes means reasonably calculated and necessary to aid in accomplishing that object, and operates in a reasonable and not an arbitrary, capricious, or oppressive manner, it is within the police power, constitutes due process of law, and, consequently, is superior to the liberty of contract. H. & T. C. v. Dallas, 98 Tex. 412, 84 S. W. 648, 70 L. R. A. 850; Nash Hardware Co. v. Morris, 105 Tex. 217, 146 S. W. 874; Spann v. City of Dallas, 111 Tex. 350, 235 S. W. 515, 19 A. L. R. 1387; Lawton v. Steele, 152 U. S. 133, 14 Sup. Ct. 499, 38 L. Ed. 385; Holden v. Hardy, 169 U. S. 366, 16 Sup. Ct. 383, 42 L. Ed. 780; Atlantic Coast Line v. Riverside Mills, 219 U. S. 203, 31 Sup. Ct. 164, 55 L. Ed. 167, 31 L. R. A. (N. S.) 7; Chicago, B. & Q. Ry. Co. v. McGuire, 219 U. S. 549, 31 Sup. Ct. 259, 55 L. Ed. 328; Schmidinger v. Chicago, 226 U. S. 583, 33 Sup. Ct. 182, 57 L. Ed. 364, Ann. Cas. 1914B, 284; Waldschmit v. City of New Braunfels (Tex. Civ. App.) 193 S. W. 1078; Freund, Police Power, §§ 3, 499, and authorities below cited.

In the examination of the statute under consideration, the first two of the elements above mentioned may be conveniently considered together; that is, whether the object of the law and the means used are within the requirements of the foregoing statement.

The statute was first enacted in 1889, remained in the same form until 1915, and in that year was twice amended; the Legislature on each occasion substantially preserving the original features and perfecting them, and at all times requiring that the place of sale should be in the county where the land lay. The last amendment will be quoted (with the exception of parts of it pertaining appropriately to sales in unorganized counties and to cases where the incumbered land lies in more than one county):

"All sales of real estate made in this state under powers conferred by any deed of trust or other contract lien shall be made in the county in which such real estate is situated. * * * Notice of such proposed sale shall be given by posting written notice thereof for three consecutive weeks prior to the day of sale in three public places in said county * * * one of which shall be at the courthouse door of the county in which such sale is to be made, * * * or such notice may be given as required by statute in case of judicial sale, or such notice may be given in either of said methods, or as may be provided for in said deed of trust or contract lien; and such sales shall be made at public vendue, between the hours of 10 o'clock a. m. and 4 o'clock p. m. of the first Tuesday in any month. * * *" Vernon's Ann. Civ. St. Supp. 1918, art. 3759.

It will be seen that this statute contains four regulations: That every sale of land made in this state under a power of sale shall be held upon notice, at a regular time, at public auction, and in the county where the land lies. In considering what the object of the regulations is and whether they come within the police power, it will be proper to observe some general principles and to apply them.

"A large discretion is necessarily vested in the Legislature to determine, not only what the interest of the public may require," but also "what measures are...