Opinion
No. 1955
June 9, 1936
CONSTITUTIONAL LAW — CHANGE OF REMEDY — MORTGAGES — FORECLOSURE — PUBLICATION PERIOD — VESTED RIGHTS — STATUTORY CONSTRUCTION.
1. Legislature may change remedy for enforcement of mortgage where parties have not provided for particular remedy, but substituted remedy must afford fair method of enforcing contract and not impair its obligation. 2. Statutes changing remedy for enforcement of mortgage where parties have not provided for particular remedy are not objectionable as being in effect retroactive. 3. When power of sale in mortgage authorizes mortgagee to foreclose and sell "pursuant to statute" or "according to law," law or statute to be followed is the one in force when foreclosure and sale are had and not the one in force when mortgage was given, unless parties have prescribed different method, or unless Legislature in amending statute manifests intent to contrary. 4. Statute which shortened time of notice of mortgage foreclosure sale by two weeks held not to deprive mortgagor of any substantial right, so as to entitle mortgagor to such notice as was provided by statute in force when mortgage was executed (Rev. St. 1931, § 71-207). 5. Words "in the same manner," within statute providing that all rights and liabilities under revised laws shall continue and be enforced in the same manner as if revisions had not been made, held not to indicate legislative intention that words should include same number of publications of notice of mortgage foreclosure sale as had been provided in prior statute (Rev. St. 1931, §§ 71-207, 112-206). 6. Statute requiring four weeks' publication of notice of mortgage foreclosure sale held to apply to proceeding to foreclose mortgage which authorized mortgagee to foreclose and sell according to statute "now or hereafter in force," notwithstanding statute at time mortgage was executed required six weeks' publication of notice of sale, since change did not affect mortgagor's substantial rights, but merely changed remedy (Rev. St. 1931, § 71-207). 7. The right to a particular remedy is not a vested right.
APPEAL from the District Court, Albany County; V.J. TIDBALL, Judge.
For the appellants and defendants, there was a brief by J.R. Sullivan and G.R. McConnell of Laramie and oral argument by Messrs. Sullivan and McConnell.
The question involved is whether Chapter 73, Section 64, Laws 1931, changing the publication period in mortgage foreclosures from six to four weeks applies to mortgages executed before its passage and foreclosed after its enactment. Their contention is that the statute applied to the foreclosure of mortgages executed before its passage. 12 C.J. Sec. 732, page 1071. The change merely affects the remedy. James v. Stull, 9 Barb. (N.Y.) 482; State v. Court, (S.D.) 249 N.W. 631; 25 R.C.L. 792; Webb v. Moore, 25 Ind. 4; Hopkins v. Jones, 22 Ind. 310; Atkinson v. Duffy, 16 Minn. 45; Orvik v. Casselman, 105 N.W. 1105; 59 C.J. 1188, 1191; Sansberry v. Hughes, 174 Ind. 638, 92 N.E. 738; Beaumont Syndicate v. Broussard, 64 S.W.2d 993; Hanson v. Bank of Omaha, 262 N.W. 228. If it were not the intention of the legislature to make the section applicable to such mortgages, should not the statute itself affirmatively disclose that fact? And, is there any statute manifesting a contrary intention? The cases above cited disclose a difference between statutes affecting substantial rights and those affecting procedure only. This distinction is manifested in the text of 59 C.J. 1173, Section 100. Counsel for appellee direct attention to Section 180, Chapter 73, Laws 1931 phrased as a general saving clause. But in considering said statute, we should keep in mind the provisions of Section 112-104, R.S., dealing with pending actions, prosecutions or proceedings, civil or criminal, relating to the subject of remedy. The meaning of the word "manner," as used in the statute, must be determined in the light of the contract or statute in which it is used. Melschermer v. McKnight, (Miss.) 46 So. 827; U.S. v. Norris, Fed. Cas. No. 15,815; Porter v. Brook, (Okla.) 94 P. 645; Bankers Life Insurance Company v. Robbins, (Nebr.) 80 N.W. 484; Grand Junction Sugar Company v. Fellows, (Colo.) 220 P. 992; Duty v. Railway Company, (W.Va.) 73 S.E. 331. The purpose of saving clauses is to preserve pre-existing rights. 59 C.J. 1192. The only logical interpretation of the Revised Statutes, Section 112-104, is that it applies to judicial proceedings so far as remedies are concerned, and foreclosure by advertisement is not a judicial proceeding. Herbert v. Bulte, (Mich.) 4 N.W. 215; Dwight v. Phillips, (N.Y.) 48 Barb. 116, 119. That statute in question is remedial in its character and does not change any existing rights. It is therefore applicable to proceedings taken after its enactment, though relating to acts done previously thereto.
For the plaintiff and respondent, there was a brief and also oral argument by Tom H. Barratt of Laramie.
The statute which cuts down the period of advertising for the foreclosing of mortgages from six weeks to four weeks is an impairment of contractual rights, duties and obligations and if operating in the case at bar is clearly unconstitutional and void. The following authorities have a direct bearing on the subject: Bronson v. Kinsey, 1 How. 311; McCracken v. Hayward, 20 How. 608; Grantley's Lessee v. Ewing, 3 How. 707; Howard v. Bugbee, 24 H. 461; Gunn v. Barry, 15 Wall. 610; Walker v. Whitehead, 16 Wall. 314; Edwards v. Kearsey, 96 U.S. 595; Barnitz v. Beaverly, 163 U.S. 118; Bradley v. Lightcap, 195 U.S. 1. The remedy is subject to legislative modification, the mortgage contract is not. Cargill v. Powers, 1 Mich. 369. Six weeks publication being a condition precedent to a valid sale, when this mortgage was executed, the reduction of the publication term to four weeks, cuts off two weeks of the mortgagor's right of redemption, which was a part of her contract when she executed the mortgage. Section 180 of Chapter 73, Laws 1931. A general saving clause had an important bearing on the question. It is well settled that the right of redemption under a power in a mortgage is governed by the law in force at the time the mortgage was made. Skeels v. Blanchard, 81 A. 913; Lennell v. Lyford, 72 Me. 280; Company v. Banking Company, 113 Fed. 958; Smith v. Green, 41 Fed. 455; Hynes v. Tredway, (Cal.) 66 P. 313; Green v. Thornton, (Cal.) 96 P. 382; Pawtucket v. Landers, 47 P. 621; Breman Mining Company v. Breman, (N.M.) 79 P. 481; Wiltsie on Mortgage Foreclosure, page 1325. The equity of redemption is a distinct estate. Clark v. Rayburn, 8 Wall. 318. The cases cited in appellants' brief do not support their contentions. The legislature does not possess constitutional power to change the period of advertising necessary to foreclose existing mortgage obligations. 59 C.J. 1171; 41 C.J. 925 and cases cited. Fisher v. Green, 31 N.E. 172; Gulush v. Meserve, (Colo.) 208 P. 348; Richardson v. Fitzgerald, 109 N.W. 866. Section 180 of Chapter 73 of the Laws of 1931 specifically provides that Section 71-207, R.S. 1931 shall not affect the existing mortgage obligations. The statute first cited appears in the revision as Section 112-206, R.S. 1931, and when read in connection with the statute reducing the publication period clearly shows an intention to save a mortgage of the kind in question in this case from the operation of Section 64, Chapter 73, Laws 1931. Muller v. McCann, 151 P. 621; Edwards v. Kearsey, 96 U.S. 595; Purcell v. Barnett, 30 Okla. 605. Appellant contends that the destruction of two weeks of time within which the mortgagor could save his property is just mere "manner"; that it is only "procedure"; that it is lightly to be treated and flippantly alluded to as "remedial." Remedial of what? It is an act of destruction, of impairment, of obliteration, as to two weeks time, and the Supreme Court of the United States has so decided in the cases hereinafter cited. The Supreme Court of Nevada in State v. Eureka Company, 8 Nev. 15 held that the word "manner," in the statutes under consideration, included the element of time. The word was construed to include time in U.S. v. Morris, Fed. Case 15,815, also in Bankers Life Ins. Co. v. Robbins, 59 Neb. 170; Harris v. Doherty, 119 Mass. 142. The manner of doing a thing and the time of doing it are distinct things, but the manner may embrace time, if such was the intention of the legislature. Importers v. Brook, (Okla.) 97 P. 645; State v. McClure, (Wis.) 64 N.W. 992. Appellants are resorting to a subtle and forced construction of the meaning of the statute, which is not permissible. Board v. Blakely, 20 Wyo. 259. In foreclosing under a statute, every requirement must be strictly complied with. Wiltsie on Mortgage Foreclosure, 4th Ed., Vol. 2, page 1078. Since pre-existing mortgage obligations were especially excepted from the operation of Section 71-207, R.S. 1931, by Section 180, Chapter 73, Laws 1931, the words, "statutes, * * * hereafter in force," as the same appear in the mortgage obligation, have no application to the case at bar. We will not go into the above proposition at length. We feel that we have shown that Section 64, Chapter 73, Laws 1931, reducing the publication period in mortgage foreclosures from six to four weeks, is a substantial impairment of contractual rights, duties, and obligations, and clearly unconstitutional and void, if it should operate in the case at bar. Section 180, Chapter 73 expressly prohibits a retrospective operation of said statute. Section 4627, C.S. 1920, in effect when the mortgage was executed, required six weeks publication. The redemption period was six months after date of sale. The reduction of the publication period reduces the redemption period, thus destroying rights under the law, in effect when the law was made.
Ray E. Lee, Attorney General, filed the following memorandum for consideration in reviewing the judgment of the court below:
"The State of Wyoming is not a party to the above action, and has not entered any appearance therein. However, as Attorney General of the State of Wyoming, I have been informed by the Commissioner of Public Lands that something more than two hundred mortgages have been foreclosed by special attorneys representing the Farm Loan Board, such mortgages being the property of the State of Wyoming, and that the procedure followed in such foreclosures was, in practically every case, a foreclosure by advertising, and the period of advertising was four weeks, as is provided by the 1931 statute involved in this proceeding. Therefore, as Attorney General of the State of Wyoming, I am taking the liberty of handing the court the following memorandum of authorities, most of which have not been cited in the brief of counsel seeking to sustain the procedure under the 1931 law. Webb v. Moore, 25 Ind. 4; Cargill v. Power, I Michigan 369; State Savings Bank v. Mathews, 81 N.W. 918; Butler v. Palmer, I Hill (N.Y.) 324; Anderson v. Anderson, 29 N.E. 35; Home Building and Loan Association v. Blaisdell, 78 L.Ed. 413, 88 A.L.R. 1481, 290 U.S. 398; Des Moines Joint Stock Land Bank v. Nordholm, 253 N.W. 701; Mortgage and Contract Company v. Sage et al., 266 Mich. 165, 253 N.W. 255; City of Pasadena v. Chamberlain, 36 P.2d 387; Harris v. Little Red River Levee District No. 2, 69 S.W.2d 877; Worthen Company v. Delinquent Lands, 75 S.W.2d 62; 12 Corpus Juris 1077."
In 1928 Anna D. James gave Clyde Chapman and Mary E. Chapman a real estate mortgage containing a power of sale authorizing the mortgagees, in the event of default, to foreclose the same and to sell the property "according to the statute in such case made and provided now or hereinafter in force and in the manner therein prescribed." The statute then in force required publication of notice of sale for six weeks upon foreclosure by virtue of such a power. Section 4629, Wyo. C.S. 1920.
On September 1, 1931, an act known as Chapter 73 of the Session Laws of 1931 went into effect. Section 64 of the act reads as follows: "That section 4629 Wyoming Compiled Statutes 1920 be revised and reenacted to read as follows: Notice that said mortgage will be foreclosed by a sale of the mortgaged premises * * * shall be given by publishing the same for four consecutive weeks." R.S. 1931, § 71-207.
Default having occurred the mortgage was foreclosed under the power of sale and the property sold in 1934, the notice of sale being published four weeks pursuant to section 64, supra, of the act of 1931. The legality of the sale being challenged the District Court of Albany County set it aside on the ground that section 4629, C.S. 1920, in force when the mortgage was given and requiring six weeks notice, governed the foreclosure instead of section 64, of Chapter 73 of the Session Laws of 1931. To determine which statute applies is the matter now before us.
In the case of a real estate mortgage with a power of sale to the mortgagee to foreclose and sell pursuant to law upon default may the legislature amend the law so as to permit the mortgagee to give a shorter notice of sale than was required by the law in force at the date of the mortgage?
By statutory provision in this state, whether a mortgage shall contain a power of sale is a matter of contract between the parties, and they may "provide therein as they may see fit as to the manner of foreclosure and sale." R.S. 1931, § 71-216. When parties use, as they usually do, and as was used in this case, the very general terms that foreclosure and sale is to be had pursuant to statute or according to law, what statute or law is meant, the one when the mortgage was given or the one when foreclosure and sale is had?
"When parties do not expressly fix the terms on which such powers may be exercised, but agree that the act to be done in the future may be done according to the law governing that subject, they consent to be governed by the law in force when, under the terms of the contract, it may become necessary to exercise the power. They contract with knowledge that the legislature may change the remedy and ought not to be presumed to have intended in cases of such change that the contract should become inoperative." International Bldg. Loan Assn. v. Hardy, 86 Tex. 610, 26 S.W. 497, 24 L.R.A. 284.
A statute in New York authorized sales of mortgaged property under a power conferred by the mortgage upon notice being given for twenty-four weeks and while that law was in force a mortgage was executed which authorized a sale under a power "according to law," but before the sale the law was so changed as to authorize such sales to be made on notice given only for twelve weeks. A sale made under the last law was held to be valid on the ground that the words "according to law" meant in compliance with the law in force when the sale became necessary. James v. Stull, 9 Barb. 482.
In Scott v. District Court, 15 N.D. 259, 107 N.W. 61, the mortgage contained a power of sale to be exercised "agreeably to the statute in such case made and provided." The court said: "The statute therein referred to means the law which might be in force when the mortgagee resorted to his remedy. So construed it is plain that the stipulation for the remedy contemplated that it should be subject to future legislation as to the manner of exercising it."
In Webb v. Lewis, 45 Minn. 285, 47 N.W. 803, the power of sale was to be exercised "agreeably to the statute in such case made and provided." The court, citing James v. Stull, supra, said: "If it was necessary in order to sustain the power it would be proper to assume that the parties referred to the unrepealed sections of title 1, although we think it more reasonable to construe it as referring to the statute in force at the time the power should be exercised." Again the court says: "But it is unquestionably true that while the power itself rests upon the convention of the parties, yet the manner of its exercise, being analogous to the remedy in judicial proceedings, is, even as to existing mortgages, subject to legislative change and modification in any way not inconsistent with the express terms of the contract of the parties, and which leaves to the mortgagee an available and effective mode of executing the power."
The court in Orvik v. Casselman, 15 N.D. 34, 105 N.W. 1105, said: "Another fallacy in appellant's argument lies in the assumption that the stipulation granting a power of sale in case of default is an agreement that the remedy shall be exercised agreeably to the statute in force when the mortgage was given. The manner of exercising such a power has always been the subject of legislative regulation in this jurisdiction and when parties stipulate for that remedy, it must be presumed that they contemplate that the remedy shall, like any other remedy, be exercised agreeably to the statute in force when the remedy is invoked." See further: State ex rel. v. Circuit Court, 61 S.D. 356, 249 N.W. 631; Beaumont Petroleum Syndicate v. Broussard, (Tex.Civ.App.) 64 S.W.2d 993; Hanson v. Federal Land Bank, (S.D.) 262 N.W. 228.
Nor can there be any question but that the legislature may change the remedy for the enforcement of a mortgage where the parties themselves have not provided for a particular remedy. "The character and legal effect of a mortgage and the rights, duties and liabilities of the parties under it, are fixed by the law in force at the time of its execution and can not be affected by statute subsequently passed, except in so far as they relate merely to the remedy or to matters of procedure." 41 C.J. 449. See also 12 C.J. 1067 and cases cited to the effect that the legislature may regulate or change remedies for the enforcement of existing contracts. A limitation, of course, is that the substituted remedy must afford a fair method of enforcing the contract, and not impair its obligation. Nor are statutes making such changes objectionable on the ground that they are retroactive in effect. 59 C.J. 1173.
The very language of the mortgage before us in this case clearly and beyond question shows that the parties contemplated the possibility of a change in the statute prescribing the method of foreclosure and sale and their agreement is to the effect that the statute in force at the time of foreclosure and sale shall govern. This language is that the mortgagees may foreclose and sell "according to the statute in such case made and provided, now or hereafter in force and in the manner therein prescribed."
Our conclusion upon this branch of the case is, therefore, that 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, R.S. 1931, or unless the legislature in amending the statute manifests an intent to the contrary.
The mortgagor insists that by section 180 of chapter 73, supra, (R.S. 1931, § 112-206) the legislature has manifested a clear intent that section 64 is not to apply to preexisting mortgages and that the only "statute in force" applicable to the mortgage before us is the old one requiring six publications. Section 180 provides: "The laws and parts of laws herein revised and repealed shall not affect any act done or any right accruing or accrued, * * * before the said revision or repeal, but all rights and liabilities under said laws shall continue and be enforced in the same manner as if said revisions and repeals had not been made."
Chapter 73, Session Laws of 1931, of which sections 64 and 180 are a part, contains 184 sections and ranges over a large part of the whole field of our statutory law. Its title is "An act for the codification and general revision of the laws of the state of Wyoming revising sundry provisions of existing laws and repealing others." It deals with both rights and remedies.
Now the purpose of section 180 was, of course, to preserve to the individual rights he might have under the laws revised or repealed. As long as section 4629, C.S. 1920, remained in force the mortgagor, of course, had the right to insist upon its observance, but he did not have the right to insist upon its remaining unchanged. It was a part of the remedy for the enforcement of the mortgage, and as said by Judge Cooley, "the right to a particular remedy is not a vested right." Const. Lim. (8th ed.) p. 754.
Did the shortening of the notice of sale two weeks deprive the mortgagor of any substantial right? The purpose of the publication of notice of sale is to inform the mortgagor and to notify and attract bidders. It does not follow that more bidders will be attracted and a higher price realized by six publications than by four. Nor can it be said that six publications are more advantageous to the parties than four. In the opinion of the legislature four is preferable to six, otherwise the change would not have been made. The modern trend in this country has been to reduce the number of publications of legal notices of sales of property due, no doubt, to the great increase in late years in the dissemination of news and the rapid advance in the means of communication and transportation.
Nor does the shortening of the notice of sale shorten the period of redemption, for that commences from the date of sale. It may, however, by advancing the date of sale by two weeks, shorten the period which the mortgagor may remain in the possession of his property, but that is merely incidental to the change of remedy.
It has been said that "a repealing statute which preserves rights, contemplates definite and substantial ones which are, or are in the nature of, vested property rights, and not mere inchoate personal privileges to which, in a legal sense, one has no indefeasible vested claim." Matter of Wentworth, 230 N.Y. 176, 187, 129 N.E. 646, 649. And see Miller v. Hagemann, 114 Ia. 195, 86 N.W. 281; Bigelow v. Pritchard, 21 Pick. 169.
Stress is also laid upon the language of section 180 that all rights and liabilities under the revised laws shall continue and be enforced in the same manner as if said revisions had not been made. The manner of giving notice of sale remains the same under the new as under the old law, the only change being in the number of publications. But it is said "in the same manner" includes the element of time, i.e., the same number of publications. "Whether the word `manner' or the phrase `in the same manner,' includes the element of time, has been answered by the courts both in the affirmative and in the negative. * * * We think that the question is, in every case, one of intent, and that the true rule may be formulated substantially as follows: Whether the word `manner' shall be construed as including, not only the way or mode of doing a thing, but also the time of doing it, depends upon the intention of the lawmakers, to be gathered from the context; that is, the `manner' of doing a thing and the `time' of doing it are distinct things, and ordinarily the word `manner' will not be construed as including the element of `time,' unless it shall appear from the context that the lawmakers intended that it should." Moore v. City Council, 58 Calif. App. 555, 209 P. 64. We find nothing in chapter 73 of the act of 1931 to indicate that the legislature intended that the phrase "in the same manner" was to include the same number of publications.
We are of the opinion that section 64 of the act of 1931 applied to the foreclosure proceedings in question in this case, and that, therefore, the judgment of the lower court should be reversed.
KIMBALL, Ch. J., and BLUME, J., concur.