« PreviousContinue »
In a recent number of this paper we announced the fact that the Supreme Court of the United States had decided the Relief Laws of Illinois (and the decision is equally applicable to the Relief Laws of other States,) to be UNCONSTITUTIONAL. Through the kindness of a friend at Washington, we are now enabled to lay before our readers the Opinion of the Court in extenso. It is perhaps the most important Opinion that has been delivered, on a constitutional question, since the origin of our government. It will do more to restore confidence than any legislation. We learn that it has produced a great sensation at Washington, as it will do throughout the country, and especially in those States where valuation, stay, or relief laws have been enacted. All such laws are nullified by this decision, in reference to contracts made previous to their enact ment; and it is such contracts alone, that prompt the enactment of such laws. All other Courts, both State and national, are bound by this decision. It is now for the first time given to the public: having been revised for the purpose by Chief Justice Taney.
SUPREME COURT OF THE U. STATES.
Arthur Bronson, Comp't.)
John H. Kinzie and Juli-
Mr. Chief Justice Taney delivered the Opinion of the Court.
This case comes before the Court upon a division of opinion in the Circuit Court of the United States for the District of Illinois, upon certain questions which arose in the case, and which have been certified to this Court according to the act of Congress.
It appears from the record that on the 13th of July, 1838, John H. Kinzie executed a bond to Arthur Bronson conditioned for the payment of 84000 on the 1st of July, 1842, with interest thereon to be paid semiannually; and in order to secure the payment of the said sum of money and interest, Kinzie and wife on the same day conveyed to the said Bronson in fee simple by way of mortgage, one undivided half part of certain houses and lots in the town of Chicago, with the usual proviso that the deed should be null and void if the said principal and interest were only paid; and Kinzie among other things covenanted that if default should be made in the payment of the principal or interest or any part thereof, that it should be lawful for Bronson or his representatives to enter upon and sell the mortgaged premises at public auction, and as Attorney of Kinzie and wife, to convey the same to the purchaser, and out of the moneys arising from such sale to retain the amount that might then be due him on the aforesaid bond, with the costs and caarges of sale, rendering the overplus, if any, to Kinzɩe.
when any execution should be issued out of any of the Courts of the State, and be levied on any property real or personal or both, it should be the duty of the offi holders of the proper county one of whom should be cer levying such execution to summon three housechosen by such officer, one by the plaintiff and one by the defendant in the execution; or in default of the parties making such choice, the officer should choose for them; which householders after being only sworn, by such officer so to do, should fairly and impartially value the property upon which such execution was levied having reference to its cash value; and that they should endorse the valuation thereof, upon the execution, or upon a piece of paper thereunto attached signed by them; and when such property should be offered for sale, it should not be struck off, unless twothirds of the amount of such valuation should be bid therefor. It further provided among other things according to the provisions of that act, whether the that all sales of mortgaged property should be made foreclosure of said mortgage was by judgment at law, or decree in Chancery. It also directed that the provisions of this law should extend to all judgments renthat might be rendered on any contract or cause of dered prior to the 1st of May 1841, and to all judgments action accruing prior to that day, and not to any other judgment than as before specified. These are in substance the provisions of these acts as far as they are material to the present controversy.
On the 19th of June 1841 after the laws abovementioned had been passed, the Circuit Court of the Uni ted States for the District of Illinois adopted the following rules.
"Ordered that when the Marshal shall levy an execution upon real estate he shall have it appraised and sold under the provisions of the law of this State entitled "An Act regulating the sale of property," approved 27th February 1841, if the case come within the provisions of that law; and any two or three householders selected under the law agreeing, may make the valuation of the premises required."
"Before the sale of any real estate on execution the Marshal shall give notice thirty days in a newspaper published in the county where the land lies; and if there be no paper published in the county, then the notice shall be given thirty days before the sale, by notices as the statute requires. The Court adopt the 8th section of the act of this State to amend the act concerning judgments &c. passed 19th of February 1841 which regulates the sale of mortgaged premises &c. except where special direction shall be given in the decree of sale."
After these rules were adopted, that is to say, at December Term 1841, the bill filed by Bronson as herein before mentioned came on för final hearing in the Circuit Court; and thereupon the complainant moved the Court for a final decree of strict foreclosure of said mortgage, or that the mortgaged premises should be sold to the highest bidder, without being subject to said rule and the act referred to. This motion was resisted on part of defendants, who moved that the decree should direct the sale according to gaid rule and act.
And the Judges being opposed in opinion on the following points, to wit:
1st. Whether the decree in this case should be so entered as to direct the sale of the said mortgaged premises according to the said statute of the State of Illinois above mentioned; or whether the same premises should be sold at public auction, to the highest bidder, without regard to the said law.
2nd. Whether the decree in this case shall or shall not direct the sale of the mortgaged premises, without being first valued by three householders, and without requiring two-thirds of the amount of the said valuation to be bid, according to the said act of the State of Illinois.
The interest not having been paid, Bronson on the 27th of March, 1841, filed his bill to foreclose the mortgage. In the meantime, after the mortgage was made and before the bill was filed, the Legislature of Illinois on the 19th of February, 1841, passed a law, the 8th section of which provided that mortgagors and judgment creditors should have the same right to redeem mortgaged premises sold by the decree of a Court of Chancery that had been given to the debtors 3rd. Whether the terms of the mortgage in this land judgment creditors by a previous law passed in case do or do not require it to be excepted from the 1825, in cases where lands were sold under execution. operation of the rule above recited. On motion of the The law of 1825, authorized the party, whose land complainant, it was ordered and directed that this should be sold by execution after that law took effect, cause, with said points, be certified to the Supreme to redeem them within twelve months from the Court, in pursuance of the act of Congress. day of sale, by repaying the purchase money And it is upon these questions, thus certified, that with interest at the rate of ten per cent; and if the debtor did not redeem within the time limited, any judgment creditor was authorized to do so upon the like terms within fifteen months from the sale. This act which took effect on the first day of May 1825, was held it seems not to extend to sales of mortgaged premises under a decree of foreclosure, and the
Jet of February 10th 1911 chorementioned
the case is now before us; and the 8th section of the act of February 19th, and the entire act of February 27th, are set forth at large in the record, as the laws referred to in the above mentioned rules of the Circuit Court.
The case has been submitted to the Court for decision by a written agreement between the counsel on both sides. On the part of the complamant a printed argument has been filed, but none has been offered on behalf of the defendant. As the case involves a constitutional question of great importance, we should have preferred a full argument at the Bar. But the parties are entitled by the rules of the Court to bring it before us in the manner they have adopted; and it being our duty to decide the questions certified to us by the Circuit Court, we have bestowed upon the subject the careful and deliberate consideration which its importance demands.
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 Soverignty, 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 harrassing 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 con venient than the old one, and may in some degree render the recovery of debts more tardy and difficult, Upon the points certified, the question is whether yet it will not follow that the law is unconstitutional the laws of Illinois of the 19th and the 27th of Febru- Whatever belongs merely to the remedy may be alary 1841, come within that clause of the 10th Section tered according to the will of the State, provided the of the 1st Article of the Constitution of the United alteration does not impair the obligation of the conStates which prohibits a state from passing a law im- tract. But if that effect is produced, it is immaterial pairing the obligation of contracts. whether it is done by acting on the remedy, or directly on the contract itself. In either case it is prohibited by the constitution.
The laws of a state regulating the process of its courts and prescribing the manner in which it shall be executed, of course do not bind the courts of the Uni This subject came before the Supreme Court in the ted States, whose proceedings must be governed by case of Green va. Biddle, decided in 1823 and rethe acts of Congress. The act of 1792, however, adop ported in Wheat. 1. It appears to have been twice ted the process used in the State courts, as it stood in elaborately argued by counsel on both sides, and de1789; and since then, the act of 1828 on the same sub liberately considered by the court. On the part of the ject, has been passed; and the third section of this Demandant in that case it was insisted that the laws law directs, that final process issued in judgments, and of Kentucky passed in 1797 and 1812 concerning ocdecrees in any of the courts of the United States, and cupying claimants of land impaired the obligation of the proceedings thereupon, shall be the same except the compact made with Virginia in 1789. On the other their style in each State respectively as were then hand it was contended that these laws only regulated used in the courts of such State; and authorises the the remedy and did not operate on the right to the courts of the United States, if they see fit in their lands.
discretion by rules of court so far to alter final In deciding the point the court say, "It is no answer process, as to conform the same to any change that the acts of Kentucky now in question are regula which might afterwards be adopted, by the Legislature tions of the remedy, and not of the right to the lands of the respective States for the State courts. Any If those acts so change the nature and extent of exacts of a State Legislature therefore, in relation to isting remedies, as materially to impair the rights and final process, passed since 1828, are of no torce in the interest of the owner, they are just as much a violacourts of the United States, unless adopted by rules tion of the compact, as if they directly overturned his of court according to the provisions of this act of rights and interests." And in the opinion delivered Congress. And although such State laws may have by the Court after the second argument the same rule been so adopted, yet they are inoperative and of no is reiterated in language equally strong (see pages 75, force if in conflict with the constitution or an act of 76 and 84). This judgement of the court is entitled Congress. to the more weight, because the opinion is stated in
As concerns the obligations of the contract upon the Report of the case to have been unanimous; and which this controversy has arisen, they depend upon Judge Washington who was the only member of the the laws of Illinois as they stood at the time the mort- Court absent at the first argument, delivered the opingage deed was executed. The money due was indeed ion on the second.
to be paid in New York. But the mortgage given to We concur entirely in the correctness of the rule secure the debt, was made in Illinois, for real proper- above stated. It is difficult perhaps to draw a line, ty situated in that State, and the rights which the that would be applicable in all cases, between legiti mortgagee acquired in the premises depended upon mate alterations of the remedy, and provisions which the laws of that State. In other words the existing in the form of remedy impair the right. But it is laws of Illinois created and defined the legal and equitable obligations of the mortgage contract. If the laws of the State passed afterwards had done nothing more than change the remedy upon contracts of this description, they would be liable to no constitutional objection. For undoubtedly 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
manifest that the obligation of the contract, and the rights of a party under it, may in effect, be destroyed by denying a remedy altogether, or may be seriously impaired by burthening the proceedings with new conditions and restrictions, so as to make the remedy hardly worth pursuing. And no one we presume would say that there is any substantial difference between a retrospective law declaring a particular contract or class of contracts to be abrogated and void; and one which took away all remedy to enforce them, or en cumbered it with conditions that rendered it useless or impracticable to pursue it. Blackstone in his commentaries on the laws on England, 1 vol 55, after having treated of the declaratory and directory parts of the law, defines the remedial in the following words
"The remedial part of the law is so necessary a consequence of the former two, that laws must be very vague and imperfect without it. For in vain would rights be declared, in vain directed to be observed, it there were no method of recovering and asserting those rights when wrongfully when we speak of the or invaded.This is what we mean properly when we protection of the law. When for instance the decla ratory part of the law has said that the field and inheritance which belonged to Titius's father is vested by his death in Titius; and the directory part has forbidden any one to enter on another's property without the leave of the owner; if Gaius after this will presume to take possession of the land, the remedial part of the law will then interpose its office; will make Gaius. restore the possession to Titius and also pay him da mages for the invasion."
We have quoted the entire paragraph because it shows in a few plain words, and illustrates by a familiar example, the connection of the remedy with the right. It is the part of the municipal law which pro. tects the right, and the obligation by which it enforces and maintains it. It is this protection which the clause in the contitution now in question mainly intended to secure. And it would be unjust to the memory of the distinguished men who framed it, to suppose that it was designed to protect a mere barren and abstract right, without any practical operation upon the business of life. It was undoubtedly adopted as a part of the constitution for a great and useful purpose. It was to maintain the integrity of contracts, and to Bocure their faithful execution throughout this Union by placing them under the protection of the constitution of the United States. And it would but ill become this Court under any circumstances, to depart from the plain meaning of the words used, and to sanction a distinction between the right and the remedy which would render this provision illusive and nugatory-mere words of form-affording no protection --and producing no practical result.
This brings us to examine the statutes of Illinois which have given rise to this controvery. As concerns the law of Feb. 19, 1841, it appears to the court not to act merely on the remedy, but directly upon the eontract itself, and to engraft upon it new conditions injurious and unjust to the mortgagee. It declares that although the mortgaged premises should be sold under the decree of the Court of Chancery, yet that the equitable estate of the mortgagor shall not be extinguished, but shall continue for 12 months after the sale; and it moreover gives a new and like estate which before had no existence, to the judgment creditor, to continue for fifteen months. If such rights may be added to the original contract, by subsequent legislation, it would be difficult to say at what point they must stop. An equitable interest in the premises may in like manner be conferred upon others, and the right to redeem may be so prolonged, as to deprive the mortgagee of the benefit of his security, by rendering the property unsaleable for any thing like its value. This law gives to the mortgagor and to the judgment creditor, an equitable estate in the premises, which neither of them would have been entitled to, under the original contract. And these new interests are directly and materially in conflict with those which the mortgagee acquired when the mortgage was made. Any such modification of a contract by subsequent legislation, against the consent of one of the parties, unquestionaimpairs its obligations, and is prohibited by the
We proceed to apply these principles to the case before us. According to the long settled rules of law and equity in all of the States whose jurisprudence has been modeled upon the principles of the Common Law, the legal title to the premises in question vest. ed in the complainant, upon the failure of the mort-bly gagor to comply with the conditions contained in the proviso. And at law he had a right to sue for and recover the land itself. But in equity this legal title is regarded as a trust estate to secure the payment of the money; and therefore when the debt is discharged, there is a resulting trust for the mortgagor. I. Peters 441. Conrad vs. The Atlantic Insurance Company. It is upon this construction of the contract that courts of equity lend their aid either to the mortgagor or mortgagee in order to enforce their respective rights. The Court will upon the application of the mortgagor direct the reconveyance of the property to him upon the payment of the money; and upon the application of the mortgagee it will order a sale of the property to discharge the debt. But as courts of equity follow the law, they acknowledge the legal title of the mortgagee, and rever deprive him of his rights at law until his debt is paid; and he is entitled to the aid of the Court to extinguish the equitable title of the mort. gagor, in order that he may obtain the benefit of his security. For this purpose it is his absolute and undoubted right under an ordinary mortgage deed, if the money is not paid at the appointed day, to go into the Court of Chancery and obtain its order for the sale of the whole mortgaged property (if the whole is necessary) free and discharged from the equitable interest of the mortgagor. This is his right by the law of the contract, and it is the duty of the Court to maintain and enforce it without any unreasonable delay.
When this contract was made, no statute had been passed by the State changing the rules of law or equity in relation to a contract of this kind. None such at least has been brought to the notice of the Court; and it must therefore be governed, and the rights of the parties under it measured, by the rules above sta ted. They were the laws of illinois at the time, and therefore entered into the contract and formed a part of it without any express stipulation to that effect in the deed. Thus for example there is no covenant in the instrument giving the mortgagor the right to redeem by paying the money after the day lunited in the deed, and before he was foreclosed by the decree of the Court of Chancery. Yet no one doubts his right or his remedy; for by the laws of the State then in force, this right and this remedy was a part of the law of the contract, without any express agreement of the parties. So also the rights of the mortgagee as known to the laws required no express stipulation to define or secure them. They were annexed to the contract at the time it was made, and formed a part of it, and any subsequent law impairing the rights thus acquired, impairs the obligation which the contract imposed.
The second point certified arises under the law of Feb. 27, 1841. The observations already made in relation to the other act apply with equal force to this. It is true that this law apparently acts upon the remedy and not directly upon the contract. Yet its effect is to deprive the party of his pre-existing right to foreclose the mortgage by a sale of the premises, and to impose upon him conditions which would frequently render any sale altogether impossible. And this law is still more objectionable because it is not a general one and prescribing the mode of selling mortgaged premises in all cases, but is confined to judgments rendered and contracts made prior to the 1st of May, 1841. The act was passed on the 27th of February in that year; and and it operates mainly on past contracts and not on future. If the contracts intended to be affected by it had been specifically enumerated in the law, and these conditions applied to them, while other contracts of the same description were to be enforced in the ordinary course of legal proceedings, no one would doubt that such a law was unconstitutional. Here a particular class of contracts is selected and incumbered with these new conditions. And it can make no difference in principle whether they are described by the names. of the parties or by the time at which they were made. In the case before us the conflict by these laws with the obligations of the contract is made the more evident by an express covenant contained in the instrument itself, whereby the mortgagee in default of payment was authorized to enter on the premises and sell them at public auction; and to retain out of the money thus raised the amount due, and to pay the overplus if any to the mortgagor. It is impossible to read this covenant and compare it with the laws now under consideration, without seeing that both of these acts materially interfere with the express agreement of the parties contained in this covenant. Yet the right here secured to the mortgagee is substantially nothing more than the right to sell, free and discharged of the equitable interest of Kinzie and wife, in order to obtain his money. Now at the time this deed was executed, the right to sell, free and discharged of the equitable estate of the mortgagor, was a part of every ordinary contract of mortgage in the state, without the aid of this express covenant. And the only difference between the right annexed by law and that given by the covenant consists in this that in the former case the right of sale must be exercised under the direction of the Court of Chancery upon such terms as it shall prescribe and the sale made by an agent of the Court; in the latter the sale is to be made by the party himself. But even under this covenant the sale made by the party is so far subject to the supervision of the Court, that it will be set aside and a new one ordered if reasonable notice is not given, or the proceedings be regarded in any respect as contrary to equity and justice. There is therefore in truth but little material difference between the rights of the mortgagee with or without this covenant. The dis