18 Gratt. 244 | Va. | 1868
The questions that have been made in this ease, and discussed at such length, grow out of a deed of trust which the appellant gave on the 19th September, 1860, on his house and lot in the city of Richmond, then recently purchased and conveyed to him by deed of the same date, to secure the unpaid purchase money, for which he had executed ten negotiable notes, falling due at successive intervals of six months, and thus extending from March the 22d, 1861, to September 22d, 1865. The first four of these notes were paid; the remaining six were passed in January, 1862, for value to the appellee Franklin Stearns, who afterwards, in view of the rapid depreciation of the Confederate currency, refrained from any demand of payment till the restoration of Federal authority, and the consequent return of Federal money.
On the 4th of June, 1866, the defendants filed their several answers; the trustees denying for themselves any knowledge of the allegations of the bill, and all interest in the suit, except as mere trustees; and the appellee Stearns, responding to what he terms “ the only material allegation in the bill, namely, the act of the General Assembly forbidding sales under trust deeds until the 1st of January, 1868, takes issue upon that law as void under the constitution of Virginia and the constitution of the United States. Previous to the filing of these answers, to wit, on the 2d June, 1866, a motion was first made to dissolve ; and was successively continued till the final hearing on the 17th day of January, 1867, which resulted in the dissolution of the injunction and the dismission of the bill. But, in the meantime, when the answers were filed
I have been thus minute and explicit in tracing the successive stages of this cause that I might more clearly dispose of two preliminary objections to this decree, that seem to have been advanced for the first time in this court. The first of these is predicated of the fact that the court had possession of the case simply on the motion to dissolve, and overlooks the prior and material entry, by which the plaintiff had set down the cause for hearing. But if it be conceded that there is a defect of clerical form and regularity, in which this prior entry has been ignored, and the cause brought on apparently to a hearing on a motion to dissolve, it is assuredly such a matter as it behooved the party affected thereby to notice in the court below, where it admitted of easy correction, and is not an error of substance, to be availed of on appeal.
The second of these objections applies to the lack of explicitness in the terms of the advertisement; and we are asked to view it now in the light of authorities upon the invalidity of sales made in disregard of the terms of the power. But it is a sufficient answer to say that no such question or issue has been made in this case. This advertisement is made an exhibit with the bill; no intimation of its insufficiency or illegality escapes the complainant; he does not allege there, as he now does here, that the advertisement should state the notes and the amounts due, so as to notify and prepare bidders for the sale. The bill itself discloses his full knowledge on that subject, and his ability to protect himself and his friends from being ensnared by the vagueness of the notice. It is, therefore, too late to start this objection for the first time in this court. However such an objection might weigh in the event of a sale and actual damage resulting from an
Having thus disposed of these assignments of error, we are brought to the investigation of the single question in this cause. On this alone it was argued, heard and decided below. Ho excuse, however ingeniously suggested, exists to avoid it here. It must be met under the pleadings and the decree. It is a question of magnitude, not only because of its consequences to the parties and its bearings upon the community at large, but more especially because of the delicate and responsible nature of the function required of this court. True, it is not a question of dimensions corresponding with the extensive range of the argument. It has been discussed as if involving all the provisions of the act of March 2, 1866. Ho special attention was given to the particular clause of the act embracing sales under deeds of trust; nor any enquiry made to distinguish it from the suspension of judicial process under the same act. Both in the argument here, and the opinion of the court below, these provisions of the act were, for the most part,.confounded, and assumed to rest dpon the same ground; or, at any rate, if the discrimination was incidentally suggested, it was not developed with that clearness and precision to display the impropriety or avoid the necessity of pronouncing on the constitutionality of the whole law. Had more attention been paid to this distinction, and greater pains taken to treat this particular enactment separately and apart from other parts of the statute not involved in this controversy, I venture to suggest it would have greatly abridged the argument, and
Our enquiries must, therefore, be confined to that clause of the statute forbidding sales under deeds of trust until the 1st of January, 1868, which period was extended by a subsequent act to the 1st of January, 1869. This throws out of our consideration the vexed question of the authority of the Legislature over judicial process and remedies to enforce contracts, and will limit our investigations to the plainer doctrine of legislative action upon the obligation, as contra-distinguished from the remedy arising out of contracts. This position, however, I shall seek to put in a clearer light in a subsequent part of this investigation; for the present, I desire to preclude all or any expectation of my being betrayed into any opinion upon such parts of this statute as are in no wise involved in this controversy; and to express my belief that a satisfactory decision of this cause can be reached without embarrassing ourselves with the intricate and conflicting views to which I have alluded, and without undertaking to decide the constitutionality or unconstitutionality of the whole statute.
It has been remarked upon as a curious circumstance, that the framers of the constitution, in laying down barriers against legislative invasions of private rights, should have omitted to provide any positive guara.ntee or specific protection; should have attached no sanction or penalty.
These considerations are much enhanced in this case by the caution and deliberation which marked the passage of this act. If any part of it be repugnant to those constitutions, which the members of the Assembly as well as ourselves are bound to observe, it was because of no inadvertence on their part, nor of any failure to examine the grave challenge of their competency in the premises. The able and ingenious reports by which this law was advocated, proceeded from a committee comprising the highest legal talent of the State, and who advanced a new theory for the justification of the law. The preamble of the act itself attests the direct and special consideration which the Assembly gave to the questions we are about to examine. It recites, that “ while this General Assembly recognize their imperative duty to respect and obey the constitutional provisions which prohibit the enactment of any law impairing the obligation of contracts, they believe that, when construed with reference to the objects of those provisions, and in the light of principles recognized and acted upon by the courts of justice at the time of the adoption of the constitution of the United States, as well as before and since that time, those provisions do not forbid them from granting a temporary suspension of remedies in such a state of things as the present, in order to prevent the cruel and ruinous results which would ensue without such interposition, and especially as it only requires that creditors, while their right to ultimate payment is held inviolable, shall submit to a course to which they might well he constrained by the instincts of natural justice and humanity.”
No doubt, therefore, exists that the Assembly duly con
The first step in our enquiries should be, to acquire a clear and definite idea of the constitutional prohibition. Its insertion in the constitution of the United States was to preserve a uniform sanctity of contracts in all the States. How it came, in almost the same language, to find a place in the State constitutions is not so clear. It appears in the Federal constitution as a restriction upon the States, which would seem to supersede the necessity of a similar provision by the States. But doubtless the principle had been canonized as a fundamental guarantee of private rights, and along with the interdict upon bills of attainder and ex post facto laws been ranged among the indisputable maxims of individual right and liberty, and the essential barrier for their protection against the invasions of the Legislature. It was first introduced into the constitution of this State at its revision and amendment in 1829-30, and was reported among the provisions of the legislative department by Mr. Madison, who had borne so conspicuous a part in the formation and adoption of the Federal constitution. Our constitution, as well as1 the constitutions of a large majority of the States, adopts the language of the constitution of the United States, namely, ‘•‘■any law impairing the obligation of contracts.” In Ohio, Indiana and Illinois, the term “ obligation ” is substituted by “ validity,” and in Kentucky and Penn
Let us now advance another step in this enquiry, and consider what is meant by the term 11 impairing." To this end, it will be useful to advert briefly to the history of this constitutional provision, and, the mischiefs which led to it. In reply to the question, what were the laws in the mind of the framers of this provision ? Judge Marshall (Sturges v. Crowninshield, 4 Wheat. R. 122, 204,) said: “ They were such as grew out of the general distress following the war. Paper money was issued; worthless lands and other property of no use to the creditor were made a tender, and the time of payment stipulated in the contract was extended by law." In his Life of Washington, the state of parties upon these measures is thus graphically sketched: “ The discontents and uneasiness arising, in a great measure, from the embarrassments
This contemporaneous history of the legislation out of which this restriction grew, and these declarations of framers of the constitution, conclusively prove that this clause was designed to interdict to the States all legislative interference with contracts, such as had so disastrously relaxed the morals, interrupted the commerce, and disturbed the harmony of the States. For obvious reasons, no attempt was made to enumerate cases within this prohibition ; but its terms were so comprehensive as clearly to embrace the antecedent mischiefs, to which it was specially directed, as well as to provide against future evils of the same kind. The Supreme Court of the United States has, in a long series of decisions, announced their conclusion “ that any law which enlarges, abridges or in any manner changes the intentions of the parties, resulting from the stipulations in the contract, necessarily impairs it. The manner or degree in which this change is effected can in no respect influence the conclusion; for whether the law affect the validity, the construction, the duration, the discharge or the evidence of the contract, it impairs the obligation, though it may not do so to the same extent in all the supposed cases. Any deviation from its terms by postponing or accelerating the period of performance which it prescribes; imposing conditions not expressed in the contract; or dispensing with the performance of those which are a part of the contract, however minute or apparently immaterial in their effect, impairs its obligation.” Ogden v. Saunders, 12 Wheat. R. 213, 327; Green v. Biddle, 8 Wheat. R. 1, 84, In some of the judicial expositions of this clause, it is to be regretted
The final term of this prohibitory clause requires neither explanation nor comment. The meaning of “ contractis well understood, and is not open to disputation. It is only necessary to add, that it applies to all contracts, whether verbal or written, express or implied, executory or executed, whether between individuals, corporations, States and individuals, or between separate States. It may as well exist in the form of a grant, public or private, as of mutual undertakings. Whatsoever its character may be, it is secure from all legislative control or modification; and the public faith is solemnly pledged, under all circumstances and in spite of all temptations, to uphold its integrity.
In these comments on this clause of the constitution, I have ventured on no principle which is not conceded in all the cases in which this restriction has been judicially considered. I am not aware of any authority against the positions I have taken; nor have I so far run counter, in any respect, to the common concessions of the opposing
At an early period it met with some resistance from the court and the bar, though feeble and ineffectual. It was deprecated as an engine of oppression in the hands of the creditor. It was denounced as a pocket-judgment. Where the creditor was trustee, it lost its peculiar character, and was treated as a mortgage. Upon the false assumption that the trustee was but the agent of the creditor, it was urged in argument upon the court in the case of Moss v. Norvell, 3 Munf. 170, that deeds of trust were nothing but mortgages, and could only be enforced by bill in equity. But this pretension of counsel seems to have received no countenance from the court. It is now a favorite security for the payment of money, closely interwoven with the transactions of business, and firmly established by the practice of the country and the sanction of the courts. It has, doubtless, aided credit, facilitated the collection of debts, and saved to the debtor the costs of legal proceedings. But if its convenience and advantages were less, and its evils overweighed theSe, there would be nothing in such considerations to loosen the bonds which the debtor has chosen to put upon himself. It is eminently a self-executing contract. All the instrumentalities are appointed by it for its final discharge according to the declared intentions of the parties. The deed now before us is Taylor’s contract that, upon default, a sale of his
Here, by the special terms of the deed, and according to the intention of the parties, the sale should have taken place as advertised, on the 4th May, 1866; but the law steps in and postpones it by one act to 1st January, 1868, and by another to 1st January, 1869. Does not this intervention plainly defeat the agreement of the parties and the obligation of the contract ? It was admitted in argument, that if the Legislature had undertaken to protract the maturity of the notes and the happening of the default, it would have been a usurpation of authority and an infraction of the constitution ; is it less so when the law arrests the parties, and withholds them, or either of them, from reaping the fruits of their agreement for a sale ? If a material stipulation be defeated, it surely could not be said with any plausibility that the obliga
I have thus endeavored to show that this case is a peculiar one, does not involve the intricate doctrine relating to . ... . ° legislative changes of judicial proceedings and processes, mesne and final, and should be decided by a practical interpretation of the constitution, and the ordinary rules of reasoning. The authority of adjudicated cases can only be brought to our aid through analogy, and the application of the reasonings employed in them. Nevertheless, it is well to examine how far the positions I have taken are fortified by authority. The case of Pool v. Young, 7 Monr. R. 588, is very pertinent to this case. It was there made a question, whether the relief laws of Kentucky, giving an indulgence of two years unless bank paper was received in payment, and forbidding a sale for less than three-fourths of the appraised value, could defeat the stipulations of a prior mortgage, empowering the mortgagee, on default of payment, to sell the estate for ready money; and it was held that the chancellor was bound to specifically enforce the contract by a sale for cash in hand, whether those statutes were regarded as constitutional or not; and further, that such ■ stipulations of the parties fixing the remedy for a breach of their contract must govern the chancellor as the law of the case. The reasoning of the court is so apposite to our present investigations, that I cannot refrain from submitting the following copious extract from it: “ If this case was not one peculiarly circumstanced, (as it really is,) it would be sufficient for us to refer to the cases of Lapsley v. Brashear and Blair v. Williams, 4 Litt. R. 34-47, to prove that, according to the settled course of decision in this court, the plaintiff in error would not be entitled to the credit of two years secured by the act of Assembly, because that the act in this respect is in contravention of
This extract demonstrates that that case is an authority directly in point, and was decided by the course of reasoning which I have pursued. Applying its doctrine here, I am authorized to contend that this act of March 2,1866, makes a virtual interpolation in the contract, by which it adds a new condition, suspending the sale beyond the period of default as fixed by the parties.
I have also found another case, very closely approximating this, as far as I can judge by the abstracts of it. I regret I have not access to the report of it, and must content myself with a brief statement of it, as derived from treatises upon this subject. It is a decision from Pennsylvania, and is thus quoted in the American Law Register 1868-4, N. S. p. 107: “ Where the parties to a
It seems to me that the parties here, by agreeing upon agencies exterior to the courts for final satisfaction, as effectually precluded any interference therewith by law as if they had expressly bound themselves not to take advantage of any subsequent legislation in conflict with their express understanding. The case would not be at all stronger if the parties, by reference to past or anticipated legislation, had stipulated that it should in no wise affect their agreement. They had a constitutional guarantee for the exemption of their contract from legislative infraction; and a positive covenant on their part to that end would have been merely supererogatory, and would have imparted no additional sanction to the contract. It is on this ground I invoke the authority of that case to sustain the
In seeking for a practical test to ascertain whether a law pertains to the remedy or obligation of a contract, I have not found a better one than is furnished in- a case cited and relied on by the appellant’s counsel—Morse v. Goold & als., 1 Ken. R. 281. In that case, an act exempting certain property from sale on execution for debts contracted prior to its passage, was held to be con* stitutional because it .modifies the remedy, and neither destroys it nor substantially impairs its efiiciency. Denio, J., in delivering the opinion of the court, points to this as a guide to determine the action of the law upon the obligation : “ The most obvious method by which a contract may be impaired by legislation would be the alteration of some of its terms or provisions, so that, assuming the validity of the law, the parties would be relieved from something which they had contracted to do, or would be obliged to do something which the contract did not originally require.” Adopting this test, is there any question that Taylor is relieved by this law from the sale of his property, for which he • had covenanted, and Gregory’s assignee obliged to wait for his money beyond the time agreed upon?
The deed of 'trust, as I have shown, is so peculiar to this State that the foregoing are the most striking illus
There was a peculiar feature in this mortgage, whereby the mortgagee, on 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. This might seem to approach more nearly to the case of our trust deed; but inasmuch as a court of equity would view with jealousy the action of the creditor in such a position, and intervene on a reasonable pretext to restrain him from damaging his debtor, this feature of the contract was only incidentally noticed. It is thus treated in the opinion of the court: “ In the case before us, the conflict of 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. The difference between the right annexed by
The principle of this decision was extended to the case of an execution in McCracken v. Hayward, 2 How. U. S. R. 608. It was decided in that case, that a law of Illinois, forbidding a sale under execution unless the property brought two-thirds of its valuation according to the opinion of three householders, was unconstitutional and void. These two cases have been followed and approved by a
I have thus reviewed and cited the ■ leading decisions, Federal and State, upon the doctrines I have been discussing, and I cannot but regard that the decided weight of authority is on the side of the appellee in this controversy. But another view of this subject has been submitted in the two reports of the House Committee of Courts of Justice, one of which constitutes a part of this record; and the other was given us in the argument. They are an authoritative exposition of the views of the
Secondly—It is not true, that because the courts can administer such relief in certain prescribed cases, the Legislature can be justified by the analogy to assume a wider range by law. It would seem that the fact that the courts can relieve in such cases, instead of justifying the Legislature in such a questionable policy, would be a strong motive to restrain such legislation. Inasmuch as some of these cases of hardship are relievable by the courts, the mischief apprehended by the law-makers would, to that extent, be abridged. But the judicial and legisla
Thirdly—It cannot he said, with propriety, “ that the Legislature may, where the necessity for such interference exists, do broadcast what courts do in individual cases." The very contrary is true. If the assertion was narrowed to the claim to compass by law what courts do in individual cases, the most careless enquirer would be startled by such a pretension, and by the actual obliteration it occasions, of the dividing line between these departments of the government. But the offence is greater when this pretension is so enlarged as to embrace the alleged power to “ do broadcast what the courts do in individual, eases." It might seem enough to object that the action of the Legislature can never correspond with the action of the courts. The latter act in modes unknown to the former; and it would he highly improper, if not a usurpation, for the Legislature to attempt to do wThat “ the courts do in individual cases.” But what propriety is there in saying that the Assembly is doing only broadcast by a universal suspension of remedies what the courts do in specified instances ? In the one case, relief is given because of peculiar circumstances, which will not allow a mere literal fulfilment of a contract to the oppression of one party, and against the presumed pretensions of both; and in the other, no attention is bestowed upon such circumstances but a broadcast dispensation, given to all for a limited time from the obligation of their contracts. Bor these reasons, I find myself unable to concur with the committee in their conclusions, so far as they involve the limited enquiry I have made into this particular provision affecting sales under deeds of trust.
The other judges concurred in the opinion of Rives, J.
Decree aeeirmed.