This appeal is perfected from a decision of the district court of Tulsa county refusing to issue a writ of mandamus to compel the court clerk of that county to issue a summons in a mortgage foreclosure action.
The parties appear in this court in the order of their appearance in the trial court, and will be referred to as plaintiff and defendant, respectively.
The mortgage foreclosure action was filed in the district court of Tulsa county on April 27, 1933. Plaintiff's petition was accompanied by a praecipe for summons requesting that the court clerk issue summons requiring the defendants to answer 20 days after the return date. The clerk of the court refused to issue summons in accordance with the praecipe, asserting that the return day should be fixed at 9 months from date of service. The plaintiff then applied to the district court of Tulsa county for a writ of mandamus to compel the defendant court clerk to issue a summons in the form requested by the praecipe. The defendant in his response urged that his refusal to act was justified by the provisions of Senate Bill No. 76 of the Fourteenth Legislature, commonly known as the Mortgage Moratorium Act" (Sess. Laws 1933, ch. 16). This act the plaintiff said was unconstitutional.
The decision of the trial court refusing to issue the writ declared section 1 of the act free from constitutional objections.
Several cases involving this legislative enactment are now before this court. They have been considered together and the briefs filed in all of them have been consulted in arriving at the conclusions herein announced.
The only questions involved relate to constitutional law. If section 1 of the act is valid, the defendant should prevail. If invalid, the writ should issue as requested by the plaintiff.
The act in question provides:
"Section 1. In all actions now pending in the courts of this state, for the foreclosure of mortgages or other liens upon real estate, where the answer of the defendant or defendants has not been filed, such defendant or defendants shall not be held to answer therein until the expiration of nine (9) months after the date of the service of summons upon the defendant who is the record owner of the real estate, at the time of the filing of suit upon which the mortgage or other lien is sought to be foreclosed, and
"In all actions hereafter filed in the courts of this state for the foreclosure of mortgages or other liens upon real estate, the defendant or defendants shall not be held to answer therein until the expiration *Page 211 of nine (9) months after the date of the service of summons upon the defendant who is the record owner of the property at the time of the filing of suit upon which the mortgage or other lien is sought to be foreclosed, and
"In all actions now pending in the courts of the state, for the foreclosure of mortgages or other liens upon real estate, in which the answer of defendant or defendants has already been filed, no trial shall be had, and no court of this state shall render judgment therein, until the expiration of nine (9) months after the passage and approval of this act, upon which the mortgage or other lien is sought to be foreclosed.
"Section 2. For a period of two (2) years from and after the approval of this act, the district judge, or the judge of the superior court of the county in which any real estate mortgage foreclosure of a deed of trust, or other instrument, the security of which is real estate, is hereby vested with the jurisdiction and discretion of granting a continuance of said cause, upon his own motion, or upon application of the owner of said property, in person, or by his attorney, and upon such terms and for such time as said judge may deem best.
"Section 3. The judge of said court shall continue said cause for such time as he may deem best, or when it may be made to appear to the court that:
"(First), The owner shall pay, at any time before confirmation of sale, the accruing interest and all taxes due upon said property; or:
"(Second), At any time before confirmation of sale, where the said owner shall pay or cause to be secured, a reasonable rental for the time or term which said judge shall order said cause to be continued; or:
"(Third), At any time before confirmation of sale, where it shall appear that the value of the property is sufficient to satisfy the lien, together with the cost, and the owner shall pay or otherwise secure the taxes due upon said land.
"Section 4. The court or judge of the district or superior courts or (sic) said state may appoint a receiver of said property, except when the same may be a homestead, to preserve, rent and operate said property, or to prevent waste, where the occupant thereof is wilfully injuring or destroying the improvements on any property sought to be foreclosed, and apply the receipts as the court may direct, during the time for which said cause is continued.
"Section 5. That whenever the record owner of the real estate, at the time of the passage and approval of this act, shall convey or transfer said property at any time hereafter, or in any way incumber the same without the written consent of the mortgagee the provisions of this act shall not apply. Provided, further, any attempt to waive or contract in violation of the provisions of this act are void and are without legal effect.
"Section 6. That the provisions of this act shall not operate to affect the liens or remedies to enforce said liens of labor, mechanic's or material lienholders existing upon the passage and approval of this act.
"Section 7. This act shall be and remain in full force and effect for a period of two (2) years, from and after the date of its passage and approval, at the expiration of which time it shall become inoperative and void.
"Section 8. The provisions of this act are severable, and if any clause, sentence, paragraph or section hereof shall be held void, the decision of the court shall not affect or impair any of the remaining portions or provisions of the act.
"Approved March 7, 1933. Emergency."
There are 9 sections contained in the bill, including the emergency clause.
Section 8 provides that the provisions of the act shall be severable, and that if any clause, sentence, paragraph, or section shall be held void, the decision shall not affect or impair any of the remaining portions or provisions of the act.
For the reasons hereinafter set forth, we hold that paragraphs 1, 2, and 3 of section 1 of said act are unconstitutional. We hold all the remaining portions of said act to be valid and constitutional when interpreted and applied as hereinafter set forth.
Let us analyze paragraphs 1, 2, and 3 of section I of said act. The first paragraph in effect provides that in all pending foreclosure actions, where the defendant has not answered, he may have nine months after the date of service of summons in which to file said answer. The existing statutes at the time of the execution of the mortgage in question provided for a period of 20 days in which to answer. Senate Bill 76, therefore, adds an extension of 8 months and 10 days for answer. The second paragraph of Senate Bill 76 provides that in foreclosure actions hereafter filed the defendant shall not be held to answer for a period of nine months from date of service of summons. This paragraph has virtually the same effect as the preceding one. The third paragraph provides that in all foreclosure cases pending, where the defendant's answer has already been filed, no trial shall be had and no judgment rendered until the expiration of nine months after the *Page 212 passage and approval of this act. The effect of these three paragraphs is to extend arbitrarily the term under which the mortgagee may foreclose his mortgage approximately nine months more than the statute provided at the time the contract was made. In other words, this legislative act, in effect, extends the due date of the mortgagor's note and mortgage approximately nine months beyond the contract date to pay.
It should be observed that the case at bar was commenced after Senate Bill No. 76 became effective. The effect of the act upon cases pending at the time it became effective is discussed and disposed of in the case of State ex rel. Osage Savings Loan Association v. Jesse J. Worten, District Judge, No. 24681, this day decided, 167 Okla. 187, 29 P.2d 1. In that case this court, speaking through Mr. Justice Andrews, held that in so far as the act under consideration undertakes to change the procedure in actions pending at the time of its enactment, it directly conflicts with section 54 of article 5 of the state Constitution. The effect of that decision is to totally annul paragraphs 1 and 3 of section 1 because they relate to actions pending at the time the act became effective. It also narrows our discussion to the constitutionality of the act as applied to actions commenced subsequent to the effective date of the act.
Partial invalidity of an act does not necessarily destroy the entire act. It is a familiar rule of law that an act of the Legislature, while invalid and inoperative as to one set of facts, may be constitutional and valid as to another and different state of facts. Consolidated Pipe Line Co. v. British American Oil Co., 163 Okla. 171, 21 P.2d 762. It is equally elementary that when an act contains a partial "invalidity clause", such as section 8 of the act in question, and one portion is determined to be invalid, a presumption arises that the Legislature would have enacted the valid portions, omitting the invalid provisions, if the act thus reformed remains operative as a law.
The plaintiff asserts that the remaining sections of the act, and especially paragraph 2 of section 1 of the act, violate the provisions of our Constitutions, state and national, relating to "impairment of the obligations of contract," or equal protection of the laws.
The defendant, while denying that these constitutional provisions are violated, urges that even though offensive to constitutional requirements, the act should be upheld as a fair and reasonable exercise of the police power. The contention of the defendant is that the entire act is justified without restrictive interpretation on the theory that in view of existing economic conditions, it is a just and reasonable exercise of the police powers of the sovereign state. This view embraces the idea that the power, when reasonably exercised by appropriate legislation, is not restricted by constitutional limitations, and may infringe upon rights guaranteed to citizens by specific provisions of our fundamental and basic law. A view is thus expressed which, pursued to its ultimate conclusions, vests in the Legislature the power, in emergency cases, to suspend the Constitution to the extent that that basic document appears to unreasonably restrict their power to legislate. It makes the Legislature the judge, in the first instance, of when such an emergency exists and to what extent it may reasonably go in suspending or overriding constitutional inhibitions.
This seems to be an extremely dangerous doctrine fraught with possibilities which may undermine the very foundation of American democracy.
We are unable to place the stamp of legal approval upon this view, and are firmly convinced that if the act in question is to be sustained in whole or in part, it must be done upon some theory that recognizes the continuing force and effect of constitutional provisions. In other words, only those portions of the act can stand which may be reconciled with the fundamental law of our land as announced in our Constitution.
While Constitutions should be liberally construed in order that the government, state and nation, may properly function, yet clear and express constitutional inhibitions must at all times be recognized by our agencies of government, legislative, executive, and judicial.
If it is the desire of the people that constitutional limitations be removed, a method has been provided in the Constitution itself to accomplish that result by amendment. This is true of both our national and state Constitutions. Of course, even though the necessary majority of the electorate desired to make such a change, it would require an interval of time to accomplish the result. But this in itself is generally conceded to be one of the salutary features of our constitutional form of government. It recognizes the fact that basic principles of government seldom change, and that a sufficient period of deliberation should be afforded before drastic changes in government are effected. This thought *Page 213 was emphasized by George Washington in his farewell address when he said:
"If in the opinion of the people, the distribution or modification of the constitutional powers be in any particular wrong, let it be corrected by an amendment in the way which the Constitution designates. But let there be no change by usurpation for though this, in one instance, may be the instrument of good, it is the customary weapon by which free governments are destroyed."
What, then, is this power which threatens to break down constitutional restraints imposed by a sovereign? While some courts have undertaken to define the power, most judicial bodies when confronted with the problem of its application have contented themselves with a general statement of its nature. Thus it has been said to extend to all regulations "reasonably necessary to secure the health, safety, good order, comfort or general welfare of the community." Atlantic Coast Line Railway Co. v. City of Goldsboro, 232 U.S. 548, 58 L.Ed. 721.
The decisions of the courts of last resort are filled with references to and discussions of this power, from which volumes might be compiled without exhausting the subject. Generally, in the last analysis, its scope and limitations must be determined by reference to judicial precedent, as is said in 6 R. C. L. p. 185:
"Since the limits of the police power of the state have never been defined with precision, and its boundary line cannot be determined by any general formula in advance, recourse has been had to the gradual process of judicial inclusion and exclusion. This gradual process of determining its limitations is due to the fact that it is easier to perceive and realize the existence of the police power, and to determine whether a particular case comes within the scope of the power, than to give a definition that will be applicable to all cases."
While judicial precedent is the principal light by which our path is illuminated, constitutional requirements must at all times be kept in mind to the end that individual rights may not be unjustly infringed upon. As Cooley on Constitutional Limitations states in his 8th Edition, at page 1233:
"But any accurate statement of the theory upon which the police power rests will render it apparent that a proper exercise of it by the state cannot come in conflict with the provisions of the Constitutions of the United States."
And as stated in 6 R. C. L. 195:
"While there are no precise limits to the police power, it is not, however, without its limitations, since it may not unreasonably invade private rights, or violate those rights which are guaranteed under either federal or state Constitutions."
And again in 6 R. C. L. 191:
"Each state has the power, therefore, to regulate the relative rights and duties of all persons, individuals, and corporations, within its jurisdiction, for the public convenience and the public good. The only limit to its exercise in the enactment of laws is that they shall not prove repugnant to the provisions of the state or national Constitution."
When the exercise of the police power affects existing contracts, how is it to be reconciled with the clauses in the federal and state Constitutions prohibiting the impairment of the obligation of contracts? Section 15 of art. 2 of our state Constitution provides:
"No bill of attainder, ex post facto law, nor any law impairing the obligation of contracts, shall ever be passed."
Likewise section ten (10) of art. (1) of the Constitution of the United States contains the following:
"No state shall * * * pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility."
What, then, are the obligations of contracts intended to be protected by the constitutional provisions above referred to? Do they refer only to the express terms of the contract? Or is the prohibition deemed to include likewise provisions of the law, including those prescribing procedure which were applicable to the contract at the time of its execution? The answer to these questions is concisely stated in Cooley's Constitutional Limitations (7th Ed.) p. 403:
"The obligation of a contract consists in its binding force on the party who makes it. This depends on the laws in existence when it is made; these are necessarily referred to in all contracts, and forming a part of them as the measure of the obligation to perform them by the one party, and the right acquired by the other. There can be no other standard by which to ascertain the extent of either, than that which the terms of the contract indicate, according to their settled legal meaning; when it becomes consummated, the law defines the duty and the right, compels one party to perform the thing contracted for, and gives the other a right to enforce the performance by the remedies then in force. If any subsequent law affect to diminish the duty or to impair the right, it necessarily bears *Page 214 on the obligation of the contract, in favor of one party, to the injury of the other. * * *"
Thus it appears that the procedural provisions existing in our state statutes at the time of the execution of the mortgage and note in question become, by the application of this rule, in effect a part of the contract, and any attempt to alter the same would be to that extent a change in the terms or obligations of the contract. In the portion of the text above mentioned the author was not considering the police power, nor the right to legislate in the exercise of that power, the fact that this was also a part of the existing law at the time of the execution of the contract. Thus the question is presented (and herein lies the gist of the legal problem involved) in the case at bar: Were not the laws of the state with reference to the police power also a part of the existing law at the time of the execution of the contract? We must answer in the affirmative. For if the procedural provisions of the law become a part of the contract on the theory that they were the existing laws at the time the contract was made, then likewise it would seem to logically follow that the legal provisions concerning the police power would also become a part of the contract. Cooley in his work on Constitutional Limitations (8th Ed.) p. 1237, referring to the police power, states:
"All contracts and all rights, it is declared, are subject to this power; and not only may regulations which affect them be established by the state, but all such regulations must be subject to change from time to time, as the general wellbeing of the community may require, or as the circumstances may change, or as experience may demonstrate the necessity."
And in 6 R. C. L. page 199, par. 195, in the article on Constitutional law, it is said:
"Hence it is that not all legislation which has the effect of impairing a contract is obnoxious to the constitutional prohibition as to impairment. Familiar instances of this principle are where parties enter into contracts, perfectly lawful at the time, to sell liquor, operate a brewery or distillery, or carry on a lottery, all of which are subject to impairment by a change of policy on the part of the state, prohibiting the establishment or continuance of such traffic; in other words, that parties, by entering into contracts, may not estop the Legislature from enacting laws intended for the public good. The authority of the Legislature, in the exercise of its police powers, cannot be limited or restricted by the provisions of contracts between individuals or corporations, or between individuals and municipal corporations."
In the case of Marcus Brown Holding Co. v. Feldman, 65 L.Ed. 877 (sometimes referred to as the New York rent case), it was said by the Supreme Court of the United States, referring to this power:
"But contracts are made subject to this exercise of the power of the state when otherwise justified." (Citing authorities.)
And in the case of C., R.I. P. Ry. Co. v. Taylor,79 Okla. 142, 192 P. 349, it was said in the syllabus, in referring to the police power:
"* * * All contracts are properly written and approved subject to its fair exercise."
Thus it may be seen that changes in the obligations of contracts may be made when made as a proper exercise of the police power, not because Constitutions may be suspended by police power, but because the right to legislate in the exercise of that power is a part of the existing law of the state at the time of the execution of the contract, and as such enters into the terms and provisions of the contract in the same manner that statutes prescribing procedure become a part of the contract.
It may be said that all property rights, including contracts, are subject to the proper exercise of the police power, and in that respect it is often said that individual rights to property, being subject to the exercise of this power, are qualified as distinguished from absolute.
Having arrived at this conclusion, the question of the constitutionality, in so far as it relates to the clauses concerning the obligation of contracts, now presents the narrower question: Is the subject-matter of the act in question within the proper field of the police power?
It is urged by some writers that our country is now undergoing a mild form of revolution in so far as our governmental tendencies to increase and extend the police power are concerned; that we are seeing only the beginning of the changes that will come to our form of government. This may be true. While our Constitution has been referred to as a real charter of liberty, "the most wonderful work ever struck off at any given time by the brain and purpose of man", still it is not perfect, and will be amended from time to time to meet changing conditions and demands of a fast changing civilization under more complex conditions than its writers ever dreamed of. But these changes must of necessity come slowly in a nation of widely scattered communities, between which there are scattered conflicting economic interests. Legislative *Page 215 acts in temporary emergencies directly in conflict with the Constitution, state and national, should not be the means of an indirect method of constitutional change. We have long realized that police regulations restricting or prohibiting the sale of intoxicating liquor might be enacted even though existing contracts (perfectly legal at the time of their execution) respecting the sale of those beverages might thereby be impaired or even nullified. Thus, likewise, appropriate legislative acts limiting, regulating or even prohibiting the drilling of oil wells in neighborhoods where a fire hazard might thereby be created, have been upheld by the courts, notwithstanding the effect of such legislation upon existing contracts.
Numerous other illustrations of the unquestionable use of this power might be called to mind. With few exceptions its use has been confined to legislation directly and ostensibly relating to public health, safety, and welfare, and the effect of such legislation upon existing contract was only incidental.
There is a vast difference and a vivid distinction between a police regulation enacted for the obvious purpose of preserving peace, health, or safety, which incidentally affects contracts or property rights on the one hand, and, on the other hand, alaw which is directly intended to change or alter contractualrelations between individuals in connection with contracts of aclass which have never been regarded as affecting the publicpeace or safety and morals of the community, in the hope that the change of such contractual relations may incidentally improve the economic welfare of the community.
The difficulty in this case is not in reconciling the right of the Legislature to exercise the police power through appropriate legislation with the constitutional provisions respecting the impairment of contracts, for the exercise of that power, as we have said, may be justified on the theory that the right to legislate within the proper field of the police power is a part of the existing law of the land at the time of the execution of the contract, and becomes as such a part of the contract. The real difficulty in this case is theextremely questionable right to extend the police power to theclass of contract under consideration.
Undertaking to use the police power to cure economic evils through the enactment of laws which benefit one class of persons by infringement upon the private contractual rights of another, is a dangerous tendency in our law. It finds little judicial sanction and can be justified only in the most extreme cases.
Modern decisions which are said to sanction this form of legislation include the recent case of Blaisdell v. Home Building Loan Ass'n (Minn.) 249 N.W. 334, wherein a "Moratorum Law" was upheld, and Block v. Hirsh, 65 L.Ed. (U. S.) 865; Brown v. Feldman, supra (rent cases by the Supreme Court of the United States.) The Minnesota case sustained a mortgage foreclosure act which authorized delay in foreclosure proceedings. The rent cases sustained acts which permitted tenants to hold over after their term had expired upon payment of a reasonable rental value. Detailed discussion of these cases will be omitted, since their effect can best be determined by reading the opinions therein.
In each of these cases the acts in question were justified by the court on the theory of an existing emergency. The defendant contends that Senate Bill No. 76 should be sustained on a similar theory because there now exists a great economic emergency, that it is both state and national; that great weight should be given to the act of the Legislature which finds the existence of such an emergency and which attempts relief thereof; that members of the Legislature come from every community of the state and from all walks of life and are familiar with conditions generally; that they have recognized the fact that thousands of people may lose their homes by reason of foreclosure, causing widespread want and suffering among the people, and that the provisions of the act are not unreasonable or arbitrary, and are not an unreasonable application of the police power reserved by the state.
We all must and do recognize the existence of this national economic emergency, or depression, which has prevailed throughout this nation for the past three years. While many may feel that the end of this emergency is in sight, and that normal and wholesome conditions will soon return when every man who desires to work may earn a living wage by honest toil, yet no one can say with absolute certainty when that end will come or when that condition will prevail.
In the meantime many homes burdened with mortgages are threatened with foreclosure and the present economic conditions prevent competitive bidding at foreclosure sales. On the other hand, many aged persons no longer able to perform gainful labor, *Page 216 who have invested their lifetime savings in a mortgage, are unable to collect the interest on their investment. These matters may be said to be more properly considered in determining the policy of the law, a question with which the courts seldom deal. Ordinarily, yes. In this situation, no. For we are asked to sustain this law only on the theory of an emergency, and certainly we are justified in considering every phase of the emergency, both pro and con.
Our strong inclination is to uphold any section of the statute in this present emergency, in order, as far as possible, to protect the equities of home owners and farm owners particularly as against those mortgagees who insist upon a strict observance of the letter of the mortgage contract.
In view of the gravity of the economic situation and its effect in preventing mortgagors meeting the full amount of the mortgage indebtedness on the due date thereof, and its further effect in destroying competitive bidding at foreclosure sales, and in view of the eminence of the authority which has approved such legislation, we have concluded that the situation is such as to warrant a temporary interference with contract rights through the enactment under the police power of appropriate legislation that does not violate constitutional provisions and in which proper provision is made for the protection of the rights of the mortgagee during the period of the delay. Provided, however, that such legislation is not designed to affect cases in which there is no occasion for the exercise of such extraordinary power. These requirements are but a recognition of the basic principle upon which the police power rests. It is said to rest principally upon the legal maxim, "Sic utere tuo ut alienum non laedas" [Cooley's Constitutional Limitations [8th Ed.] p. 1241; 6 R. C. L. 187], which interpreted means, "So use your own that you do not injure that of another."
Assuming, as we do, and must in order to justify the act, that there are a sufficient number of mortgages in which the property owners have been caught in the surge of economic depression in such a manner as to prevent payment of the mortgage on its due date to make the matter involved one of public concern in which the police power of the state may properly be invoked to prevent an unfair and unjust advantage being taken by mortgagees, we still must confine the operation and application of a law enacted for that purpose to the particular class of cases that justify its existence. As is said by Cooley's Constitutional Limitations (8th Ed.) at page 1231:
"A police measure must fairly tend to accomplish the purpose of its enactment, and must not go beyond the reasonable demands of the occasion."
If in this time of economic depression a mortgagee is seeking an unfair advantage of the mortgagor and forecloses the property because the mortgagor is temporarily unable to meet the obligation, a proper situation for the exercise of the police power may be said to exist, but the exercise of that power must and should be confined strictly to the class of cases that fall within the reason for the enactment of the law. Section 1 of the act in question and each of its three provisions are not so limited in their application, and by their terms they extend to cases in which there may be no necessity at all for an application of the police power of the state.
In all cases equitable requirements should be made for the preservation of the mortgaged premises, the payment of the current interest and taxes, and for appropriate protection of the property by insurance as well as such other requirements as may be proper and just under the circumstances.
The three subdivisions of section 1 each grant an arbitrary and capricious extension of time amounting to a taking of private property without any provision whatever for compensation to or protection of the rights of the mortgagee. In connection with this particular element of the law in question we call attention to the importance that has been attached thereto by the Minnesota court in the recent case of Blaisdell v. Home Building Loan Ass'n, No. 29165, supra, a case in which moratorium legislation enacted by a state Legislature was upheld and in connection with which another recent case involving the same subject-matter, State ex rel. Cleveringa v. Klein (N.D.) 49 N.W. 118, opinion filed June 12, 1933, was being considered and compared. We quote portions of the decisions touching upon the compensation feature:
"The rental value of the property must be applied upon the payment of taxes, insurance and the debt. The condition that the mortgagor or the one obtaining the extension to redeem must meanwhile pay the rental value of the property goes far to giving compensation for the extension secured. The relief appears to be no more than what must be regarded as reasonable and just. * * *
"We notice this difference between our *Page 217 law and that of North Dakota; the act of North Dakota extends the time of redemption unconditionally, while under our act the mortgagor, or the one who desires to avail himself of the extension, must pay the reasonable rental value of the property, during the period of extension, to the party holding the certificate of sale. It appears to us that this provision of our law may be held to provide compensation so that there is no taking of property without due process of law."
Mr. Chief Justice Wilson, specially concurring in the decision of the court in that case, states:
"This statute subjects the mortgagee to the rules of equity, but it also exacts equity, in turn, from the mortgagor as a condition under which he may have a longer time in which to redeem. If the mortgagor gets an extension of time in which to redeem, he is required to substantially protect the mortgagee from loss by reason thereof. * * *
"If it had provided no compensation or protection incident to the extension, I would have agreed to the conclusion reached by the North Dakota court. I would then think the application of the police power was unreasonable."
Likewise, in the famous rent cases decided by the Supreme Court of the United States by a bare majority of five to four we observe that the provision for the continued occupancy by tenants provided for the determination and payment of a fair compensation for the continued use of the property by the occupying renters. Block v. Hirsh, supra; Marcus Brown Holding Co. v. Feldman, supra. Of these same cases Mr. Justice Holmes, the author of the opinions, later said, in the case of Penn Coal Co. v. Mahon, 260 U.S. 293, 67 L.Ed. 322 (in referring to the rent cases), they "went to the very verge of the law." In the opinion in that case the learned justice likewise emphasized the importance of the compensation feature in the rent cases; he said:
"The late decisions upon laws dealing with the congestion of Washington and New York, caused by the war, dealt with laws intended to meet a temporary emergency and providing for compensation determined to be reasonable by an impartial board."
While compensation to private owners of property is not indispensable when the state is exercising its police powers in the ordinary and usual field thereof, it would seem that a different rule should obtain where legislation directly bearing on contractual relations between individuals is enacted in which relief is granted one class of individuals by changing contractual relations with another class. In such cases due process and equal protection of the laws would seem to require compensation and protection.
As is stated by the Supreme Court of the United States in the case of Holden v. Hardy, 169 U.S. 366, 42 L.Ed. 780:
"Recognizing the difficulty in defining, with exactness, the phrase, 'due process of law,' it is certain that these words imply a conformity with natural and inherent principles of justice, and forbid that one man's property, or right to property, shall be taken for the benefit of another, or for the benefit of the state, without compensation; and that no one shall be condemned in his person or property without an opportunity of being heard in his own defense."
And again in the case of Reagan v. Farmers' Loan Trust Co.,154 U.S. 362, 14 Sup. Ct. 1047, 38 L.Ed. 1014, Mr. Justice Brewer said:
"The equal protection of the laws, which, by the Fourteenth Amendment, no state can deny to the individual, forbids legislation, in whatever form it may be enacted, by which the property of one individual is, without compensation, wrested from him for the benefit of another, or of the public."
Likewise the provisions of section 1 have the practical effect of overriding section 6 of article 2 of our state Constitution, which provides:
"The courts of justice of the state shall be open to every person, and speedy and certain remedy afforded for every wrong and for every injury to person, property, or reputation, and right and justice shall be administered without sale, denial, delay, or prejudice."
The enlargement of time to answer to nine months is certainly a delay. In fact, it is a denial of judicial action for nine months. Certainly the mortgagee who seeks relief in a court is entitled under the most liberal interpretation of the police power to a judicial determination of whether or not the case presented by him is one of that class of cases to which a moratorium law should apply and to a reasonable protection and compensation during the period of delay. Thus, according to our views, section (1) of the act must fall for the reason that it goes beyond the reasonable necessities of the occasion and applies to cases which do not justify the application of the moratorium law, and for the further reason that it fails to provide for compensation to the mortgagee *Page 218 during the period of continuance thereby created.
The present case might be disposed of entirely on the invalidity of section 1 of the act. However, the validity of the remaining provisions of the act must be determined, and an early decision thereon is warranted. We, therefore, pass to a consideration of the remainder of the act.
As we have previously determined, the invalidity of a portion of the act does not necessarily render void the remaining sections thereof.
Sections 2 and 3 of the act, by their provisions, vest in the various district courts of the state the power to grant continuances during a period of two years from the date of the approval of the act under the terms of the condition set out in the act.
Some argument has been advanced that the power thus undertaken to be conferred is an arbitrary one which may be exercised by a judge or court with or without reason and without regard to the merits of the case. This asserted interpretation arises from the use in the act of the phrase, "as he may deem best," when reference is made to the power of the judge to grant a continuance. If this is the only proper interpretation of the provision, they are subject to the same objection which renders section I invalid, and we would not hold them unconstitutional. But we do not so interpret these provisions. They may be properly interpreted to vest in the district court the power to exercise judicial discretion in granting continuances on account of existing economic conditions in that class of cases only when (1) the owner shall pay at any time before confirmation of sale the accruing interest and all taxes due upon said property; (2) before confirmation of sale when the owner shall pay or cause to be secured a reasonable rental value for the time or term which said judge shall order said cause to be continued; (3) where before confirmation it shall appear that the value of the property is sufficient to satisfy the lien and costs of foreclosure, and the owner shall pay or otherwise secure taxes due upon said lands; or (4) when the district court in the exercise of sound judicial discretion shall make such other requirements as will reasonably compensate and adequately protect the mortgagee during the period of delay. Only when so interpreted these provisions may be upheld and applied by the trial courts. In order for the mortgagor in foreclosure proceedings to take advantage of these sections of the act, they must be applied by trial courts strictly. In the exercise of the judicial discretion thus conferred by the act, courts and judges must and do act judicially and must impose such conditions upon the relief granted mortgagors as will prevent the accumulation of tax liens, protect the property, and reasonably compensate the mortgagee during the interval of time during which the period of foreclosure is extended. Continuances shall only be granted by the trial court for such periods of time as in the exercise of judicial discretion shall be necessary to accomplish the purposes of the act. Interpreting the act in question in this manner, sections 2 and 3 may be sustained as a fair and reasonable exercise of the police power of the state.
The adoption of this interpretation of sections 2 and 3 of the act arises out of an application of the rule of statutory construction that when a statute is susceptible of two interpretations, one of which renders the same unconstitutional and invalid, the other rendering it valid, reasonable, and constitutional, the latter will be adopted by the courts.
Having sustained these sections on a particular theory of interpretation, it is essential that the future application of these sections be in accordance with that interpretation.
The power to grant a continuance in a proper case is not a power to be exercised by trial courts or judges as an appeal to cheap popularity, nor to enable them to exercise their judicial authority in accordance with personal whim. The alternative conditions set forth in the statute should be adhered to.
Section 4 of the act relates to the appointment of receivers and may be sustained upon the same reasoning that applies to sections 2 and 3. We do not, however, deem it necessary to consider the validity of that particular provision of section 4 which may be interpreted to prohibit the appointment of a receiver in a case where a homestead is involved which is unoccupied by the owner and in the possession of renters.
It is impossible at this time to anticipate all of the questions that may arise in connection with the application of sections 2, 3, and 4. Situations may, and no doubt will, arise to which these sections cannot be applied for some good legal reason. For instance, it remains to be determined whether or not the act is effective to extend the *Page 219 period during which the mortgagor may redeem beyond the date of sale. This and other questions of its kind must await decision until an appropriate occasion arises.
It should be mentioned, however, that though the emergency which justifies a portion of the act is more apparent in the case of homesteads than other property, the application of the act is not and need not be strictly confined to homesteads.
In arriving at the conclusion relative to the constitutionality of portions of the act, we feel that we have gone, to borrow the words of Justice Holmes, "to the verge of the law." The provisions of the act which are sustainable are properly so as a fair and reasonable exercise of the police power, not because that power may be exercised to suspend constitutional limitations, but because it, like the law relating to procedure, is a part of the law at the time the contract is executed and the provisions of the contract are therefore subject to its fair and reasonable exercise.
The police power of the state is limited, both by a rule of reason and by constitutional requirement, and while it may be extended to meet temporary emergencies, the extension of the power beyond its historic field must be scrupulously watched and carefully guarded.
An arbitrary interference with private contracts concerning a subject-matter not affecting the public peace, health, or safety cannot be justified. A discretionary power to grant continuances on mortgage foreclosure actions can only be exercised by imposing appropriate conditions for the protection of the rights of the mortgagee and rendering adequate compensation to him, even though the power thus conferred is created to meet an emergency situation. The decision of the trial court is reversed, with directions to proceed in accordance with the views herein announced.
RILEY, C. J., CULLISON, V. C. J., and ANDREWS and BAYLESS, JJ., concur.