Dennis v. Moses

Reavis, J.,

(dissenting).—I cannot assent to several conclusions announced by the majority of the court in this case, and the importance of the questions involved requires further discussion. The question whether an appraisement of real estate provided for in the act of March 10, 1897 • (Laws 1897, p. 70, Bal. Code, § 5273 et seq.), relating to the sale of property under execution is applicable to mortgages was decided in the case of Swinburne v. Mills, 17 Wash. 611 (50 Pac. 189), and mortgages were there held to be included within the terms of the act. Upon complete consideration we are all agreed that the conclusion heretofore reached was correct. This litigation arises in the construction of the mortgage in suit, which contains among its stipulations upon the part of the mortgagor an express waiver of the law relating to appraisement and time of sale; also the act of March 16, 1897 (Laws 1897, p. 227, Bal. Code, '§ 5299), declaring the mortgagor- entitled to the possession and rents, issues and profits of real property sold under foreclosure during the full period for the redemption of the same; also the act of March 11, 1897 (Laws 1897, p. 98, Bal. Code, § 5888a), prohibiting a deficiency judgment in mortgage foreclosures; also the act relating to the construction of contracts between- parties for attorneys’ fees; and also the act of March 11, 1897 (Laws 1897, p. 91, Bal. Code, §§ 3665-3667), relating to payment of obligations, and declaring that 'the same may be fully satisfied with any kind of lawful money or currency of the United States. I understand the conclusion of the majority is that the waivers contained in the stipulations of the mortgage are void and cannot be enforced, but, as there is some intimation that a different state of facts *584from those found in the present cause might vest in the court the consideration of the enforcibility of some of the waivers, I desire to make some observations upon this question. The learned counsel for the plaintiff contend that the provisions relating to appraisement and to possession, and the rents, issues and profits in the legislation of 1897 do not in terms prohibit the waiver; that, being solely for the benefit of the debtor, he may lawfully waive the same; that such contract of waiver is enforcible in the courts, and that public policy does not concern itself with those provisions intended merely for the benefit of the debtor. I have examined every case cited upon this proposition in the briefs submitted by counsel. Stockmeyer v. Tobin, 139 U. S. 176 (11 Sup. Ct. 504), was first determined in the state of Louisiana, and the supreme court of the United States merely accepted the construction of the state supreme court in Broadwell v. Rodrigues, 18 La. An. 68, and its ruling in that case is not authority here in any sense, because the uniform rule in the federal supreme court is to accept the construction of a state statute by the court of last resort of the state without reference to the correctness of such construction. As the Louisiana case just mentioned and also New Orleans Mutual Ins. Co. v. Bagley, 19 La. An. 89, are cases presented where the waiver of an inquisition or appraisement law has been held a valid contract, it is instructive to review the reasoning of the Louisiana court in an earlier case, Levicks v. Walker, 15 La. An. 245 (77 Am. Dec. 187). The court there held such a waiver void, and observed:

“Parties regulate their own conduct by their stipulations, but they cannot prescribe rules of proceeding for public officers, nor demand that the courts of justice shall depart from tbe usual modes of enforcing their decrees. If, before judgment, the creditor may stipulate the manner in which the same shall be executed, the principle will *585sanction an endless variety of modes of execution of judgments.”

But in the case of Broadwell v. Rodrigues, supra, the court again had brought before it the question of waiver in connection with the construction of section 2 of article 11 of the civil code of Louisiana, which had not been before them in the former case. Construing this section of the code, the court said:

“ The law of France, in its practical application, differs but little from the law of Louisiana, and both rest on the maxim of the Koman law, which lays it down as a rule that every one is at liberty to renounce what the law has established in his favor and interests but himself.
“Est regula juris antiqui omnes licentiam habere his quae pro se indicia sunt renunciare. L. 29, G. de Pactis. But individuals cannot by their conventions derogate from the force of laws made for the preservation of public order or good morals. I. G. de Pactis, 2; 3 L. J/R, §§ <ie R. T. L. 38, §§ de Pactis, 2, 1J¡-.
“Marcedé, commenting on the last rule cited observes: * Get article en nous disant qu’on ne peut par convention d'eroger auz lois dont il parle, nous indigne assez qu’on pourra, par a moyen, d’eroger aux autres.’ Vol. 1, p. 671. And the jurisconsults who compiled our Code, while they adopted verbatim, the article 6 of the French Code, in the article 11 of our own Code, have added to that article a second paragraph which is a legislative recognition of Marcade’s doctrine, and has removed much of the uncertainty of the French article. (See, also, the doctrine of Toullier, hereinafter referred to.)
“ The second paragraph of article 11 of our Code, is as follows: ‘But, in all cases in which it is not expressly or impliedly prohibited, individuals can renounce what the law has established in their favor, when the renunciation -does not affect the right of others, and is not contrary to the public good.’ ”

The court then says:

“ Aided by the light which the French jurists have af*586forded us in solving this mooted queston, . . . this we apprehend to he the general rule, as relates to the renunciation of private rights. The exceptional cases are those which trench on public order; and, within those exceptional cases, is not embraced, as we conceive, the stipulation in the mortgage granted by the plaintiff in injunction.”

It will thus be seen that the present Louisiana doctrine does not in any sense overturn the principle first declared in 15 La. An., supra, but is founded on a provision of' the Louisiana statute, which had theretofore been construed by the Trench jurists, and such construction was accepted by the court. I do not therefore think the cases cited from Louisiana are authority upon the construction of the statutes under consideration here.

The case of Stockwell v. Byrne, 22 Ind. 6, is founded entirely upon estoppel of the judgment debtor who consented that an officer having charge of a writ of execution should sell without appraisement, and the court held such estoppel good. The case of Baker v. Roberts, 14 Ind. 552, was a suit on a promissory note containing a waiver of valuation laws, and the decision was based upon a statute which declared:

Upon any instrument of writing, made in this state or elsewhere, containing a promise to pay money without relief from valuation laws, judgment shall be rendered and execution had accordingly.”

It will be noted that the Indiana cases cannot be in point because special statutory permission authorizes the waiver of valuation laws. The case of Wray v. Miller, 20 Pa. St. 115, was where the defendant was held estopped by a waiver after sale. The sale was made without dissent and the opinion states the presumption was that defendant received the purchase money. In Mitchell v. Freedley, 10 Pa. St. 198, the defendants had estopped themselves after judgment and sale had been made. Thus the Pennsylvania *587cases are not in point, but it may be appropriately observed here that the courts of Pennsylvania stand almost alone in their construction of homestead and other exemption laws, and against the almost universal weight of authority in this country. But a Pennsylvania statute of 1836 seemed to authorize the waiver of inquisition or appraisement. On the validity of a waiver of the right to possession, several Iowa cases were cited, but I find in the last of those cases cited the decision based upon the Iowa Code of 1873, section 1938, which declares in the absence of stipulation to the contrary the mortgagor of real property retains the • legal title and right of possession thereto. Manifestly the statute of Iowa determines conclusively the construction of such contracts for waiver of the right to possession.

It is a well recognized legal rule that constitutional or statutory benefits may be waived unless such waiver violates some principle of public policy. A number of the states, among which are Pennsylvania, Indiana, Louisiana, Iowa, Kansas, Nebraska and Illinois, in their early history adopted what have been very pertinently termed appraisement or valuation laws. Every authority from those states, both in the state and federal courts, has sustained the validity of these laws when applied to subsequent contracts. Having thus reviewed the authorities presented by counsel to sustain the validity of a contract of waiver of appraisement and found that in no instance other than when authorized by statute such waiver was enforced, we may now examine some of the numerous and very eminent authorities which hold that analogous provisions in other laws cannot be waived by private stipulation. Our statutes, it may be mentioned, nowhere authorize a waiver of any of the provisions of the laws under consideration.

Wall v. Equitable Life Assur. Society, 32 Fed. 273, was an action on an insurance policy in the United States cir*588cuit court. It involved the question as to the force to be given to a Missouri statute as against tbe express language of the policy. Tbe court by Judge Brewer declared:

“ It evidently intended by its (tbe state’s) legislation to provide a fixed and absolute rule applicable to all cases —absolute and universal, because if it applied only in cases in wbicb tbe policies were silent, or if it could be waived or changed, a child can see that it would protect only so far as tbe insurance companies were willing. So, although no words of penalty are attached, no express denial of tbe right to waive, in fact no words of negation in any direction, yet it seems to me fair to say that tbe affirma.tive language of this statute discloses a public policy, wbicb no court ought to question or refuse to enforce. . . . Tbe legislature has by this language declared a rule in respect to forfeitures in life insurance policies; it has thus established tbe policy wbicb it believes should obtain in this state, and, though sitting on tbe federal bench, it is my duty to administer tbe laws of this state in tbe spirit in wbicb they were enacted, and to uphold both their letter and their spirit.”

This doctrine is also approved by the supreme court of the United States in Society v. Clements, 140 U. S. 226 (11 Sup. Ct. 822), and other cases in that court. State v. Edwards, 86 Me. 102 (29 Atl. 947, 41 Am. St. Rep. 528); Havens v. Germania Fire Ins. Co., 123 Mo. 416 (45 Am. St. Rep. 570, 27 S. W. 718); Reilly v. Franklin Ins. Co., 43 Wis. 449 (28 Am. Rep. 552). In the last case the court says:

Bow the law is well settled, that where a statute is founded upon public policy, a party cannot waive its provisions even by express contract.”

In the case of Minneapolis Threshing Machine Co. v. Beck, 95 Iowa, 725 (63 B. W. 637), it was held that:

Under Code, § 3100, providing that ‘ personal property levied upon and advertised for sale on execution must be *589appraised before sale/ etc., such appraisement cannot be waived.
Though it was stipulated in a chattel mortgage that the mortgagor waived appraisement, and the mortgagee was present at the foreclosure sale, the mortgagee is not precluded from moving to set aside the sale on the ground that there was no appraisement, as is required by statute.”

The case of Latimer v. Equitable Loan & Inv. Co., 81 Fed. 776, involved the right of withdrawal of a stockholder in a building association after giving thirty days’ notice thereof, and to receive back the amount paid in by him together with his shares of the profits. The court held:

“ The statutory right of a stockholder in a building association to withdraw therefrom after giving 30 days’ notice, and to receive back the amount paid in by him, together with his share of the profits (Rev. St. Mo. § 2810), is one evidencing a public policy, and cannot be waived, even by an express declaration in the certificates that there shall be no right of withdrawal until 100 months from the issuance of the stock.”

A strong analogy is also found in the uniform rule that the equity of redemption cannot be waived in a mortgage or in any other instrument executed at the same time. This has been the settled law for over two centuries in English and American courts. The supreme court of the Unites States in Peugh, v. Davis, 96 U. S. 332, discussing the waiver of the equity of redemption, said: *590undoubtedly be made to tbe mortgagee. There is nothing in the policy of the law which forbids the transfer to him of the debtor’s interest. The transaction will, however, be closely scrutinized so as. to prevent any oppression of the debtor.” Teal v. Walker, 111 U. S. 242 (4 Sup. Ct. 420).

*589“ This right cannot be waived or abandoned by any stipulation of the parties made at the time, even if embodied in the mortgage. This is a doctrine from which a court of equity never deviates. Its maintenance is deemed essential to the protection of the debtor, who, under pressing necessities, will often submit to ruinous conditions, expecting or hoping to be able to repay the loan at its maturity, and thus prevent the conditions from being enforced and the property sacrificed.
“ A subsequent release of the equity of redemption may

*590The language quoted is an answer to the proposition affirmed by counsel for plaintiff that the public is not concerned as to how much or when the property of the debtor is taken in foreclosure. The whole reasoning relative to the right to waive the equity of redemption and the principle upon which it is founded is ápplicable to the construction of the statute before us. The rule also- held by the courts of equity from time immemorial that the mortgagor cannot waive at the time of the execution of the mortgage the right to the possession of the mortgaged premises during the period of redemption is analogous. This is for the special benefit of the mortgagor and the authorities have always been at one in refusing to enforce such waivers. But it has been argued that the statutes of 1897 relating to appraisement do not evince a public policy or the intention of the legislature to declare a uniform rule relative to sales under execution and foreclosure of all real estate at judicial sales. Section 3, Laws 1897, p. 71 (Bal. Oode, § 5274), is mandatory in its language:

“It shall be the duty of the judgment creditor . . . when the judgment is to be satisfied in whole or in part from real estate, or any interest therein, to deliver to the sheriff a true statement, signed by himself or attorney, containing a description of the property levied upon, the estimated value of each separate description, and serve a copy upon the judgment debtor or his attorney.”

Thus it will be seen that before the sheriff can take a single step under his execution after levy the appraisement must be made by the judgment creditor; it is a part of the process as necessary as the notice of sale; but if it were de*591sirable to derive tbe intention of the legislature from surrounding circumstances and conditions then existing, it is also easy to deduce the rule of public policy. For a few years preceding the legislative session of 1897 it was a matter of universal knowledge in this state that real property exposed to sale under execution was sacrificed. A severe financial stringency and absolute dearth of money in general circulation destroyed the value of real property, and at such sales generally the only bidder was the judgment creditor, who in effect could and did bid so much as he chose for property, and thus the mortgage which, when executed, was deemed secured by property of thrice its value frequently was purchased by the mortgagee for a small portion of the amount secured, and a deficiency judgment left standing against the mortgagor for the balance, often the larger portion of the claim. It is plain to my judgment that the legislature intended by these statutes to prevent the undue sacrifice of property. Whether the statute is the best that could be framed for that purpose or whether it is wise legislation are matters which the courts cannot control. The question at the outstart ought to be Is the statute constitutional? I understand the court is agreed that the legislature has the power to enact such laws. I have examined the numerous cases cited by counsel upon the question of the constitutionality of this statute, and my conclusion is that with the exception of the mechanic’s lien and slaughterhouse cases all the cases cited are those involving class legislation, and as • such would probably be held void under art. 1, sec. 12,- of our constitution. These cases hold the acts under consideration void for the reason that they limit the right to contract to certain classes, to-wit: Shaver v. Pennsylvania Co., 71 Fed. 931 (railroad employes); Low v. Bees Printing Co., 41 Neb. 127 (59 K W. 362, 43 Am. St. Rep. 670), (all *592laborers except on farms); Commonwealth v. Perry, 155 Mass. 117 (28 N. E. 1126, 31 Am. St. Rep. 533), (weavers); State v. Goodwill, 33 W. Va. 179 (10 S. E. 285, 25 Am. St. Rep. 863), (laborers in mines and factories); Millett v. People, 117 Ill. 294 (7 N. E. 631, 57 Am. Rep. 869), (coal miners); Leep v. St. Louis Ry. Co., 58 Ark. 407 (25 S. W. 75, 41 Am. St. Rep. 109), (railroad employes); In re Jacobs, 98 N. Y. 106 (50 Am. Rep. 636), (cigarmakers in tenement houses); Ex parte Kuback, 85 Cal. 274 (24 Pac. 737, 20 Am. St. Rep. 226), (employes on public contracts); In re Eight Hour Law, 21 Colo. 29 (39 Pac. 328), (laborers in mines, factories and smelters); In re House Bill No. 203, 21 Colo. 27 (39 Pac. 431), (coal miners).

The statutes here in question embrace all those entering into the relation of debtor and creditor, which is not only a relationship based upon its own peculiar characteristics, but is one recognized from the earliest times and under all forms of constitutions as subject to legislative control without the suspicion of being answerable to the charge of class legislation. The objection to the constitutionality of the provisions relating to appraisement being untenable, the important duty of the court is their construction.

2. And here I am unable to agree with the construction of the majority of the court. I concede that section 10 of the appraisement act is inartificially framed, and there is much difficulty in the harmonious construction of the several provisions included in the section. Section 2 provides, when the sale is of real property and consisting of several known lots or parcels, they shall be sold separately when demanded by the judgment debtor or a subsequent incumbrancer. This is merely declaratory of an' ancient equitable rule in mortgage foreclosures. The act is clear *593in the procedure on the appraisement. It is simple and direct. If the judgment creditor’s appraisement is satisfactory, notice of sale is given; if not satisfactory to the judgment debtor, then the appraisers are appointed by the clerk of the court and they shall appraise the real value of the property or interest of the judgment debtor therein. Section 8 (Bal. Code, § 5279) seems to commit finally the fairness of the appraisement and the propriety of another valuation of the property to the court. The difficulty in construction is found in section 10 (Bal. Code, § 5281). I think this section may be fairly read as follows: no property shall be sold for a sum less than eighty per cent, of the value thereof. All that follows in section 10 are exceptions or provisos. The well recognized canon of statutory interpretation, that- in the event of absolute repugnancy between a proviso and the body of the section and intention of the whole act, the proviso must yield, ought to be applied here, and the exceptions or provisos taken together would qualify the section that the property cannot be sold for less than eighty per cent, of the appraised value, the whole thereof may be sold if necessary to pay the debt at eighty per cent, of the appraised value, but if a portion of the property appraised at eighty per cent, will pay the debt no more can be sold. State, ex rel. Chamberlin, v. Daniels, 17 Wash. 111 (49 Pac. 243). As I view the construction given to section 10 by the court, the whole appraisement is so emasculated that nothing of value is left of it. The plain intention of all the preceding sections of the act is the appraisement of real property so as to avoid its sacrifice at the sale, and, while such legislation relating to execution sales is novel in this state, it is by no means new in the general legislation of our sister states. Very similar provisions relative to appraisement, as we have seen heretofore, existed in a number of the states, and one uni*594form intention pervaded all of them. There is nothing specially different in the results to the judgment creditor in our statutes from those found in the statutes of the other states. In fact we have in our prohate procedure long recognized a control over sales of property for the satisfaction of debts. An appraisement is mandatory in all administration sales, and the court is by statute authorized to set aside any sales, if in its_ judgment upon a hearing a larger amount can be obtained for the property; and without any statutory provision the courts in the exercise of their equitable powers continually in receiverships fix limits upon the bids which shall be received for property offered at sale. This court has approved such an order when made by a superior court of property under mortgage foreclosure in the custody of its receiver! All the arguments used against the fairness of the statute are equally applicable to probate sales and to receivers’ sales. As seen, section 8 of the statute reposes in the superior court the final determination of the fairness of the appraisement. Imaginable cases may be suggested where the appraisement might incidentally postpone the sale; but I think the general presumption of fairness in judicial procedure and that judicial officers will perform their duty will relieve the statute of any imputation of an intention to postpone collections on execution or to require anything but a fair sale of property.

3. The act relating to deficiency judgments (Laws 1897, p. 98) is clear and mandatory in its provisions and therefore not the subject of construction, and the only question litigated here is its constitutionality. As a mere question of procedure in a foreclosure suit it ought to be controlling. By legislative authority only in this state has the power to enter a deficiency judgment in a foreclosure of a mortgage been found. Without such sta*595tutes for authority to enter a deficiency judgment in the same proceeding, or where large discretion is given by equity rules, I think no court has entered such a judgment. But the broader question of the constitutionality of the statute which limits the recovery of the debt to the mortgage security has been fully discussed by counsel and by the court. It is objected that the statute is obnoxious, first, to article 5, section 1, and article 14, section 1, of the constitution of the United States, and article 1, section 3, of the constitution of Washington, in substance as follows: Ho person shall be deprived of life, liberty or property without due process of law;” and second, to article 14, section 1 of the federal constitution, “Ho state shall make or enforce any law that shall abridge the privileges or immunities of citizens of the United States.” Section 10 of article 1 of the federal constitution, that “no state shall pass any law impairing the obligation of contracts,” has been cited. The latter citation is so manifestly not in point here that I do not deem it necessary to refer to it again. The first provision does not say that the state may not deprive a person of life, liberty or property and stop there, but declares that it shall not be done “without due process of law.” The state is continually depriving persons of life, liberty and property, but it must be done according to due process of law.

“ Due process of law does not mean a statute passed for the purpose of working a wrong.” Cooley, Constitutional Limitations (1st. ed.), p. 353.
These words are held to be synonymous with the words “law of the land.” Ibid., p. 352, and this means— *
“ General public- law, binding upon all the members of the community under all circumstances, and not partial or private laws, affecting the rights of private individuals or classes of individuals. Millett v. People, 117 Ill. 297 (7 N. E. 631, 57 Am. Rep. 869).

*596And it is also that law which hears and condemns only according to recognized judicial usages. The second constitutional inhibition against making or enforcing any law which will abridge the privileges or immunities of citizens of the United States has been frequently considered by the supreme court of the United States. In Butchers’ Union Slaughterhouse, etc., Co. v. Crescent City, etc., Slaughterhouse Co., 111 U. S. 746 (4 Sup. Ct. 652), Mr. Justice Bradley observes:

“ I hold that the liberty of pursuit—the right to follow any of the ordinary callings of life—is one of the privileges of a citizen of the United States.”

And the application of this article of the federal constitution has generally been directed against some discrimination by the state in favor of its own citizens and against other citizens of the United States. . The protection of life, liberty and property and the enforcement of private rights has been uniformly held by the federal supreme court to devolve upon the state. The state unquestionably may regulate contracts between its citizens and control them as best accords with its own views of public policy, and it has always done this, and this policy may be changed at the will of the state so long as it does not impair the obligations of prior contracts. The questions relating to its policy have been in all our state constitutions committed to the legislative department of the government. In fact I believe almost without exception the English speaking race has entirely placed these questions within the domain of legislation. They belong to the field of political economy, morals and the general science of government, and people differ materially in their views upon them. At one time the legislature might deem it sound policy to encourage speculative loans of capital in the state. It might deem any exemption laws unwise. It might, as has heretofore been the rule, *597by legislative enactment in this state provide that the possession of real property should go to the mortgagee before the period for redemption expired without such mortgagee’s accounting for rents, issues and profits when redemption was made. It might, as was the law for some time of this state, abolish the equity of redemption in mortgages and in redemption of real estate sold at execution; and the court has tmiformly sustained such enactments as being peculiarly within the power of the legislature. The state may also appropriately through the legislative department change such rules. It may deem speculative loans objectionable. It may deem exemption laws wise. It may determine that the equity of redemption in mortgage foreclosures shall be preserved in the future. It may provide for a redemption of property sold on execution or it may provide that contracts may be made between the borrower and lender of money at such rates as they choose; but if it should adopt other views it may appropriately through its legislative department limit the right to borrow money to a certain rate of interest, and may, in my judgment, regulate and control the contract of mortgage and limit the amount and value in security embraced in a mortgage and the amount of the recovery thereon. It has been held that a state might forbid the assignment out of the state of claims against the recovery of which the exemption laws of the state of the residence of the parties would be a protection: Sweeny v. Hunter, 145 Pa. St. 368 (22 Atl. 653); declare after what performance contracts of insurance shall be non-forfeitable: Equitable Life Assur. Society v. Clements, 140 U. S. 226 (11 Sup. Ct. 822); regulate the weight and price of bread: Mobile v. Yuille, 3 Ala. 140 (36 Am. Dec. 441); restrict the removal and sale of cotton in seed: State v. Moore, 104 N. C. 714 (17 Am. St. Rep. 696, 10 S. E. 143); declare that railroad and telegraph companies cannot by pri*598vate agreement divest themselves of liability for acts as snch: Liverpool & G. W. Steam Co. v. Phenix Ins. Co., 129 U. S. 397 (9 Sup. Ct. 469). But many illustrations might be offered of the principle that the regulation and control of contracts, and the procedure for their enforcement, are not inhibited by either of the two provisions of the federal constitution heretofore mentioned. I apprehend the true rule can be formulated thus: If a public

policy is obviou’s from the statute and it is not arbitrary or partial its validity is assured. The public policy must be such as to induce the legislature to act, and its motives must not be merely whimsical and arbitrary, and the law cannot be merely partial but must affect all alike. Whether the policy inducing legislative action is wise does not come within the province of judicial inquiry. When the statute fairly discloses such a policy the act is valid, unless contravening some other constitutional provision. I think the policy of the act prohibiting a deficiency judgment in mortgage foreclosures is fairly deducible from the evident intention of the several acts which have been under discussion here and all enacted by the same legislature. We have seen the legislature repeal the law giving to the mortgagee or judgment creditor the immediate possession after sales of real property without any liability to account, in the appraisement law to secure fairer sales of real property on execution and to limit the recovery of a debt secured by mortgage to the property included in the mortgage. The conditions existing in the state were before the legislature. Large numbers of its citizens, many of them active and energetic business men, were retired from business or from any productive occupations because of existing deficiency judgments against them after mortgage foreclosures. The same considerations from this point of view might affect the legislative mind that could be adopted in the enactment *599of a state insolvency law, and the unbroken current of judicial authority in this country now sustains the validity of such insolvency laws enacted by the states, when they do not impair prior contracts. The state is interested in the activity and capacity of its citizens, and if any considerable class of them be deprived of their capacity to engage in productive occupations or business there is so much loss to the public. Something here of the same principle as underlies the exemption laws is found. A just motive existing in the legislative intent relieves the act of any objection that it is arbitrary. The next objection that is suggested to this law is that it is class legislation, but no authority has been called to our attention which would suggest such an objection. Mortgages have been the subject of legislative control both in the terms of the contract and in the procedure enforcing the mortgage contract throughout our history. It is a general and natural division, the subject of legislation. There can be no doubt of the power of the legislature to fix the rate of interest on money. That is a matter exclusively within its policy. This rate may be made so low as to largely interfere with the power to borrow money. In a number of the states the power to mortgage a homestead is forbidden, and in the state of Texas, notably, the real estate homestead is so large that, as has been observed by some jurists, it is a practical inhibition upon the mortgage generally of real property in that state. Yet though the constitutionality of this law has been challenged, it has uniformly, so far as my examinations have extended, been sustained. I understand, without legislative sanction, the right to mortgage chattels without taking possession is denied in many jurisdictions. The rule in the state of California seems to be that only such chattels as are specified in the various legislative acts are subject to mortgage unless the possession be delivered to the mortgagee. In the case *600of Bronson v. Kinzie, 1 How. 311, the supreme court of the United States had under consideration a law passed in the state of Illinois which provided that the equitable estate of the mortgagor should not be extinguished for twelve months after sale on decree, and which prevented any sale of the mortgaged property unless two-thirds of the amount at which the property had been valued by appraisers should be bid therefor. The question before the court was as to the impairment of existing contracts by the retroactive provisions of this statute. The court by Mr. Chief Justice Tauey declared:

“ Mortgages made since the passage of these laws must undoubtedly be governed by them; for every state has the power to prescribe the legal and equitable obligations of a contract to be made and executed within its jurisdiction. It may exempt any property it thinks proper from sale, for the payment of a debt; and may impose such conditions and restrictions upon the creditor as its judgment and policy may dictate. And all future contracts would be subject to such provisions; and they would be obligatory upon the parties in the courts of the United States, as well as in those of the state.”

This I understand to be the established rule enforced by the supreme court of the United States.

4. The effect of the statute making the contract for specific money soluble in lawful money of the United States involves a federal question and seems to have been determined by the controlling authority—the supreme court of the United States. The power of the state to declare a legal tender is limited to gold and silver coin. All “lawful money ” of the United States is not a legal tender for private obligations by the laws of the United States; but under the grant of power to coin money and regulate the value thereof the federal supreme court has, I think, decided that the question relating to final payment in private *601contracts is one exclusively of federal jurisdiction and vested in congress. The legal tender and gold contract decisions, taken in connection with the recent case of Woodruff v. State of Mississippi, 162 U. S. 291 (16 Sup. Ct. 820), are controlling here. The jurisdiction of the federal court would not in this case have been sustained on any other principle than complete federal control of such contracts. This conclusion I think is manifestly apparent from both the majority and minority opinions given in the case. A different question would be presented in contracts made by the state or municipal corporations controlled by the state.

My conclusions are that, with the exception of the solution of the contract in suit in lawful money of the United States, the judgment of the superior court is correct.