ABOLISHED RETROACTIVELY. 699 In Bilmeyer v. Evans, a pro such waiver shall be valid. vision in a warrant of attorney to confess judgment, that there should be no stay of execution after the day named for payment, was held to be a part of the contract, which could not be annulled retroactively by an act of assembly. "If," said Woodward, J., "the thing provided for by the legisla ture be within their general competence, and yet be the very thing expressly excluded by a particular contract, it is plain that, as to the parties to that contract, the law is unconstitutional and void, because it impairs the obligation of their contract; nor do you rescue the law from this consequence by calling it remedial. The legislature can no more subvert the lawful contracts of parties under the guise of remedial legislation, than by a direct assault. They can pass no law that impairs the obligation of contracts. Exemption statutes illustrate this whole subject. What portion of a man's property shall be liable for his debts, and what shall be exempt, is a fair subject of legislative discretion. Manifestly, exemption statutes are regulations of the creditor's remedies against the debtor's property; they are therefore constitutional. But in a particular contract the debtor stipulates that he will have no exemption, and devotes all of his property to the payment of his debts. Now, whilst he cannot repeal the law by his agreement, he can refuse its favors. His contract is lawful and binding. His waiver of legal rights has become parcel of the obligation of his contract, and the legislature can no more impair that obligation than they can annul the entire contract." In considering the question, it is necessary to discriminate between an undertaking that a particular remedy-as, for instance, a fieri facias-shall subsist as a means of enforcing a contract, and an undertaking that the debtor will not apply for a stay of execution, or withdraw any portion of his property from the operation of the writ. In the latter case, the party covenants for himself; in the former, he seeks 1 McKinney v. McKinney, 6 Watts, 34; Case v. Dunmore, 11 Harris, 93; Bowman v. Smiley, 7 Casey, 225; Bilmeyer v. Evans, 4 Wright, 324; Lewis v. Lewis, 47 Pa. 127. VOL. II.-4 700 STIPULATION THAT THERE SHALL to control the legislature. So the right of distress is, in its strict and technical sense, an authority given by the law, which cannot be kept alive by agreement after it has been recalled by a statute; but a stipulation that a creditor shall be entitled to enter and take such goods and chattels as he can find in a house, factory, or other building belonging to the debtor, and appropriate them in payment of arrears of rent, or a demand of any other kind, confers a power, arising ex contractu, which can neither be revoked by the donor, nor abrogated legislatively. The distinction is the more obvious because such a contract only covers the tenant's goods, and does not, like the common law power, justify the seizure of the property of a third person, though found on the premises. There is another aspect of the question. Is such legislation an exercise of the police power for the general good, or does it simply confer a privilege which the debtor may waive at pleasure? It has been plausibly contended that exemption laws have their foundation in the duty of protecting men against the consequences of their own improvidence, which forbids usurious and exorbitant rates of interest, or the creation of a mortgage without power to redeem. Every one, it has been said, may dispense with rules made solely for his benefit, but not with those which concern the community as a whole. When, therefore, the legis lature provides, through motives of humanity, that certain articles of prime necessity may be reserved for the debtor's use, he should not be allowed to frustrate the beneficial operation of the statute. It is not enough to say that he should be free to choose in a matter which so nearly concerns himself, because experience shows that men under the pressure of want are apt to sacrifice the future for present ease, and honest debtors do not look forward to a default in payment which will render them liable to an execution, and are therefore ready to consent that no part of their property shall be exempt, should such a contingency occur. 12 Leading Cases in Equity (4 Am. ed.), 1618; Congreve v. Ebbits, 10 Exch. 298; Moody r. Wright, 13 Metcalf, 17, 32. BE NO STAY, HOW FAR VALID. 701 A debtor may no doubt forego the right to exemption when the time arrives, as a mortgagor may release the equity of redemption; but a prospective agreement to that effect is void in the latter case, and may be deemed questionable in the former.1 Whatever the true view may be in such cases, it is clear that a right or power conferred in terms, or resulting from the nature of the contract, cannot be taken away on the plea that other and adequate remedies remain. A mortgagee is, for instance, entitled to enter and take the rents and profits, by virtue of his ownership of the legal title, without waiting until the mortgagor is in default; 2 and a law which abrogates this right will not be less unconstitutional because he may still bring suit for the debt, or proceed to a foreclosure. A clause in a mortgage of land or chattels authorizing the mortgagee to take possession in default of payment and proceed to a public or private sale is an integral part of the contract which the legislature may not impair; and any attempt on their part to hinder or postpone the exercise of the power thus conferred will fail. So the right of the mortgagor to redeem cannot be taken away retroactively by the legislature, although they may abridge the period within which it may be exercised.5 The obligation of a contract may also be impaired by a law withdrawing the property of the debtor from execution, or placing it in any other way beyond the reach of the creditor. In Curran v. The Bank of Arkansas the legislature of Arkansas chartered a bank, and the State contributed the entire capital, there being no other party interested. The bank 1 Stafford v. Elliott, 59 Ga. 837; Green v. Watson, 75 Id. 471; Phelps v. Phelps, 72 Ill. 545; Recht v. Kelly, 82 Id. 148; Curtis v. O'Brien, 20 Iowa, 376; Maxwell v. Reed, 7 Wis. 582. 21 Smith's Leading Cases (8 Am. ed.), 917. Mundy v. Munroe, 1 Mich. 76; Blackwood v. Van Vliet, 11 Id. 252. Bronson v. Kinzie, 1 Howard, 317. Robinson v. Howe, 13 Wis. 346; Butler v. Palmer, 1 Hill, 324; Cogell v. Power, 1 Mich. 369. • Curran v. The Bank of Arkansas, 15 Howard, 304. 702 RETROACTIVE EXEMPTION FROM LEVY. failed, and a statute was passed providing that the bonds of the State should be received in payment of debts due to the bank, and appropriating its assets to repay the amount advanced by the State. The Supreme Court held that as the State was the sole stockholder, the charter was an agency, and not a contract in the sense of the Constitution of the United States; but that a principal could not, by revoking the authority of his agent, invalidate the contracts which had been made while it was still in force. The assets of the bank were subject to a trust for its creditors, who had a right of priority which entitled them to a preference over its stockholders; and this principle was not less applicable because the entire stock belonged to the State. The legislature might repeal the charter, but the trust would remain, and would be enforced by a court of equity. It followed that the State of Arkansas could neither take the property of the bank to satisfy its demand, nor compel the bank to receive its bonds in payment. It seems, nevertheless, to be generally conceded, both in the State courts and by the Supreme Court of the United States, that the necessary implements of agriculture, the tools of a mechanic, or articles needful for household use, such as stoves, bedding, or wearing apparel, may be exempted from execution by a law passed after the period at which the obligation was contracted, although the debtor has no other property, and the effect is entirely to frustrate the creditor. It is not easy to reconcile such a result with the doctrine that whatever impairs the remedy impairs the right. If the legislature can determine finally what and how much of the debtor's property shall be exempt, it may so restrict the remedy as to render it practically unavailing. If, on the other hand, the ultimate determination rests with the judiciary, by what rule are they to be guided in revising the decision 1 See Quackenbush v. Danks, 1 Denio, 128; 1 Comstock, 129; Morse v. Goold, 1 Kernan, 281; Rockwell v. Hubbell, 2 Douglas (Mich.), 288; Edwards v. Kearzey, 96 U. S 661; Bronson v. Kinzie, 1 Howard, 311; McCracken v. Hayward, 2 Id. 608. STATE MAY REGULATE PROCEDURE. 703 of the legislature? The most satisfactory answer to these queries is, as already suggested, that such legislation should be regarded as an exercise of the police power in obedience to the dictate of humanity that the debtor shall not be deprived of the things which are indispensable to existence; and should they transcend these limits, the error may be rectified by the courts.1 Logical as seems the inference that, since laws postponing the period of performance, and laws postponing the period when performance can be enforced, tend to the same result, they should be classed in the same category, there are other considerations that lead to a different conclusion, which is sustained by a large and increasing array of authorities. Procedure, including the manner of bringing suit, the steps to be taken during the progress of the cause, the form and effect of judgments, and the writs whereby they are carried into execution, is under the control of the legislature, who may modify it by substituting new methods, which, though dilatory and less effectual than those previously in use, still afford a substantial means of redress.2 What alterations are expedient and admissible, is necessarily in the first instance for the body which enacts the law; and although their decision is not conclusive on the judiciary, it should not be set aside unless it is clearly unwarranted by the circumstances and inconsistent with the constitutional prohibition. Whenever a discretionary power is granted to 1 Hawthorne v. Calef, 2 Wallace, 10. 2 Tennesse v. Sneed, 96 U. S. 69; Railroad Co. v. Hecht, 95 Id. 168; Bronson v. Kinzie, 1 Howard, 311, 315; Penniman v. United States, 103 Id. 714; Antoni v. Greenhow, 107 U. S. 766; Templeton v. Horne, 82 Ill. 492; Evans v. Montgomery, 4 W. & S. 220; Long's Appeal, 87 Pa. 114; Oriental Bank v. Freese, 18 Me. 109; Bigelow v. Pritchard, 21 Pick. 109; Morse v. Gould, 11 N. Y. 281, 287; Johnson v. Higgins, 3 Met. (Ky.), 567; Barkley v. Glover, 4 Id. 44. Sturges v. Crowninshield, 4 Wheaton, 122, 200; Tennessee v. Sneed, 96 U. S. 69; Antoni v. Greenhow, 107 Id. 766; Jackson v. Lampshire, 3 Peters, 280; Professor Thayer's article on Legal Tender, Harvard Law Review, May, 1887, p. 92; Johnson v. Higgins, 3 Met. (Ky.), 567; Eames v. Savage, 71 Me. 342; Sears v. Cottrell, 5 Mich. 251. |