A law of the State of Illinois providing that a sale shall not
be made of property levied on under an execution unless it will
bring two-thirds of its valuation according to the opinion of three
householders is unconstitutional and void.
The case of
Bronson v.
Kinzie, 1 How. 311, reviewed and confirmed.
Where the circuit court by a rule adopts the process pointed out
by a state law, there must be no essential variance between them.
Such a variance is a new rule, unknown to any act of Congress or
the state law professedly adopted.
The case was this:
In 1840, McCracken, the plaintiff in error, recovered a judgment
in the circuit court against Hayward for the sum of $3,986.67 cents
and costs.
In February, 1841, the State of Illinois passed the following
law:
"
An act regulating the sale of property"
"Sec. 1. Be it enacted by the people of the State of Illinois,
represented in the general assembly, that when any execution shall
be issued out of any of the courts of this state, whether of record
or not, and shall be levied on any real or personal property, or
both, it shall be the duty of the officer levying such execution to
summon three householders of the proper county, one of whom shall
be chosen by such officer, one by the plaintiff, and one by the
defendant in the execution, or, in default of the parties' making
such choice, the officer shall choose for them, which householders,
after being duly sworn by such officer so to do, shall fairly and
impartially value the property upon which such execution is levied
having reference to its cash value, and they shall endorse the
valuation thereof upon the execution or upon a piece of paper
thereunto attached, signed by them, and when such property shall be
offered for sale, it shall not be struck off unless two-thirds of
the amount of such valuation shall be bid therefor, provided always
that the plaintiff in any execution issued from any court of record
of this state may elect on what property he will have the same
levied, except the land on which the defendant resides and his
personal property, which shall be last taken in execution. And in
all other executions issued from any of the courts of this state
not being courts of record, the plaintiff in execution may elect on
what personal property he will have the same
Page 43 U. S. 609
levied, excepting and reserving, however, to the defendant in
execution in all cases such an amount and quantity of property as
is now exempt from execution by the laws of this state, and
provided further that all sales of mortgaged property shall be made
according to the provisions of this act, whether the foreclosure of
said mortgage be by judgment at law or decree in chancery. The
provisions of this act shall extend to judgments rendered prior to
the first day of May, eighteen hundred and forty-one, and to all
judgments that may be rendered on any contract or cause of action
accruing prior to the first day of May, eighteen hundred and
forty-one, and not to any other judgments than as before
specified."
"Sec. 2. When any property shall be levied on and appraised in
the manner required by this act and the same shall be susceptible
of a division, no greater quantity thereof than will be sufficient
to pay the amount of the execution or executions thereon levied,
together with the proper costs at two-thirds of the valuation
thereof, shall be offered for sale by the officer in whose hands
such execution or executions may have been placed for
collection."
"Sec. 3. This act shall be in force from and after its passage,
and the Secretary of State is hereby required to have a thousand
copies thereof printed immediately after its approval and transmit
them to the clerks of the county commissioners' courts of the
several counties in this state for distribution among the proper
officers thereof."
"Approved February 27, 1841."
In June, 1841, the circuit court of the United States adopted
the following rule:
"When the marshal shall levy an execution upon real estate, he
shall have it appraised and sold under the provisions of the law of
this state entitled 'An act regulating the sale of property,'
approved 27 February, 1841, if the case come within the provisions
of that law, and any two of the three householders selected under
the law agreeing may make the valuation of the premises
required."
In May, 1842, a pluries execution was issued on the judgment
under which the marshal levied upon real estate and advertised it
for sale in the ensuing August. It was appraised by three
householders, and, no person bidding two-thirds of the valuation,
it was not sold.
In March, 1843, the plaintiff sued out a
venditioni
exponas to sell
Page 43 U. S. 610
the property levied upon as above stated, and in May served a
written notice on the marshal directing him not to have the
property valued, but to sell it to the highest bidder, regardless
of the statute of Illinois. The marshal replied that he conceived
it to be his duty to be governed by the rule of court.
In June, 1843, the plaintiff, by his counsel, made the following
motion to the court:
"1. The plaintiff, by Arnold, his attorney, comes and moves the
court to set aside the return to the pluries execution issued in
this cause, dated 16 May, 1842, under which the property levied
upon was appraised, and not sold because no one would bid
two-thirds of appraised value."
"2. That the court direct the marshal to sell said property to
the highest bidder, without regard to the valuation already made
and without having it valued again."
"3. That the marshal proceed to sell said property without
regard to the provisions of the laws regulating the sale of
property, passed since the rendition of the judgment, but that he
execute the process of the court, enforcing the judgment according
to the remedy existing at the time of the rendition of the
judgment, and the making of the contract between the parties."
"4. That the marshal be directed to proceed and sell the
property levied upon without regard to the provisions of the act of
February, 1841, of the Legislature of Illinois, and of January,
1843, regulating the sale of property, above referred to."
This motion was sustained by an affidavit setting forth the
facts in the case.
Upon the argument of the motion, the judges were divided in
opinion upon the following points.
"1st. Whether the said motion shall be granted in manner and
form as the same is asked or refused, or any part thereof."
"2d. Whether the return of the marshal on the execution above
set forth, dated May 16, 1842, under which the property was
appraised and not sold, because two-thirds of appraised value was
not bid therefor, shall or shall not be set aside as
insufficient."
"3d. Whether the court shall or shall not make an order
directing the marshal to sell the property levied on in the usual
mode at public auction to the highest bidder without having the
same valued by three householders, and without regard to valuation
which has
Page 43 U. S. 611
been made, and without requiring two-thirds of said valuation to
be bid therefor."
"4th. Whether the court shall or shall not direct the marshal to
proceed and sell the property levied upon without regard to the
provisions of the Act of February 27, 1841, of the Legislature of
Illinois, and the rule adopting said law at the June term,
1841."
"5th. Whether the court will or will not direct the enforcement
of said judgment according to the laws regulating the remedy when
said judgment was entered and the contract made."
Upon which certificate of division the cause came up to this
Court.
MR. JUSTICE BALDWIN delivered the opinion of the Court.
It appears from the record in this case that the plaintiff
obtained a judgment against the defendant in June, 1840, on which a
pluries
fi. fa. issued at May term, 1842; real property
was levied on, appraised according to the provisions of a law of
Illinois passed on 27 February, 1841, and the rule of the circuit
court of that state, adopted in June of the same year, which law
and rule are inserted in the statement of the case by the
reporter.
The property levied on was advertised for sale by the marshal in
August, 1842, but was not sold as no one bid two-thirds of the
appraised value. In March, 1843, the plaintiff sued out a
venditioni exponas, with directions to the marshal to sell
the property regardless of the state law, which the marshal refused
to obey, conceiving himself bound by the aforesaid rule of court.
Whereupon the plaintiff moved the court for an order directing the
marshal to sell to the highest bidder without valuation or any
regard to the state law.
"1. The plaintiff, by Arnold, his attorney, comes and moves the
court to set aside the return to the pluries execution issued in
this cause, dated 16 May, 1842, under which the property levied
upon was appraised and not sold because no one would bid two-thirds
of appraised value."
"2. That the court direct the marshal to sell said property to
the highest bidder, without regard to the valuation already made
and without having valued it again. "
Page 43 U. S. 612
"3. That the marshal proceed to sell said property without
regard to the provisions of the laws regulating the sale of
property, passed since the rendition of the judgment, but that he
execute the process of the court, enforcing the judgment according
to the remedy existing at the time of the rendition of the judgment
and the making of the contract between the parties."
"4. That the marshal be directed to proceed and sell the
property levied upon, without regard to the provisions of the act
of February, 1841, of the Legislature of Illinois, and of January,
1843, regulating the sale of property above referred to."
On the argument of this motion, the court was divided in opinion
on the points mentioned in the statement. These questions must be
considered in two aspects,
1. In reference to the Constitution.
2. The laws of the United States, as the tests of the validity
of the law of Illinois and the rule of court, which it is said
affect only the remedy, but not the right of the plaintiff arising
on the contract between the parties and the judgment rendered upon
it.
In placing the obligation of contracts under the protection of
the Constitution, its framers looked to the essentials of the
contract more than to the forms and modes of proceeding by which it
was to be carried into execution, annulling all state legislation
which impaired the obligation, it was left to the states to
prescribe and shape the remedy to enforce it. 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 on the
obligation of the contract in favor of one party to the injury of
the other; hence any law which in its operation amounts to a denial
or obstruction of the rights accruing by a contract, though
professing to act only on the remedy, is directly obnoxious to the
prohibition of the Constitution.
Page 43 U. S. 613
This principle is so clearly stated and fully settled in the
case of
Bronson v.
Kinzie, decided at the last term, 1 How. 311, that
nothing remains to be added to the reasoning of the Court or
requires a reference to any other authority than what is therein
referred to; it is, however, not to be understood that by that or
any former decision of this Court, all state legislation on
existing contracts is repugnant to the Constitution.
"It is within the undoubted power of state legislatures to pass
recording acts by which the elder grantee shall be postponed to a
younger if the prior deed is not recorded within the limited time,
and the power is the same whether the deed is dated before or after
the passage of the recording act. Though the effect of such a law
is to render the prior deed fraudulent and void as against a
subsequent purchaser, it is not a law impairing the obligation of
contracts; such too is the power to pass acts of limitation and
their effect. Reasons of sound policy have led to the general
adoption of laws of both descriptions, and their validity cannot be
questioned. The time and manner of their operation, the exceptions
to them, and the acts from which the time limited shall begin to
run, will generally depend on the sound discretion of the
legislature, according to the nature of the titles, the situation
of the country, and the emergency which leads to their enactment.
Cases may occur where the provision of a law may be so unreasonable
as to amount to the denial of a right, and call for the
interposition of the court."
28 U. S. 3 Pet.
290.
The obligation of the contract between the parties in this case
was to perform the promises and undertakings contained therein; the
right of the plaintiff was to damages for the breach thereof, to
bring suit and obtain a judgment, to take out and prosecute an
execution against the defendant till the judgment was satisfied,
pursuant to the existing laws of Illinois. These laws giving these
rights were as perfectly binding on the defendant, and as much a
part of the contract, as if they had been set forth in its
stipulations in the very words of the law relating to judgments and
executions. If the defendant had made such an agreement as to
authorize a sale of his property, which should be levied on by the
sheriff, for such price as should be bid for it at a fair public
sale on reasonable notice, it would have conferred a right on the
plaintiff, which the Constitution made inviolable, and it can make
no difference whether such right is conferred by the terms or law
of the contract. Any subsequent law which
Page 43 U. S. 614
denies, obstructs, or impairs this right by superadding a
condition that there shall be no sale for any sum less than the
value of the property levied on, to be ascertained by appraisement,
or any other mode of valuation than a public sale, affects the
obligation of the contract, as much in the one case, as the other,
for it can be enforced only by a sale of the defendant's property,
and the prevention of such sale is the denial of a right. The same
power in a state legislature may be carried to any extent, if it
exists at all; it may prohibit a sale for less than the whole
appraised value, or for three-fourths, or nine-tenths, as well as
for two-thirds, for if the power can be exercised to any extent,
its exercise must be a matter of uncontrollable discretion, in
passing laws relating to the remedy which are regardless of the
effect on the right of the plaintiff. This was the ruling principle
of the case of
Bronson v. Kinzie, which arose on a
mortgage containing a covenant, that, in default of payment, the
mortgagee might enter upon, sell, and convey the mortgaged
premises, as the attorney of the mortgagor; yet the case was not
decided on the effect and obligation of that covenant, but on the
broad and general principle that a state law which professedly
provided a remedy for enforcing the contract of mortgage
effectually impairing the rights incident to, and attached to it by
the laws in force at its date was void. No agreement or contract
can create more binding obligations than those fastened by the law,
which the law creates and attaches to contracts; the express power
which a mortgagor confers on the mortgagee to sell as his agent is
not more potent than that which the law delegates to the marshal,
to sell and convey the property levied on, under an execution. He
is the constituted agent of the defendant, invested with all his
powers for these purposes. The marshal can do under the authority
of the law whatever he could do under the fullest power of attorney
from the execution debtor, and no state law can prohibit it. It
follows that the law of Illinois now under consideration, so far as
it prohibits a sale for less than two-thirds of the appraised value
of the property levied on, is unconstitutional and void.
The second aspect in which this case must be considered is with
reference to the acts of Congress relating to process and
proceedings in the courts of the United States in cases at common
law. All the early laws on this subject were carefully and most
ably reviewed by this Court in
Wayman and Southard and
Bank of the United States v. Halstead, in which it was
held that the proceedings in the
Page 43 U. S. 615
courts of the United States should be the same as they were in
the several states at the time of passing the acts of Congress,
subject to be altered by the circuit courts, or regulations of the
Supreme Court. That the proceedings on executions were to be
governed by such laws until final satisfaction was obtained,
regardless of any subsequent changes by state legislation.
23 U. S. 10 Wheat.
20,
23 U. S. 51.
Prior to 1828, Congress had passed no process acts applicable to
the states admitted into the union after 1789. To remedy this
defect, and to confirm the decisions in the above cases, the act of
May, 1828, directed that writs of execution and other final process
issued on judgments and decrees, and the proceedings thereupon,
shall be the same in each state as are now used in the courts of
such state &c., thus adopting the same principles which had
been established by this Court in the construction of the acts of
1789 and 1792. Consequently no state law passed since May, 1828,
can have any effect on the proceedings on executions issued from
the courts of the United States, unless such laws are adopted by
those courts under the proviso in the third section of the act.
The rule adopted by the Circuit Court of Illinois does not fall
within this proviso, which declares,
"That it shall be in the power of the courts, if they see fit in
their discretion, so far to alter final process in said courts as
to conform the same to any change which may be adopted by the
legislatures of the respective states for the state courts."
This authorizes the court to adopt the change so made by a state
law, but not to adopt it only in part, or alter it in any respect.
The law directs the appraisement to be made by three householders,
one to be selected by the defendant, one by the officer, and one by
the plaintiff, without any authority to any two to make it, and,
consequently, requiring the concurrence of all. The rule of court
adopting this law provides "that any two of the three householders
selected under the law agreeing, may make the valuation required,"
such an adoption is not warranted by the act of 1828; it is
legislation in effect, by prescribing a new rule unknown to any act
of Congress, or the state law professedly adopted. But had the
adoption been in the terms of the law, it could not be recognized,
inasmuch as the appraisement therein directed, with the prohibition
to sell at less than two-thirds of the valuation, is repugnant to
the Constitution of the United States. It also conflicts with the
process acts, as construed
Page 43 U. S. 616
in
Wayman v. Southard, and
Bank of the United
States v. Halstead, and the repeated decisions of this Court
in later cases -- that no state law can be adopted under the act of
1828, which is in collision with any act of Congress.
41 U. S. 16 Pet.
94,
41 U. S.
312-314.
It must therefore be certified to the circuit court that the
motion made by the plaintiff's counsel ought to be granted, and
that the directions to the marshal prayed for by the plaintiff,
ought to be given in the manner stated in the second, third,
fourth, and fifth points certified.
MR. JUSTICE CATRON.
The third section of the act of 1828, provides
"That writs of execution, and other final process, issued on
judgments and decrees rendered in any of the courts of the United
States, and the proceedings thereupon, shall be the same (except
their style) in each state, respectively, as are now used in the
courts of such state."
A system of rules has been adopted in the Circuit Court of the
Kentucky District, regulating final process, and giving a widely
different effect to such process from what it had by the laws of
Kentucky; a violent controversy was the consequence in that state,
and which gave rise to the cases of
Wayman v. Southard,
and
United States Bank v. Halstead, reported in 10
Wheaton. The agitation it is understood, was one prominent reason
for the introduction of the Act of Congress of 1828. It repealed
and rules made by the courts of the United States regulating final
process, in all the districts, and adopted the execution laws of
the respective states, as they then stood, and if nothing more had
been done, future legislation on the subject, by the states, would
have been cut off. Congress, however, foreseeing new states might
come into the Union, to which the act would not apply, and that it
might be proper to adopt future state laws, in the existing states,
provided
"That it should be in the power of the courts, if they see fit,
in their discretion, by rules of court, so far to alter final
process in said courts as to conform the same to any change which
may be adopted by the legislatures of the respective states for the
state courts."
An adoption of the state law, as the legislature had made that
law, is the extent of the power conferred. If the courts can alter
the law in one respect, it may be altered in all respects, this is
not "conformity," but an exercise of the same power the act of
1828
Page 43 U. S. 617
prohibited. The rule before us will illustrate it. The state law
of Illinois enacts that three valuers shall determine the value of
the property levied on by the sheriff; one chosen by the plaintiff,
one by the defendant, and the other by the sheriff; that the three
must agree in the valuation, and if the property does not bring
two-thirds of such valuation, it shall not be sold.
The rule provides that if the appraisers disagree, the value
fixed by any two of them shall be sufficient to authorize the
marshal to sell. The debtor will naturally select one, who he
supposes will set the highest value on the property; the creditor
one he supposes will fix the lowest value; the marshal may be
favorably disposed to the one side or the other; most probably to
the absent creditor -- the appraiser of his selection, and the one
selected by the debtor, may agree, and usually would. This will cut
out all the advantages the statute secured to the creditor, as his
selection would have no effect; take it the other way and the
operation will be the same.
If this change were sanctioned, then, in Pennsylvania and other
states, where there are statutes by which lands are directed to be
valued by a jury of twelve, to ascertain whether the rents and
profits will pay the debt in a given number of years, in which
case, the debtor is compelled to take the accruing profits in
satisfaction as they arise, and if not, then the lands are to be
sold to the highest bidder, could also be altered, and by a rule of
court, a majority of two-thirds of the jury be authorized to assess
the annual income. It is manifest, if amendments and alterations
can be made by the courts, of the state statutes, they must, of
necessity, run into an unlimited discretion, if any one feature of
the state law is retained. I therefore think the rule of court
adopting the statute of Illinois, with the foregoing amendment, is
merely void, and that no part of the state statute is in force in
the circuit court of the United States in the District of
Illinois.
And not having been adopted, it is not before this Court for
construction, and that it is unnecessary and improper to inquire
into the constitutionality of the state law, as the laws in force
in 1828 must govern. In this respect the opinion in the United
States Bank v. Halstead is followed, where the precise question
arising in the case before us was presented (the rule aside), and
in which this Court then declined giving any opinion on the
valuation law of Kentucky. I have formed no opinion, whether the
statute of Illinois is
Page 43 U. S. 618
constitutional or otherwise. The question raised on it is one of
the most delicate and difficult of any ever presented to this
Court, and as our decision affects the state courts throughout, in
their practice, I feel unwilling to form or express any opinion on
so grave a question, unless it is presented in the most undoubted
form, and argued at the bar.
On the questions propounded by the certificate of division, I
agree in the answers given by my brethren, because the execution is
governed by the laws of Illinois as they stood at the passing of
the Act of Congress of 1828, without going farther, as I know the
constitutional question will affect other states beside Illinois;
many, not to say most of them have had, and some now have,
valuation laws, in which no distinction is made between contracts
made before the passing of the act, and those made afterwards, and
that the decision against their validity as to past contracts, will
reach a great way farther than may be supposed on a slight
examination.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Illinois, and on the points and questions on which the judges of
the said circuit court were opposed in opinion, and which were
certified to this Court for its opinion, agreeably to the act of
Congress in such case made and provided, and was argued by counsel,
on consideration whereof, it is the opinion of this Court:
1st. That the motion made by the plaintiff's counsel ought to be
granted in manner and form as the same is asked;
2d. That the return of the marshal on the execution as set
forth, dated May 16, 1842, under which the property was appraised
and not sold, because two-thirds of the appraised value was not bid
therefor, should be set aside as insufficient;
3. That the court should direct the marshal to sell the property
levied on in the usual mode at public auction to the highest
bidder, without having the same valued by three householders,
without regard to the valuation which has been made, and without
requiring two-thirds of said valuation to be bid therefor;
4th. That the court should direct the marshal to proceed and
sell the property levied upon without regard to the provisions of
the act of Feb. 27, 1841, of the Legislature of Illinois, and the
rule adopting said law at the June term, 1841; and
5thly and lastly, that the court should
Page 43 U. S. 619
direct the enforcement of said judgment, according to the laws
regulating the remedy when said judgment was entered and the
contract made. Whereupon, it is now here ordered and adjudged by
this Court, that it be so certified to the judges of the said
circuit court.
