Opinion
Opinion filed November 2, 1937. Motion for rehearing denied November 19, 1937. Writ of certiorari denied February 5, 1938.
1. — Real Estate — Mortgages. Section 3063, Revised Statutes Missouri, 1929, provides that property which may be sold under any power of sale in a deed of trust which may be bought in by the holder of the debt shall be subject to redemption, and Section 3064 provides for the giving of bond to secure payment of interest on debt to accrue within such year after sale and for payment of legal charges and costs of the sale and interest accrued, and all taxes and assessments accrued or accruing during such year allowed for redemption, together with damages for waste committed or suffered by the holder of mortgage.
2. — Real Property — Mortgages. Where record title holder of property furnish redemption bond to holder of mortgage and where mortgage holder paid back taxes, held that statute required bond to cover taxes accrued and accruing and that mortgage holder was entitled to recover as damages under the redemption bond the back taxes paid.
Appeal from the Circuit Court City of St. Louis. — Hon. O'Neill Ryan, Judge.
AFFIRMED.
Stonewall J. Walton and Henry Elias Haas for appellants.
(1) The verdict in the instant case is clearly excessive in that it embraces items of damages which accrued long before the redemption bond sued on was alleged to have been executed. The rule appears to be well established that bonds of any character are prospective in their operation, and are not to be construed as retrospective unless the language of the bond, and the statute under which it is given, is so clear and unambiguous as to admit of no other construction. Stearns on Suretyship (4 Ed.), p. 204, sec. 129; State ex rel. Bank v. Finn, 98 Mo. 532, par. 1; State to use of Lancaster v. Jones, 89 Mo. 470, par. 4, l.c. 480; State ex rel. v. Alsup, 91 Mo. 172, par. 2; Stevenson v. Union Indemnity Co., 28 S.W.2d 346, pars. 1 and 4, 160 Tenn. 603, par. 3; Schwarze v. New Amsterdam Casualty Co., 136 Okla. 51, par. 1; Sipes v. Ardmore Book News Co., 138 Okla. 180, par. 1; 27 Amer. Eng. Ency. of Law (2 Ed.), 442; 2 Brandt on Suretyship (3 Ed.), sec. 625; 43 A.L.R., 992; 62 A.L.R. 407, 422; 77 A.L.R. 868; 98 A.L.R. 1276. (2) All statutory bonds are to be construed as though the law requiring and regulating them was written into them and the statute itself must be so construed as to harmonize with the Constitution for the reason that there is a strong presumption that the Legislature did not intend to pass an unconstitutional act. The Constitution of Missouri expressly provides that the Legislature "shall pass no law retrospective in its operation," and hence the uniform rule is that statutes are to be given a prospective operation only. Constitution of Missouri, art. 2, sec. 15, and art. 12, sec. 19; Biedermann v. Mermod, Jaccard King Jewelry Co., 210 Mo. App. 158, par. 2, 242 S.W. 126, par. 2; Royal Arcanum v. Heitzman, 140 Mo. App. 105, par. 2; State ex rel. v. Wright, 251 Mo. 325, 344; State ex rel. v. Wofford, 121 Mo. 61, par. 4; Bartlett v. Ball, 142 Mo. 28, 35; State ex rel. v. Dirckx, 211 Mo. 568, par. 3; Jamison v. Zausch, 227 Mo. 406, 417; Reed v. Swan, 133 Mo. 100, par. 2; 59 Corpus Juris, 1159, sec. 692; State v. Moody, 202 Mo. 120, 127; Zellars v. National Surety Co., 210 Mo. 86, par. 4; Fogarty v. Davis, 305 Mo. 288, 294. (3) Plaintiff was not entitled to recover the delinquent taxes for the years 1931 and 1932, but we are willing to concede that she may be entitled to recover the additional interest and penalties that may have accrued on account of said back taxes "during such year allowed for redemption." Our Supreme Court has repeatedly ruled that taxes are an encumbrance against property, and the redemption statute expressly provides that the obligee in the bond may recover "all interest which the purchaser at the sale may pay on any prior encumbrance on the land as well as the interest which may accrue thereon during such year allowed for redemption." Sec. 3064, R.S. of Mo. 1929; Blossom v. Van Court, 34 Mo. 390, 394; Morey Engineering Construction Co. v. St. Louis Artificial Ice Rink Co., 242 Mo. 241, par. 2, l.c. 249; Commerce Trust Co. v. Syndicate Lot Co., 208 Mo. App. 261, 274, 235 S.W. 150, par. 2; Maddocks v. Stevens, 89 Me. 336; Cochran v. Guild, 106 Mass. 29; 4 Words Phrases (1st Series), p. 3526, under the subject, "Incumbrance on Title;" Bouvier's Law Dictionary, Title "Incumbrance;" Blacks' Law Dictionary, Title "Incumbrance." (4) The verdict is further excessive in that it includes items of damage which accrued after the bond became functus officio. The record shows that the foreclosure sale was had on April 20, 1933, and that the suit to redeem the property was dismissed by the Circuit Court of the City of St. Louis on the 25th day of April, 1934. By the terms of the statute the redemption bond was only intended to secure items of damage accruing "during such year allowed for redemption," and not afterwards. Yet in the court below plaintiff was allowed to recover the additional interest and penalties which accrued on the delinquent taxes up to the 10th day of August, 1934. After the redemption suit was dismissed on April 25, 1934, the property became the plaintiff's and any delay in the payment of the taxes could not be charged against the bondsmen. Sureties appointed for a limited time are liable only for defaults occurring during that period. Moreover, it was respondent's plain duty to minimize the damages. 1 Brandt on Suretyship (3 Ed.), secs. 185, 186; Stearns on Suretyship (4 Ed.), sec. 156; 9 Corpus Juris, p. 40, sec. 65, note 65; Moss v. State, 10 Mo. 214; Ida County Savings Bank v. Seidensticker, 128 Iowa 54, 58, citing Mo. case; Blades v. Dewey, 136 N.C. 176; O'Brien v. Murphy, 175 Mass. 253, 254; 8 Amer. Eng. Ency. of Law (2 Ed.), 605; Bradfield v. Kansas City, 204 S.W. 819, par. 1; Coal Co. v. Brick Co., 66 Mo. App. 296, par. 4. (5) Where the verdict is found to be excessive and the excess is a fixed, determinate and segregated amount, the appellate court has the power to "pinch out, eliminate and excise the false items" and affirm the judgment as to the residue. But this power is only exercised in cases where the excess clearly appears from the record. It is not the duty of the appellate court to make intricate calculations, or to receive new figures dehors the record, for the reason that this is a reviewing court and not a trial court. In such a case there is nothing to do but to remand the cause for a new trial. 2 R.C.L. 279, and cases cited under note 5; 3 Amer. Jurisprudence 683, note 8; 4 C.J. 1139, sec. 3137; 4 C.J. 1143, sec. 3147; 18 Ency. Plead. Prac. 128, note 1 and Mo. cases cited; De La Villina v. De La Villina, 90 Fla. 905, 906; Elks Club v. Adair, 95 Fla. 415, par. 2; In re Aiken, 262 Mo. 403, 420, 171 S.W. 342, par. 11; Albers Commission Co. v. Spencer, 139 S.W. 321, par. 7; Kennedy v. Portman, 97 Mo. App. 253, par. 4; Thero v. Railroad, 144 Mo. App. 161, par. 6; Hunter v. City of Mexico, 49 Mo. App. 17, par. 2; Ibers v. O'Donnell, 25 Mo. App. 120, par. 4; Slattery v. City of St. Louis, 120 Mo. 183, par. 4; Whitehead v. Kennedy, 69 N.Y. 462, 469. (6) There is another cogent reason for remanding this cause for a new trial in that it appears from the pleadings that plaintiff's right to recover anything at all is "a disputed question of fact." And it is expressly provided by statute that "any issue of fact must be tried by a jury" and where a money judgment is sought to be recovered the jury, and not the court, "shall assess the amount of the recovery," if any. Secs. 930, 948, 973, R.S. of Mo. 1929. (7) Where a remittitur is ordered by the appellate court it is proper to assess the costs of the appeal against the respondent. This, for the reason that the statute expressly provides that "the party prevailing shall recover his costs against the other party." Sec. 1242, R.S. of Mo. 1929; Trustees v. Hoffmann, 95 Mo. App. 488, par. 12; Meyer v. Insurance Co., 95 Mo. App. 721, par. 7; Miller v. Hardin, 64 Mo. 545, par. 2; Clark v. Bullock, 65 Mo. 535, par. 2; Peck v. Childers, 73 Mo. 484, par. 2; Smith v. Railroad, 92 Mo. 359, 375.
Dubail, Wilson Judge for respondent.
(1) Johnson v. Atchison, 90 Mo. 48, 1 S.W. 751; Walmsley v. Dougherty, 163 Mo. 298, 63 S.W. 693. (a) The bond was prospective in its operation. Reed v. Swan, 133 Mo. 100, 34 S.W. 483; Supreme Camp of Royal Arcanum v. Heitzman, 140 Mo. App. 105, 120 S.W. 628. (b) The function of the court is not to legislate, but to construe the statute as it finds it. State v. Christup, 337 Mo. 776, 85 S.W.2d 1024. (c) The word "accrued" is in the statute and in the bond, and effect must be given to it. 13 C.J. 527; State ex rel. Dean v. Daues, 14 S.W.2d 990; Castillo v. State Highway Commission, 312 Mo. 244, 279 S.W. 673. (d) "All taxes and assessments and interest and costs thereon whether general or special accrued and accruing during such year for redemption" means taxes due and payable at the time the bond is signed and taxes becoming due and payable during the year allowed for redemption. 1 C.J. 733; 1 C.J.S. 761, et seq.; New Order B. L. Ass'n v. 22 Chancellor Avenue, 149 A. 525, 106 N.J. Eq. 1; Johnston v. Ragan, 265 Mo. 920, 178 S.W. 159. (2) Orr v. Rode, 101 Mo. 387, 13 S.W. 1066; Davenport v. Silvey, 265 Mo. 543, 178 S.W. 168. (3) If the verdict be excessive, the excess clearly appears from the record and the statutes of Missouri, of which this court takes judicial notice. Laws Mo. Ex. Sess. 1933-34, p. 166; Sec. 9952, R.S. Mo. 1929, amended Laws Mo. 1933, p. 429; Sec. 9969, R.S. Mo. 1929, amended, Laws Mo. 1933, p. 426, l.c. 429. (4) The jury passed on the issues of fact as required by our law. (5) We do not come into this court admitting an excessive judgment.
This is an action on a redemption bond executed to plaintiff, Katherine Krahenmann, by defendant Alice Schulz as principal, and William Scheer and Julia Scheer as sureties, in the sum of $1250.
On April 20, 1933, at a foreclosure sale under a deed of trust on certain property situated on Park Avenue, in the City of St. Louis, the plaintiff, Katherine Krahenmann, who was the holder of the deed of trust became the purchaser of the property. On May 10, 1933, defendant Alice Schulz, the maker of said deed of trust and the owner of said property, instituted a suit in the circuit court of the city of St. Louis to redeem the property from the foreclosure sale, and the redemption bond in suit here was thereupon executed and approved by said court.
On April 25, 1934, the redemption suit was by the court dismissed, and the trustee, by his deed conveyed to plaintiff the property, pursuant to the foreclosure sale.
The redemption bond in suit was executed pursuant to, and is conditioned in accordance with, the requirements of section 3064, Revised Statutes 1929, Mo. St. Ann., sec. 3064, p. 1894.
Section 3063, Revised Statutes of Missouri, 1929, Mo. St. Ann., sec. 3063, p. 1892, provides that property which may be sold under any power of sale in a deed of trust and which at such sale shall be bought in by the holder of the debt thereby secured shall be subject to redemption within one year from the date of such sale.
Said section 3064 provides that no party shall have the right of redemption unless he shall give security for the payment of the interest on the debt secured by the deed of trust to accrue within such year after the foreclosure sale, and for the payment of the legal charges and costs of the sale, and for the payment of all interest accrued prior to the sale or thereafter which the purchaser may pay on any prior encumbrance, as well as the interest which may accrue thereon during such year allowed for redemption whether so paid or not, and "all taxes and assessments and interest and costs thereon whether general or special accrued or accruing during such year allowed for redemption," and for damages for all waste committed or suffered by the party giving such security of those claiming under him during such year, unless said property is so redeemed.
On August 10, 1934, plaintiff paid all delinquent taxes on the property, together with all interest and costs thereon, as follows: Taxes for the year 1931, $140.57; taxes for the year 1932, $127.94; taxes for the year 1933, $113.77; aggregating $382.28. She also paid the costs of the foreclosure sale amounting to $95.29. The interest on the debt secured by the deed of trust accruing during the year allowed for the redemption amounts to $300. Plaintiff obtained judgment for $777.57, the total amount of these items, against all the defendants, and from this judgment defendants William Scheer and Julia Scheer have appealed here.
Appellants complain that the damages assessed are excessive in that they include taxes for the years 1931 and 1932. They contend that the only taxes covered by the bond are the taxes accruing during the year allowed for redemption, and that taxes already accrued at the time of the execution of the bond are not covered. This construction of the bond is out of accord with its express terms. It is expressly conditioned for the payment of all taxes "accrued or accruing during such year allowed for redemption." This language clearly covers taxes already accrued, as well as taxes accruing during the redemption year. To construe the language as covering only the taxes accruing during the redemption year would eliminate the word "accrued" as useless.
Moreover, it is elementary law that a mortgagor in possession is in duty bound to pay the taxes. This duty is a continuing one. It does not end when the taxes become delinquent. It would seem, therefore, unreasonable that a mortgagor, in seeking to avail himself of his right to redeem, be allowed to prolong his possession, and extend the time of payment of his mortgage debt as well, for a period of one year, without giving security for the payment of taxes already accrued, as well as for the payment of taxes accruing during such year.
Appellants further complain that the damages assessed are excessive in that they include interest accruing on taxes subsequent to the expiration of the year allowed for redemption. This presents a question not properly before us for review since it was not called to the attention of the court in the motion for a new trial.
The Commissioner recommends that the judgment of the circuit court be affirmed.
The foregoing opinion of SUTTON, C., is adopted as the opinion of the court. The judgment of the circuit court is accordingly affirmed. Hostetter, P.J., and Becker and McCullen, JJ., concur.
ON MOTION FOR REHEARING.
Appellants appear to be laboring under the misapprehension that we have overlooked the rule that a surety bond must be construed so as to operate prospectively unless the intention that it shall operate retrospectively is made manifest by its terms. We have been mindful of that rule in construing the statute which fixes the terms of the bond, and we think we have construed the statute in consonance with that rule. The statute clearly requires the bond to cover taxes accrued, as well as taxes accruing during the year allowed for redemption, and we have instanced the obligation of the mortgagor in possession to protect the security, given by the mortgage, from impairment by the accrual of taxes, to show that the construction which makes the bond cover taxes accrued prior to the foreclosure, as well as taxes accruing during the year allowed for redemption, is a reasonable construction, and not an unreasonable one as contended by appellants. Taxes are peculiar in their effect upon the security given by a mortgage, in that they come on by operation of law subsequent to the giving of the mortgage and take precedence over the mortgage and thus impair the security, unless they are paid. It is pertinent to observe that the statute makes the bond retrospective in another particular, that is, in that it requires that the bond cover all interest accrued prior to the foreclosure sale on any prior encumbrance. The term, "any prior encumbrance," evidently refers to any encumbrance existing prior to the giving of the mortgage. In case of a mortgage given subject to a prior encumbrance the security given is the equity of redemption, and accrued interest on the prior encumbrance, if unpaid, impairs the security given just as accrued taxes, if unpaid, impair the security. Why should the bond cover the one impairment and not the other in case the mortgagor is allowed by virtue of the bond to prolong his possession of the mortgaged property and extend the time for the payment of the mortgage debt for an additional year?
Appellants undertake to give the word "accrued" a useful purpose in the statute on the theory that there is a possibility that some taxes may have accrued subsequent to the foreclosure sale and prior to the execution of the bond, and that the word "accrued" is intended to cover such taxes. The trouble with this theory is that the language of the bond as required by the statute is ample to cover such taxes without the use of the word "accrued." The year allowed for redemption by the terms of the statute is the year succeeding the foreclosure sale, not the year succeeding the giving of the bond, and the statute, without the word "accrued," requires the bond to cover all taxes "accruing during such year allowed for redemption." If this language, without more, is not ample to cover the whole redemption year, then it does not mean what it plainly says. We do not see how this language could be made more comprehensive by the use of the word "accrued" unless it was intended to reach and cover taxes accrued prior to the commencement of the redemption year.
The Commissioner recommends that appellants' motion for a rehearing be overruled.
The foregoing opinion of SUTTON, C., is adopted as the opinion of the court. Appellants' motion for a rehearing is accordingly overruled. Hostetter, P.J., and Becker and McCullen, JJ., concur.