On appeal from an order denying plaintiffs' motion to strike defendants' answer, and granting defendants' counter-motion to strike out the complaint.
For the appellants, Joseph L. Freiman.
For the respondents, Louis Struhl.
The opinion of the court was delivered by
HEHER, J. The question for decision is whether chapter 231 of the laws of 1932 (Pamph. L., 509), providing that no action shall be instituted against any person answerable on a bond secured by a real estate mortgage, unless such party shall have been joined in the proceeding to foreclose the mortgage, contravenes article I, section 10, paragraph 1, of the federal constitution, enjoining the states from passing any law impairing the obligation of contracts, and article IV, section 7, paragraph 3, of the state constitution, imposing a like prohibition upon the legislature, and, more specifically, securing against legislative deprivation "any remedy for enforcing a contract which existed when the contract was made." Chapter 82 of the laws of 1933 (Pamph. L., p. 172) has a like provision.
The insistence is that the statute, in providing for the joinder in the foreclosure proceedings of a person liable on a pre-existing bond as a sine qua non to action later on against such party on that obligation, is, in effect, "a postponement of the
appellants' remedy," and is therefore obnoxious to the constitutional provisions referred to. The specific vice of the statute, it is said, is that it "requires additional subpoenas to be issued and served, * * * additional litigation, and the possibility of delay," especially where service can be effected only by publication, and therefore it confers "a substantial advantage" upon the obligor, and places "an additional burden upon appellant in the enforcement of his bond, and to that extent deprives him of the less burdensome remedy that existed for the enforcement of his contract at the time it was made." Appellant relies upon Baldwin v. Flagg, 43 N.J.L. 495; Vanderbilt v. Brunton Piano Co., 111 Id. 596; Datz v. Barry, 115 N.J. Eq. 84. It is pointed out that in the case first cited the holding was that the enlargement of the time for the performance of an existing contract "for a definite or indefinite period, however short," constituted an impairment of its obligation. We find nothing of substance in the contention thus made.
Chief Justice Marshall early gave recognition to what he regarded as a fundamental distinction between the obligation of a contract and the remedy for its enforcement. He declared that, "without impairing the obligation of the contract, the remedy may certainly be modified as the wisdom of the nation shall direct." Sturges v. Crowninshield, 4 Wheat. 122, 200; 4 L. Ed. 529, 549. See, also, Hill v. Merchants' Mutual Insurance Co., 134 U.S. 515; 10 S. Ct. 589; 33 L. Ed. 994. But the line of demarcation is not always clearly defined. The obligation of a contract, in the constitutional sense, refers ordinarily to the means provided by law for its enforcement. If there is a lessening of the efficacy of the means thus provided, there is an unwarranted impairment of the obligation of the contract. Thus legislation which postpones or retards the enforcement of the contract contravenes this constitutional precept. This does not mean that, so far as the interdiction of the federal constitution is concerned, the legislature may not lawfully dispense with a particular mode of proceeding if another remains or is provided which affords an effective and reasonable means of enforcing
the right. The legislature may enlarge, limit or alter the modes of proceeding, and the forms to enforce the contract, provided that it does not deny a remedy, or so embarrass it with conditions or restrictions as seriously to lessen the value of the right. State of Louisiana, ex rel. Ranger v. City of New Orleans, 102 U.S. 203; 26 L. Ed. 132; Walker v. Whitehead, 83 U.S. (16 Wall.) 314; 21 L. Ed. 357; Bronson v. Kinzie, 42 U.S. (1 How.) 311; 11 L. Ed. 143; Tennessee, ex rel. Bloomstein v. Sneed, 96 U.S. 69; 24 L. Ed. 610; Hourigan v. Township of North Bergen, 113 N.J.L. 143; 172 A. 193.
The state is possessed of authority to make procedural changes, provided the regulations do not impair the substance of the right. In Bronson v. Kinzie, supra, Chief Justice Taney laid down the governing principle thus: "If the laws of the state passed afterwards had done nothing more than change the remedy upon contracts of this description, they would be liable to no constitutional objection. For, undoubtedly, a state may regulate at pleasure the modes of proceeding in its courts in relation to past contracts as well as future. It may, for example, shorten the period of time within which claims shall be barred by the statute of limitations. It may, if it thinks proper, direct that the necessary implements of agriculture, or the tools of the mechanic, or articles of necessity in household furniture, shall, like wearing apparel, not be liable to execution on judgments. Regulations of this description have always been considered, in every civilized community, as properly belonging to the remedy, to be exercised or not by every sovereignty, according to its own views of policy and humanity. It must reside in every state to enable it to secure its citizens from unjust and harassing litigation and to protect them in those pursuits which are necessary to the existence and well-being of ...