185 U.S. 55
JEANNIE M. WILSON, Administratrix of the Estate of Alexander Osbourne, Deceased, Plff. in Err.,
ADAM ISEMINGER and Elmer H. Rogers.
Argued March 19, 1902.
Decided April 7, 1902.
[185 U.S. 55, 56] This was an action of assumpsit brought December, 1896, in the court of common pleas, No. 1, of Philadelphia county, by Harvey G. Clay, administrator of the estate of Alexander Osbourne, deceased, against Adam Iseminger, for recovery of arrears of ground rent due on a ground-rent deed between Alexander Osbourne and Jennie M., his wife, and the said Adam Iseminger, dated January 4, 1854. The statement of particulars claimed arrears of ground rent due, under the stipulations of said deed, for the years 1887 to 1896, both inclusive, with interest on each arrear.
On January 27, 1897, one Elmer H. Rogers, having been permitted, as terre-tenant and owner in fee of the lot of ground deseribed in the ground- rent deed, to intervene and defend pro interesse suo, filed, under the rules of the court, an affidavit of defense to the whole of the plaintiff's claim, averring that no payment, claim, or demand had been made by anyone on account of or for any ground rent on the premises described in the said deed, or from any owner of said premises, or any part thereof, for more than twenty-one years prior to the bringing of the suit; that no declaration or acknowledgment of the existence thereof, or of the right to collect said ground rent thereon, had been made within that period by or for any owner of said premises, or any part thereof, and that neither he nor they or any of them within that period ever executed any declaration of no set-off in reference to said ground rent, or recognized its existence in any way, manner, shape, or form.
This defense was based on the 7th section of an act of the [185 U.S. 55, 57] commonwealth of Pennsylvania of April 27, 1855, in terms as follows:
Thereupon the plaintiff took out a rule on the defendant to show cause why judgment should not be entered against him for want of a sufficient affidavit of defense, assigning as a reason why such rule should be made absolute that the said 7th section of the act of April 27, 1855, was unconstitutional within the 10th section of article 1 of the Constitution of the United States, forbidding any state from passing any law impairing the obligation of contracts.
After a hearing the court discharged the said rule for judgment; a bill of exceptions was signed and sealed, and the cause was then taken to the supreme court of Pennsylvania, where the judgment of the court of common pleas was affirmed. 187 Pa. 108, 41 Atl. 38.
Thereafter the case came on for trial before the court and a [185 U.S. 55, 58] jury. The plaintiff offered evidence tending to show that the ground rent in question had never been paid off and extinguished. This offer was objected to as immaterial and irrelevant. The objection was sustained, and an exception was taken by the plaintiff. The court was asked to instruct the jury that the 7th section of the act of April 27, 1855, was unconstitutional, because it impairs the contract reserving the rent, and was inhibited by the 10th section of article 1 of the Constitution of the United States, which forbids the states from passing any law impairing the obligation of contracts. The request so to charge was refused by the trial judge. The defendants asked the court to charge that the verdict should be for the defendants. This request was granted. A bill of exceptions to the action of the court in rejecting the plaintiff's offer of evidence, in declining to charge as requested by the plaintiff, and in charging as requested by the defendant, was signed and sealed by the trial court. A verdict and judgment in favor of the defendants was then entered. The cause was then taken a second time to the supreme court of Pennsylvania, where on April 3, 1899, the judgment of the court of common pleas was affirmed.
Mr. George Henderson for plaintiff in error.
Messrs. Ira Jewell Williams and Alex. Simpson, Jr., for defendant in error.
Mr. Justice Shiras delivered the opinion of the court:
The question for determination in this case is whether the 7th section of the act of assembly of the commonwealth of Pennsylvania of April 27, 1855, the terms of which appear in the foregoing statement, is an act or law impairing the obligation of contracts within the meaning of the Constitution of the United States.
The peculiar character, under the laws of the state of Penn- [185 U.S. 55, 59] sylvania, of irredeemable ground rents, must first receive our notice.
It is defined to be a rent reserved to himself and his heirs by the grantor of land, out of the land itself. It is not granted like an annuity or rent charge, but is reserved out of a conveyance of the land in fee. It is a separate estate from the ownership of the ground, and is held to be real estate, with the usual characteristics of an estate in fee simple, descendible, devisable, alienable. Bosler v. Kuhn, 8 Watts & S. 185; Wallace v. Harmstad, 44 Pa. 495; McQuigg v. Morton, 39 Pa. 31.
It may be well to quote the language of the deed reserving the ground rent in question, which is that usually employed in the creation of such estates. The tenendum clause is in the usual form: 'To have and to hold the said described lot or piece of ground, hereditaments, and premises hereby granted with the appurtenances unto the said Adam Iseminger, his heirs and assigns, to the only proper use and behoof of the said Adam Iseminger, his heirs and assigns forever.' Then comes the reservation, as follows:
It appears in the Pennsylvania cases hereinbefore and hereafter cited, that this form of estate was, in the early history of the commonwealth, a favorite form of investment; but that eventually great inconveniences arose from the existence of ancient ground rents, which the owners and occupants of the land never heard of, but of whose extinguishment the records of title made no mention. Indeed, the records disclosed the reservation of such ground rents unpaid and unextinguished, going back more than a century. In Korn v. Browne, 64 Pa. 55, there is a quotation in the opinion from a tract by Mr. Eli K. Price, a distinguished real-estate lawyer of Philadelphia, as follows:
These evils led to the passage of the act of the 27th of April, 1855, entitled 'An Act to Amend Certain Defects of the Law for the More Just and Safe Transmission, and Secure Enjoyment of Real and Personal Estate.'
The theory of this remedial act is that upon which all statutes of limitation are based,-a presumption that, after a long [185 U.S. 55, 61] lapse of time, without assertion, a claim, whether for money or for an interest in land, is presumed to have been paid or released. This is a rule of convenience and policy, the result of a necessary regard to the peace and security of society.
Bonds, even when secured by mortgages upon land, mortgages themselves, merchants' accounts, legacies, judgments, promissory notes, and all evidences of debt, have universally been treated as lawfully within the reach of legislative power exercised by the passage of statutes of limitation. Such statutes, like those forbidding perpetuities and the statute of frauds, do not, in one sense, destroy the obligation of contracts as between the parties thereto, but they remove the remedies which otherwise would be furnished by the courts. Are not the powers of government adequate for this?
We are unable to perceive any sound distinction between claims arising out of ground-rent deeds and other kinds of debts and claims, which would exempt the former from the same legislative control that is conceded to lawfully extend to the latter.
But, assuming that there is nothing peculiar in ground rents that withdraw them from the reach of statutes of limitation, it is further contended, in the present case, that the act of April 27, 1855, can have no valid application to a ground rent reserved before the passage of that statute. It may be properly conceded that all statutes of limitation must proceed on the idea that the party has full opportunity afforded him to try his right in the courts. A statute could not bar the existing rights of claimants without affording this opportunity; if it should attempt to do so, it would not be a statute of limitations, but an unlawful attempt to extinguish rights arbitrarily, whatever might be the purport of its provisions. It is essential that such statutes allow a reasonable time after they take effect for the commencement of suits upon existing causes of action; though [185 U.S. 55, 63] what shall be considered a reasonable time must be settled by the judgment of the legislature, and the courts will not inquire into the wisdom of its decision in establishing the period of legal bar, unless the time allowed is manifestly so insufficient that the statute becomes a denial of justice. Cooley, Const. Lim. 451.
Thus, in Terry v. Anderson, 95 U.S. 628 , 24 L. ed. 365, it was said per Chief Justice Waite:
In Korn v. Browne, 64 Pa. 57, this question was considered, and it was said, per Read, J.: [185 U.S. 55, 64] 'The 7th section did not go into effect for three years, and gave ample time to all owners of ground rents to make claims and demands for the same, so as to prevent the bar of the statute. This prospective commencement makes the retrospective bar not only reasonable but strictly constitutional.' Citing Smith v. Morrison, 22 Pick, 430, and Ross v. Duval, 13 Pet. 64, 10 L. ed. 60.
In Biddle v. Hooven, 120 Pa. 225, 13 Atl. 927, it was said, referring to Korn v. Browne, 64 Pa. 57: 'An examination of it shows that the only question there argued was whether the section of the act referred to has a retrospective, as well as a prospective, operation with regard to ground rents. This appears in the first sentence of the opinion of Justice Read. He very properly held that, as the 7th section did not go into effect for three years, and gave ample time to all owners of ground rents to make claims and demands for the same, so as to prevent the bar of the statute, that this prospective commencement made the retrospective bar, not only reasonable, but constitutional. In other words, the act gave ample time to preserve all existing rights. . . . The only ground upon which this kind of legislation can be justified is that after the lapse of the statutory period the mortgage or other security is presumed to have been paid, or the ground rent extinguished. The payment of a mortgage and the extinguishment of a ground rent mean substantially the same thing. The act was not intended to destroy the ground landlord's ownership in the rent; it does not impair his title thereto; nor can it be said to impair the contract by which the rent was reserved, but from well-grounded reasons of public policy it declares that when the owner of such rent makes no claim or demand therefor for twenty-one years it presumes it has been extinguished, which means nothing more than that it has been paid. The language cited, as before observed, affects only the remedy; if it meant more it would be void for the excess.'
The same conclusion was reached by the supreme court of Pennsylvania in Wallace v. Fourth U. P. Church, 152 Pa. 258, 25 Atl. 520, where it was said that 'the purpose of the act of 1855 was to relieve titles and facilitate the sale of real estate. It [185 U.S. 55, 65] fixes upon an arbitrary period of twenty-one years as that over which the search of a purchaser or other person must extend, and beyond which it shall not be necessary for him to look. If for twenty-one years no payment upon or acknowledgment of the ground rent can be shown, and no demand for payment has been made, the act conclusively presumes a release and extinguishment of the encumbrance by the act of the parties, and declares that the rent shall thereafter be irrecoverable.' In that case the ground rent had been reserved long before the passage of the act of April 27, 1855, and it was held that as twenty-one years and ten months had elapsed without the payment of rent, or demand for the same, the right to demand it was extinguished.
So, in the present case, where no payment or demand was shown to have been made for more than twenty-one years, it was held that, in view of the numerous and repeated decisions, the question must be considered at rest. Clay v. Iseminger, 187 Pa. 108, 41 Atl. 38.
We are therefore of opinion that the Supreme Court of Pennsylvania did not err in holding that the 7th section of the act of April 27, 1855, was constitutionally applicable, and its judgment is affirmed.