The seventh section of the Act of Pennsylvania of April 27,
1855, is as follows:
"That in all cases where no payment, claim, or demand shall have
been made on account of or for any ground rent, annuity, or other
charge upon real estate for twenty-one years, or no declaration or
acknowledgment of the existence thereof shall have been made within
that period by the owner of the premises, subject to such ground
rent, annuity, or charge, a release or extinguishment thereof shall
be presumed, and such ground rent, annuity, or charge shall
thereafter be irrecoverable:
Provided, That the evidence
of such payment may be perpetuated by recording in the recorder of
deeds' office of the proper county the duplicate of
Page 185 U. S. 56
any receipt therefor, proved by oath or affirmation to be a true
copy of that signed and delivered in the presence of the payer and
witnessed at the time by this deponent, which recorded duplicate or
the exemplification of the record thereof shall be evidence until
disproved, and the evidence of any such claim or demand may be
perpetuated by the record of any judgment recovered for such rent,
annuity, or charge in any court of record, or the transcript
therein filed of any recovery thereof by judgment before any
alderman or justice of the peace, which record and judgment shall
be duly indexed:
Provided, That this section shall not go
into effect until three years from the passage of this act."
Held that this was not an act or law impairing the
obligation of contracts within the meaning of the Constitution of
the United States.
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 described 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 seventh section of an Act of
the
Page 185 U. S. 57
Commonwealth of Pennsylvania of April 27, 1855, in terms as
follows:
"That in all cases where no payment, claim, or demand shall have
been made on account of or for any ground rent, annuity, or other
charge upon real estate for twenty-one years, or no declaration or
acknowledgment of the existence thereof shall have been made within
that period by the owner of the premises subject to such ground
rent, annuity, or charge, a release or extinguishment thereof shall
be presumed, and such ground rent, annuity, or charge shall
thereafter be irrecoverable:
Provided, That the evidence
of such payment may be perpetuated by recording in the recorder of
deeds' office of the proper county the duplicate of any receipt
therefor, proved by oath or affirmation, to be a true copy of that
signed and delivered in the presence of the payer and witnessed at
the time by the deponent, which recorded duplicate or the
exemplification of the record thereof, shall be evidence until
disproved, and the evidence of any such claim or demand may be
perpetuated by the record of any judgment recovered for such rent,
annuity, or charge in any court of record, or the transcript
therein filed of any recovery thereof by judgment before any
alderman or justice of the peace, which records and judgments shall
be duly indexed:
Provided, That this section shall not go
into effect until three years from the passage of this act."
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 seventh section of the
Act of April 27, 1855, was unconstitutional within the tenth
section of Article I 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.
Thereafter the case came on for trial before the court and a
Page 185 U. S. 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
seventh section of the Act of April 27, 1855, was unconstitutional,
because it impairs the contract reserving the rent, and was
inhibited by the tenth section of Article I 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. JUSTICE Shiras delivered the opinion of the Court.
The question for determination in this case is whether the
seventh 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
Pennsylvania,
Page 185 U. S. 59
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 W. & 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:
"Yielding and paying therefor and thereout to unto the said
Alexander Osbourne, his heirs and assigns, the yearly rent or sum
of seventy-two dollars, lawful money of the United States, in
half-yearly payments on the first day of April and October every
year hereafter forever, without any deduction, defalcation, or
abatement for any taxes, charges, or assessments whatsoever to be
assessed as well on the said hereby-granted premises as on the said
yearly rent hereby and thereout reserved. The first half-yearly
payment thereof to be made on the first day of October, 1854, and,
on default of paying the said yearly rent on the days and time and
in manner aforesaid, it shall and may be lawful for the said
Alexander Osbourne, his heirs and assigns, to enter into and upon
the said hereby-granted premises or any part thereof, and into the
buildings thereon to be erected, and to distrain for the said
yearly rent so in arrears and unpaid, without any exemption
whatsoever, any law to the contrary thereof in anywise
notwithstanding, and to proceed with and sell such distrained
goods
Page 185 U. S. 60
and effects, according to the usual course of distresses, for
rent charges. But if sufficient distress cannot be found upon the
said hereby-granted premises to satisfy the said yearly rent in
arrear and the charges of levying the same, then and in such case
it shall and may be lawful for the said Alexander Osbourne, his
heirs and assigns, into and upon the said hereby-granted lot and
improvements wholly to reenter, and the same to have again,
repossess, and enjoy as in his and their first and former estate
and title in the same and as though this indenture had never been
made,"
etc.
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:
"Those only who are accustomed to make or read briefs of title
in Philadelphia, going back to the times of the first settlement,
know how frequently occur ancient rent charges and ground rents,
which the owners of the present day never heard of, and which
generally have no doubt been honestly extinguished; while making
this note, the writer has such a single brief before him for an
opinion, in which no less than three such charges occur as
blemishes, grants, or reservations more than a century ago, which
no person living has any knowledge of."
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
Page 185 U. S. 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?
"Laws for the preservation and promotion of peace, good order,
health, wealth, education, and even general convenience are
supported under the police power of the state. Under these laws,
personal rights, rights of property, and freedom of action may be
directly affected, and men may be fined, imprisoned, and
restrained, and property taken, converted, and sold away from its
owner. The principle of such laws is most easily perceived and
recognized when men are held liable for nuisances, acts, and
negligences affecting the health and safety of society, when the
marriage contract is dissolved, and when property is subjected to
charges and sales for matters affecting the public interest and
welfare. Beyond this is a wide domain of general convenience where
the power is likewise exercised. Thus, estates held in joint
tenancy and common may be divided among the tenants, even by
conversion and sale; life estates and remainders may be separated
from each other; qualified inheritances expanded into absolute
fees, and contingent and executory interests extinguished. What
greater reason has the owner of an irredeemable ground rent, coming
down from a former generation, to complain [than] . . . the owner
of a remainder or reversion, or of some contingent or executory
interest?"
C. J. Agnew, in
Palairet's Appeal, 67 Pa. 497.
"Notwithstanding the protection which the law gives to vested
rights, it is possible for a party to debar himself of the
Page 185 U. S. 62
right to assert the same in the courts by his own negligence or
laches. If one who is dispossessed be negligent for a long and
unreasonable time, the law refuses afterwards to lend him any
assistance to recover the possession merely, both to punish his
neglect, . . . and also because it is presumed that the supposed
wrongdoer has in such a length of time procured a legal title --
otherwise he would sooner have been sued. Statutes of limitation
are passed which fix upon a reasonable time within which a party is
permitted to bring suit for the recovery of his rights, and which,
on failure to do so, establish a legal presumption against him that
he has no rights in the premises. Such a statute is a statute of
repose. Every government is under obligation to its citizens to
afford them all needful legal remedies; but it is not bound to keep
its courts open indefinitely for one who neglects or refuses to
apply for redress until it may fairly be presumed that the means by
which the other party might disprove his claim are lost in the
lapse of time."
Cooley on Limitations, 6th ed. 44;
Bell v.
Morrison, 1 Pet. 351;
Leffingwell v.
Warren, 2 Black 606.
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
Page 185 U. S. 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 on Limitations 451.
Thus, in
Terry v. Anderson, 95 U. S.
628, it was said per Chief Justice Waite:
"This Court has often decided that statutes of limitation
affecting existing rights are not unconstitutional if a reasonable
time is given for the commencement of an action before the bar
takes effect.
Hawkins v. Barney, 5 Pet.
457;
Sohn v. Waterson, 17 Wall.
596."
"It is difficult to see why, if the legislature may prescribe a
limitation where none existed before, it may not change one which
has already been established. The parties to a contract have no
more a vested interest in a particular limitation which has been
fixed than they have in an unrestricted right to sue. They have no
more a vested interest in the time for the commencement of an
action than they have in the form of the action to be commenced,
and as to the forms of action or modes of remedy, it is well
settled that the legislature may change them at its discretion,
provided adequate means of enforcing the right remain."
"In all such cases the question is one of reasonableness, and we
have therefore only to consider whether the time allowed in this
statute is, under all the circumstances, reasonable. Of that the
legislature is primarily the judge, and we cannot overrule the
decision of that department of the government, unless a palpable
error has been committed. In judging of that, we must place
ourselves in the position of the legislators, and must measure the
time of limitation in the midst of the circumstances which
surrounded them, as nearly as possible; for what is reasonable in a
particular case depends upon its particular facts."
Turner v. New York, 168 U. S. 90;
Saranac Land & Timber Co. v. Roberts, 177 U.
S. 318.
In
Korn v. Browne, 64 Pa. 57, this question was
considered, and it was said, per Read, J.:
Page 185 U. S. 64
"The seventh 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.
In
Biddle v. Hooven, 120 Pa. 225, 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 seventh 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, where it was said that
"the purpose of the act of 1855 was to relieve titles and
facilitate the sale of real estate. It
Page 185 U. S. 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.
We are therefore of opinion that the Supreme Court of
Pennsylvania did not err in holding that the seventh section of the
Act of April 27, 1855, was constitutionally applicable, and its
judgment is
Affirmed.
