In re Brown

135 U.S. 701 | SCOTUS | 1889

Mr. Justice Bradley,

continuing, delivered the opinion of the court.

The passage of a new statute of limitations, giving a shorter time for the bringing of actions than existed before, even as applied to actions which had accrued, does not necessarily affect the remedy to such an extent as to impair the obligation of the contract within the meaning of the Constitution, provided a reasonable time is given for the bringing of such actions.- This subject has been considered in a number of cases by this court, particularly in Terry v. Anderson, 95 U. S. 628, 632, and Koshkonong v. Burton, 104 U. S. 668, 675, where the prior cases are referred to. In Terry v. Anderson, Chief Justice Waite, speaking for the court, said : “ 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; Jackson v. Lamphire, 3 Pet. 280; Sohn v. Waterson, 17 Wall. 596; Christmas v. Russell, 5 Wall. 290; Sturges v. Crowninshield, 4 Wheat. 122. 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. . . . 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.”

The court in that case held that the period of nine months and seventeen days given to sue upon a cause of action which had already been running nearly four years, was not unconstitutional. The liability in question was that of a stockholder under an act of incorporation for the ultimate redemption of the bills of a bank which had become insolvent by the disaster of the civil war. The legislature of Georgia, on the 16th of March, 1869, passed a statute requiring all actions against stockholders in shch cases to be brought by or before the 1st of January, 1870.

In the case of Koshkonong v. Burton, the suit was brought upon bonds of the town of Koshkonong issued January 1, 1857, with interest coupons attached. The coupons matured at different dates from 1858 to 1877. The action was brought on' the 12th of May, 1880, and the question was whether the action as to the coupons maturing more than six years before the commencement of the suit was barred by the statute of limitations of Wisconsin. In March, 1872, an act was passed to limit the time for the commencement- of actions againsi towns, counties, cities and villages, on demands payable to bearer. It provided that no action brought to recover money on any bond, coupon, interest warrant, agreement or promise in writing made by any town, county, city or village, or upon any instalment of the principal or interest. thereof, shall be maintained unless the action be commenced within six years from the time when such money has or shall become due, when the same has been made payable to bearer or to some person or bearer, or to the order of some person, or to some person or his order; provided, that any such action may be brought within one year, after this act shall take effect. This court,speaking by Mr. Justice Harlan; said: “It was undoubtedly within the Constitutional power of the legislature to require, as to existing causes of action, that, suits for their enforcement should be barred unless brought within'a period less "than that prescribed at the time the contract was made or the liability incurred from which the cause of action arose. The exertion of this power is, of course, subject to the fundamental condition that a reasonable time, taking all the circumstances' into consideration, be given by the new law for the comméncement of an action before the bar takes effect. Whether the first proviso in' the act of 1872, as "to some causes of action, especially in- ifs applicationvto citizen^ of other States holding -negotiable municipal securities, is, or not, in violation of that condition, is a question of too much practical importance and' delicacy to justify us in considering if unless its determination be essential to the ^disposition of the case, in hand'; and we think it is mot.” The case was decided>without determining the question referred to.

A question of the same nature frequently arises upon statutes which require the registry of conveyances and other instruments within a limited period prescribed, and making them void, either absolutely or in their operation as against third persons, if not recorded within such time. Such laws, as applied to conveyances and other instruments in- existence at the time of their passage, are, of course, retrospective in their character, -and may operate very oppressively if a reasonable time be not given for the registry required. This subject was discussed in the case of Vance v. Vance, 108 U. S. 514, Mr. Justice Miller delivering the opinion of the court, where the prior cases were adverted to and commented upon. The- same rule applies in those cases as in reference to statutes of limitation, namely, that the time given for the act to be done must be a reasonable time, otherwise it would be unconstitutional and void.

It is evident from this statement of the question that no one rule as to the length of time which will be deemed reasonable can be laid down for the government of all cases alike. Different circumstances will often require a different rule. What would be reasonable in one class of cases would be entirely unreasonable in another.

- It is necessary, therefore, to look at the nature and circumstances of the case before us, and of the class- of cases to., which it belongs. The primary obligation of the State with regard to the coupons attached to the bonds issued under the act of 1871 was to pay them when they became due; but if they were not paid at maturity the alternative right was given to the holder of them to use them in the payment of- taxes, debts, dues and demands due to the State. The very nature of the case shows that such an application of the coupons could not be made immediately or in any very short period- of time. If all the bonds were of the denomination of one-thousand dollars each, it would require twenty thousand of them to make up the funded debt of twenty millions of dollars. These twenty thousand bonds would be likely to be scattered and dispersed through many States and countries, and it would be impracticable for the holders ,of them to use the coupons which the State should fail to pay in cash, in the alternative manner stipulated for in the contract, unless they had a reasonable time to dispose of them to taxpayers. No limitation of time was fixed by the act within which the coupons should be presented or tendered in payment of taxes or other demands. The presumption would naturally be that they could be used within an indefinite period, like bank bills. Under this condition of things, a statute of limitations giving to the holders thereof but a single year for the presentation in payment of taxes of the coupons then in their possession, perhaps never severed from the bonds to which they were attached, and- comprising all the coupons which had been originally attached thereto, seems, even at first blush, to be unreasonable and oppressive. Probably not one-tenth, if even so large a proportion, of the bondholders were taxpayers of the State of Virginia. The only way in which they could, within the year prescribed, utilize their coupons, the accumulation perhaps of years, would be to sell and dispose of them to the taxpayers. XIow this could be done, especially in.view of the -onerous laws which were passed with regard to the sale of coupons’ in the State, it is difficult to see. Under all the circumstances of the case, and the peculiar condition of the securities in question, we are-compelled to say that in our opinion the law is an unreasonable law and that it does materially impair the obligation of the contract.

We have spoken of the act as limiting, ’ indifferently, the time of tendering the coupons, and the time of commencing proceedings to ascertain their genuineness. Its terms relate only to .the latter; and as this proceeding cannot be instituted until the coupons have been tendered, the effect is, to make a tender necessary before the expiration of one year, which can often be done only within a few days, or even hours; since the taxes may become due in that short period, and not become due again until a year afterwards. This puts the unconstitutionally of the act beyond question.

Without further discussion of the subject, we conclude that

The judgment of the Circuit Court must be reversed, and the same is reversed accordingly, and the cause remanded for the purpose of such proceedings as may be required by law a/nd justice in conformity with this opinion.