Amy v. Dubuque

• Decision Date: 01 October 1878
• Citation: 25 L.Ed. 228,98 U.S. 470
• Parties: AMY v. DUBUQUE
• Court: U.S. Supreme Court

98 U.S. 470

25 L.Ed. 228

AMY v. DUBUQUE.

October Term, 1878

ERROR to the Circuit Court of the United States for the District of Iowa.

The facts are stated in the opinion of the court.

Submitted on printed arguments by Mr. James Grant for the plaintiff in error, and by Mr. O. P. Shiras for the defendant in error.

MR. JUSTICE HARLAN delivered the opinion of the court.

The question of limitation presented for our consideration upon this writ of error depends for its solution upon the statutes of Iowa. 'It is not to be questioned,' said this court in Hawkins et al. v. Barney's Lessee (5 Pet. 457), 'that laws limiting the time of bringing suit constitute a part of the lex fori of every country: they are laws for administering justice, one of the most sacred and important of sovereign rights.' McElmoyle v. Cohen, 13 Pet. 312.

It as is little to be questioned that 'the courts of the United States, in the absence of legislation upon the subject by Congress, recognize the statutes of limitations of the several States, and give them the same construction and effect which are given by the local tribunals.' Leffingwell v. Warren, 2 Black, 599; Green v. Lessee of Neal, 6 Pet. 291; Harpending v. The Dutch Church, 16 id. 455; Davie v. Briggs, 97 U. S. 628.

Guided by these established rules, we proceed to the consideration of the question before us, in the light both of the statutes of Iowa and of the construction given to them by the highest court of that State.

Our first inquiry is as to the cause of action set out in the petition. The plaintiff in error seeks to recover the amount of sundry interest-coupons annexed to bonds issued by the city of Dubeque in 1857, in payment of a subscription to the capital stock of a railroad company. The bonds are in the usual form of municipal securities, and were made payable on the 1st of January, 1877, at a bank in the city of New York, together with interest thereon at the rate of ten per cent per annum, payable semi-annually on each first day of July and January, on the presentation and surrender of the coupons at such bank as they should respectively become due by the terms thereof. Each bond was secured by a pledge of the shares of stock received in exchange therefor; and the stock pledged was placed in the hands of authorized trustees, who were empowered and required, at the request of the holder of the bond, and when the city was in default in the payment of either principal or interest, or any part thereof, to sell it, at public or private sale, in discharge of the unpaid principal or interest. The coupons sued on had not, at the institution of this action, been severed from the bonds to which they were annexed. Judgment is asked for the several instalments of interest, with interest on each instalment from the time it became due. The city contends that the action is barred by the Iowa Statute of Limitations. In that view the circuit judge concurred, and judgment was rendered for the city.

The code of Iowa declares that actions 'founded on written contracts' may be brought within ten years 'after their causes accrue, and not afterwards.' Code of 1873, sect. 2529. Such had been the law of that State for many years prior to the adoption of the code of 1873. We find the same provision in the code of 1851. Code of 1851, sect. 1659. What actions are founded on written contracts, and when causes of action accrue, within the meaning of the Iowa code, may be gathered from decisions of the Supreme Court of that State. The earliest decision to which we are referred is Bahr v. Arndt, 9 Iowa, 39. That was the case of a mortgage executed to secure a note payable ten years after date, with interest, at the rate of ten per cent per annum from date, payable annually. The court held that a foreclosure could be had before the maturity of the note for an instalment of interest due. In Mann v. Cross (9 id. 327), which was a suit to foreclose a mortgage, given to secure a note bearing ten per cent interest, payable annually, the court said: 'Was he [the mortgagee] entitled to six per cent interest upon the interest annually due? We think he was. The respondent was under a legal obligation to pay this interest at the end of the year; it was a sum of money then due, without a contract fixing the rate of interest upon it, and for which he might have been sued. He was, therefore, bound to pay its legal value, which by our law, in the absence of a written agreement reserving more, is fixed at six cents on the hundred.' Hershey v. Hershey (18 id. 24) was the case of a written agreement to purchase an interest in mill property at a valuation by appraisers, and 'to pay the principal sum of such purchase on or before five years from the date of the appraisement, and in the mean time to pay interest for the full sum at the rate of seven per cent per annum, the interest to be paid semi-annually.' It was held that an action at law could be maintained for any unpaid semi-annual instalment of interest. Said the court: 'The payment of interest periodically is expressly stipulated for, and for a breach of this contract plaintiff may recover, just as clearly as for the non-payment of an instalment of principal. By their agreement the parties have made this interest, when it matures, not simply an incident of the debt, but pro tanto the debt itself. And plaintiff was not, therefore, bound to wait the expiration of the five years from the date of the award to recover for the semi-annual instalment of interest.' The court said further: 'The plaintiff sues at law for the interest precisely as if he had separate notes for the same, and as he might do in case of an ordinary bond.' To the same general effect is Preston v. Walker, 26 id. 205. In the subsequent case of Baker v. Johnson County (33 id. 151), the inquiry arose as to the time when limitation commenced to run upon a contract whereby Baker was employed to render services in behalf of the county in connection with its claim against the general government for swamp-land money and land scrip. The court held that Baker had a right of action from the date when his services were completed, and that his cause of action accrued at that date. Callanan v. The County of Madison (45 id. 561) was an action to recover back taxes which had been improperly exacted. The defence of limitation being interposed, the court said that 'the cause of action accrues at the very moment of payment of the taxes, if at that time the tax was erroneous or illegal. The right of the plaintiff and the liability of the county do not depend upon the future acts to be done or suffered by either; their relation as creditor and debtor is fixed by the illegality of the tax.'

It seems from these authorities to be the settled law of Iowa: 1st, That where interest is, by contract, made payable at stated times, an action may be maintained therefor in advance of the maturity of the...