Berg v. Berg

• Decision Date: 21 January 1936
• Docket Number: 43163.
• Citation: 264 N.W. 821,221 Iowa 326
• Parties: BERG v. BERG et al.
• Court: Iowa Supreme Court

264 N.W. 821

221 Iowa 326

BERG v. BERG et al.

No. 43163.

Supreme Court of Iowa.

January 21, 1936

Appeal from District Court, Polk County; A. A. Herrick, Judge.

The holder of a judgment obtained in a real estate mortgage foreclosure proceedings obtained an execution and on the judgment more than two years after the entry thereof, and garnished a debtor of the person against whom the judgment was entered who moved to dismiss the garnishment on the ground that the execution was issued in violation of the terms of chapter 178, Acts of the 45th General Assembly. There was a resistance challenging the constitutionality of the act as applied to a judgment existing at the time of its passage. The trial court entered judgment against the garnishee and determined that the judgment on which the execution was based was not affected by the act.

Reversed.

Mark C. Reno and John N. Hughes, Jr., both of Des Moines, for appellants.

Lappen, Carlson & Clarke and Emerett C. Hansen, all of Des Moines, for appellee Fred E. Berg.

Fey H Moody, of Des Moines, for appellee Gillespie.

POWERS, Justice.

Fred E Berg, plaintiff appellee, obtained a judgment in a real estate mortgage foreclosure proceedings on January 24, 1930, against the defendants appellants, Frank W. Berg and Mayme E. Berg. Thereafter, the mortaged premises were sold under special execution and the proceeds credited on the judgment on March 8, 1930, leaving a deficiency on that date of approximately $2,900. Subsequently, and on September 21, 1934, Fred E. Berg procured a general execution on this judgment and garnished A. C. Ruble, an appellee herein. The garnishment was challenged by the defendant on the ground, among others, that the issuance of the execution was improper because in violation of the provisions of chapter 178, Acts of the 45th General Assembly. Plaintiff, by resistance, alleged that the act was not applicable, and that if applicable, was unconstitutional. There was also a question before the trial court as to whether Ruble was indebted to the defendants at the time the garnishment was served, but the correctness of the court's ruling on that question of fact is not challenged here.

I.

The question of the application of the statute to a judgment obtained before its passage has been determined by this court adversely to the claim of plaintiff appellee. In Johnson v. Keir, 261 N.W. 792, 793, we held that the act applied to a judgment in existence at the time of its passage.

II.

There remains for consideration only the question of the constitutionality of the statute. The statute was passed in April, 1933, and the part assailed provides that " From and after January 1, 1934, no judgment in an action for the foreclosure of a real estate mortgage or deed of trust or in any action on a claim for rent or judgment assigned by a receiver of a closed bank or rendered upon credits assigned by the receiver of a closed bank when the assignee is not a trustee for depositors or creditors of the bank shall be enforced and no execution issued thereon and no force or vitality given thereto for any purpose other than as a set-off or counter claim after the expiration of a period of two (2) years from the entry thereof." Section 1. The grounds of attack on the validity of this statute which have any application to the situation will be separately considered.

It is claimed that the statute impairs the obligation of contract and violates the contract clause of the Federal Constitution (article 1, § 10, cl. 1). The statute has to do only with the time within which judgments may be enforced. Judgments are not contracts in the ordinary sense. They lack the essential elements of a contract. There are no mutual promises or mutual obligations in a judgment. The obligation of a judgment does not arise from any meeting of the minds of the parties. The Supreme Court of the United States has held that a judgment is not a contract within the meaning of the contract clause of the Constitution. In Morley v. Lake Shore, etc., Ry. Co., 146 U.S. 162, 13 S.Ct. 54, 57, 36 L.Ed. 925, that court said: " The judgment is not itself a contract within the meaning of the constitutional provision. * * * The most important elements of a contract are wanting. There is no aggregatio mentium. The defendant has not voluntarily assented or promised to pay." But even though it be regarded as a contract and a part of the original contract on which the judgment was based, it is not impaired by the statute assailed. The statute does not reduce in any way the rights which attach to the ownership of a judgment, but it does place a limitation on the time within which that right must be exercised. It is essentially a statute of limitations. Statutes of limitation are uniformly held not to offend against the contract clause of the Federal Constitution so long as they leave to the holder of a contract a reasonable time in which to enforce it. Statutes of limitation are statutes of repose and peace. No one has a right to continue to keep a community embroiled and a court clogged for all time with vain efforts to enforce contract rights. So long as reasonable opportunity is afforded, there is no offense against the constitutional provision. In Turner v. State of New York, 168 U.S. 90, 18 S.Ct. 38, 40, 42 L.Ed. 392, the Supreme Court of the United States said: " It is well settled that a statute shortening the period of limitation is within the constitutional power of the legislature, provided a reasonable time, taking into consideration the nature of the case, is allowed for bringing an action after the passage of the statute, and before the bar takes effect."

In Gilfillan v. Union Canal Co., 109 U.S. 401, 3 S.Ct. 304, 306, 27 L.Ed. 977, the same court again said: " As to statutes of limitations, it has always been held that shortening the time within which actions on existing contracts must be brought impairs no obligation of the contract, if a reasonable time is given to bring a suit before the bar attaches."

In Wooster v. Batemen, 126 Iowa 552, 102 N.W. 521, 522, this court said: " That the Legislature may amend a statute of limitations, either shortening or extending the time within which an existing cause of action may be barred, without violating the constitutional prohibition against the passage of any law impairing the obligation of contracts, if a reasonable time is given for the commencement of an action before the bar takes effect, is settled by the united voice of authority." And further: " A statute requiring the prompt enforcement of a right does not deprive the litigant of that right, nor lessen or change the remedy."

The statute in question places a two-year limitation upon the time during which judgments which come within the provisions of the act must be enforced. As to judgments which were rendered before its passage, the act recognizes that the two-year period may have run or so nearly run that some special provision should be made to enable such holders to enforce their judgments. So the act provides that it shall not become effective as a bar to the enforcement of judgments until January 1, 1934, nearly nine months after its passage. No claim is made that the further time thus provided for the enforcement of such judgments is not a reasonable time. No showing in that respect was attempted. The particular judgments affected by the act all belong to a class where there has been some special opportunity to collect or effort to collect either on the judgment or on the claim on which the judgment is based, as will hereinafter be more particularly pointed out. Less time has been held to be reasonable. See note, 49 A.L.R. 1263. Under such circumstances, it cannot be said that there is any violation of the contract clause.

III.

It is also claimed that the act as applied to judgments in existence at the time of its adoption violates the due process clause of the Fourteenth Amendment to the Constitution of the United States. This necessarily presupposes that the holder of the judgment has a vested interest or right amounting to a property right in the remedy afforded for the enforcement of the judgment at the time the judgment is obtained. The argument is that the taking away of that remedy, or some part thereof summarily and by legislative fiat, is, therefore, a taking of property without due process of law. But a citizen does not ordinarily acquire any vested interest amounting to a property right in a remedy which a statute affords. The Supreme Court of the United States in Terry v. Anderson, 95 U.S. 628, 633, 24 L.Ed. 365, said: " 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."

If this were not so, changes in remedial statutes, such as statutes of limitation, could never be made applicable to rights in existence when the statute was adopted. Yet it is quite generally and universally held that such statutes may be applied to existing rights without violating the due process clause if a reasonable time is allowed for the enforcement of the right after the passage of the statute and before the bar of the statute becomes effective. Cooley, in his work on Constitutional Law, page 340, says: " A statute of limitation takes away no right of property. Such a statute prescribes a reasonable time within which a party claiming legal rights which another withholds shall commence legal proceedings for...