The bonds of Iowa City were taken up and cancelled before the commencement of this action, but previous to such cancellation the coupons for interest due on the 1st of January, 1860, upon which the action is brought, were detached and negotiated to other parties until by purchase they came to the possession of the plaintiff. The statute of Iowa prescribes the limitation of ten years to actions on all written contracts, whether under seal or otherwise.
The simple question, therefore, presented for our determination is whether the statute is a bar to an action upon the coupons detached from the bonds and transferred to parties other than the holders of the bonds, when it would not be a bar to an action on the bonds themselves had they not been cancelled.
The counsel for the plaintiff cites the case of The City of Kenosha v. Lamson, reported in the 9th of Wallace, and the case of The City of Lexington v. Butler, reported in the 14th of Wallace, as conclusive against the bar of the statute. There are expressions in the opinions of the court in those cases which, detached from the context, would seem to justify this conclusion. But the whole purport of the decisions in those cases was to the effect that the coupons being given for interest on the bonds, partook of their nature and were equally high as security, and therefore the statute could only run against them when it would run against instruments of the dignity of the bonds. In other words, the decisions only established the doctrine that the coupons so far partook of the nature of the bonds that as the latter were specialties so were they specialties also, and not mere simple contracts.
The first case, that of The City of Kenosha v. Lamson, arose in Wisconsin, where actions upon sealed instruments are not barred until the lapse of twenty years, whilst actions upon simply contracts are barred in six years. The action was brought upon the coupons when more than six years but less than twenty years had elapsed after their maturity. And the court held that the coupons were substantially copies of the bond in respect to the interest, and were given to the holder of the bond for the purpose of enabling him to collect the interest at the time and place mentioned, without the trouble of presenting the bond every time the interest became due, and to enable him to realize the interest by negotiating the coupons in business transactions; and that the coupons partaking of the nature of the bonds, which were of higher security than the coupons, were not barred by lapse of time short of twenty years. The court concluded its opinion by observing that it would be a departure from the purpose for which the coupons were issued, and from the intent of the parties, to hold that when they are cut off from the bonds the nature and character of the security changes and becomes a simple contract debt and adds: 'Our conclusion is that the cause of action is not barred by lapse of time short of twenty years.'
The case of The City of Laxington v. Butler arose in Kentucky, where the statute prescribes fifteen years as the limitation for actions on bonds and only five years for actions on simple contracts. The action was upon coupons of certain bonds issued by the city, and the city pleaded the statute of limitations of five years, but the court answered that bonds were specialties not falling within the period prescribed; that suits on bonds might be maintained if commenced within fifteen years after the cause of action accrued, and that a suit upon a coupon was not barred by the statute unless the lapse of time was sufficient to bar also a suit upon the bond, as the coupon, if in the usual form, was but a repetition of the bond in respect to the interest for the period of time therein mentioned, and partook of its nature.