Ogden v. Saunders. was said to be necessary to look, not merely at the great federal objects for which the constitution was ordained, but to the antecedent condition of the parties to the compact. They were sovereign states, with all the powers of municipal government, which they had long exercised; and with regard to this particular power of passing insolvent and bankrupt laws, they had been in the actual exercise of it, for many years before the adoption of the constitution, and even from the earliest colonial times. The English bankrupt laws, and the temporary acts which were occasionally passed by the British parliament for the relief of insolvent debtors, were not extended to the colonies. The several states had insolvent laws in force, at the adoption of the constitution, and they continued, after the adoption, to alter, revise and reenact those laws, manifestly unconscious that they had parted with this power. This was, indeed, no proof that they had not parted with it, if there was any other party having at once a right and an interest to make the objection. But the people of the Union, represented in congress, so far from contesting the power of the states over this matter, had never exercised the power of making bankrupt laws, except in a single instance, and then with an express saving of the state insolvent laws. Bankrupt Law of 1800, 61. (2 U. S. Stat. 36.) So, the people of the several states, represented in their respective local legislatures, had all exercised this power. Here, then, was a significant declaration of the people, that they had not parted with this power, in their state capacities; and that the grant of a similar authority, in their new capacity of a federal union, did not, by the mere grant of it, exclude the exercise of it by them, in their state capacities, at least, until superseded by a general and permanent law of congress. Contemporaneous construction had always been considered as of great weight in matters of constitutional law; and in the question relating to the power of congress *to establish such corporations as the Bank of the United States, was [*229 considered as decisive. There are only three cases in which the states are excluded from the exercise of any power antecedently possessed by them: 1. When a power is granted to congress in exclusive terms. 2. When the states are expressly prohibited from exercising it in a specific form. 3. When a power is granted to congress, the contemporaneous exercise of which by the states would be incompatible. It was not asserted on the other side, that the power now in question falls under either of the first two heads; no could it, by any fair course of reasoning, be shown to fall under the third head, of being an incompatible power, except when the incompatibility arises from its actual exercise by congress. The grant of the power of establishing "a uniform rule of naturalization," and "uniform laws on the subject of bankruptcies," being contained in the same clause, and expressed in similar terms, had justly been considered as subject to the same interpretation. Before the adoption of the constitution, the states had various incongruous rules of naturalization, and laws on the subject of bankruptcies, some of which discharged the person only of the debtor, and others his future acquisitions of property. Then came this provision of the constitution, which manifestly looks to the antecedent condition of things existing in the several states. The word uniform was significantly used, as applicable to that condition of things. In any other view, the expression has no peculiar meaning, and does not qualify the general grant of power; for all the laws of congress, on general subjects, are necessarily "uniform throughout the Ogden v. Saunders. United States." The censure of the state regulations, implied in the terins in which the power to correct them is given to congress, was pointed against their want of uniformity. The policy and necessity both of bankrupt and naturalization laws, was clearly recognised. The sole object of granting to congress any power over these subjects, was, to secure that uniformity which the conflicting regulations of the different states could not attain. But the terms in which the grant is conceived were not mandatory. Congress was left free to exercise it, or not, at its discretion; and the only *consequence of an actual exercise of the power by congress, was *230] to supersede, during such exercise, the state laws, so far as they conflict with the laws of congress. (a) 2. The clause relied upon as virtually abolishing this power, is found in a subsequent and remote section of the constitution, wherein, after an enumeration of certain specified laws which the states may not pass, it is added, "nor any law impairing the obligation of contracts." From this it was inferred, that the states cannot pass bankrupt laws, although the power is not exclusive in congress. The states may pass bankrupt laws, it had been said, provided they do not impair the obligation of contracts. But all bankrupt laws do impair the obligation of contracts; i. e., they discharge the debtor from his debts, without payment; and therefore, the states cannot pass them, even when the power is not actually exercised by congress. It had, however, been conceded, that they may pass insolvent laws, which discharge the person only, because these do not impair the obligation, but only affect the remedy. It had been said, they affect the remedy only, because they still leave the obligation entire, to be enforced against the future property of the debtor. But suppose, the state law should deny the creditor any power of coercion whatever, whether against the body or the estate of the debtor, it would still act upon the remedy only, and yet would strip the contract of all its binding efficacy, except merely that moral obligation, that scintilla juris, which, though it might form a sufficient consideration for a new promise, was in itself no ground of action. As the obligation of the contract does not depend upon municipal law, the withdrawal of all *231] the means of coercion which that law *gives, cannot impair the obligation, since it only takes away the remedy. Thus, according to this distinction between the right and the remedy, creditors are left completely at the mercy of state legislation, notwithstanding the boasted efficacy of this constitutional prohibition. But (it was asked) what is the true import of this clause, forbidding the states from passing "any law impairing the obligation of contracts ?" A contract is not merely that which the parties expressly stipulate. It is that also which the existing laws of the country where the contract is made, annex as conditions to it, at the time when it is formed. It had been (a) It may be exercised or declined, as the wisdom of that body shall decide. If, in the opinion of congress, uniform laws on the subject of bankruptcies ought not to be established, it does not follow, that partial laws may not exist, or that state legislation on the subject must cease. It is not the mere existence of the power, but its exercise, which is incompatible with the exercise of the same power by the states. It is not the right to establish these uniform laws, but their actual establishment, which is inconsistent with the partial acts." Sturges v. Crowninshield, 4 Wheat. 196. Ogden v. Saunders. 2 admitted, that a state might prohibit contracts altogether. If so, it may permit them, sub modo, with such conditions as it thinks fit to annex; and the parties who make a contract in that state, make it subject to the conditions. These conditions enter into the contract, and form a part of it, as completely as if they had been expressly stipulated by the parties themselves. These conditions are sometimes beneficial to one party, sometimes to the other sometimes they add to the contract, sometimes they diminish it. But in every instance, they receive the tacit assent of the parties, and are not considered as impairing the obligation of the contract. A. gives B. a bond for $1000, payable on demand. There is no stipulation for interest. But the law annexes the tacit condition that the obligee shall receive interest, and that at a certain fixed rate. So, in the contract of exchange, the drawer of a bill does not stipulate to pay it, if the drawee refuses. In the same manner, the liability of the indorser to the holder is implied by the law, and cannot be collected from the bill itself. Still less, is his right to be discharged for want of due notice of the dishonor of the bill, to be found in the written contract. But the law implies it, and, therefore, it might be said to impair the obligation of the actual contract between the parties, which contained no such condition. How did it happen, that this was not considered a violation of the constitution? It could only be, because the law of the place has annexed that condition to the contract, and made it as much a part of the contract, as if the parties had expressed it. The same principle applies to the custom of adding days of grace to *the [*232 specified time of payment in bills and notes, which are various in different countries, and make the contract of the parties, whatever the law of the place where the payment is to be made, says shall be the contract. Renner v. Bank of Columbia, 9 Wheat. 556. So, where the law of the place gives a peculiar remedy to the creditor on a bill or note, more summary and strict than in ordinary cases, the party shall be intended to have renounced the benefit of the ordinary law, and to have submitted himself to the extraordinary process provided for the particular case. Bank of Columbia v. Okely, 4 Wheat. 235. And so of many other cases, in which whatever is considered as discharging the contract by the law of the place. where it was made, or with a view to which it is made, is considered as discharging it everywhere else, in whatever jurisdiction the creditor may attempt to enforce it, although no such condition is expressed in the terms. of the contract itself. 2 Str. 733; Cooke's Bankrupt Law 314; 5 East 124; 3 T. R. 609; 1 East 6; 1 Dall. 188, 229. This proceeds, not upon the idea that the foreign law can impair the obligation of the contract, or the foreign court refuse to execute it, but that they will give the same effect to it which is given by the law and the courts of the country where it is made; they will regard that as the contract of the parties which the lex loci declares to be the contract of the parties. 3 Ves. jr. 449; i W. Bl. 257; 2 Burr. 1077 ; 1 Bos. & Pul. 138; 16 Johns. 233, 250; Huberus, Prælect. tom. 2, lib. 1, tit. 3; de Conflictu Legum, cited in note to 3 Dall. 370. So, in the present case, the contract being made in a state, where the local law, existing at the time, annexed to the contract the condition that, in certain events, beyond the control of the contracting parties, the contract should be discharged, the parties contracting in the place of the law, and with a knowledge of the law, are presumed to assent to it. Ogden v. Saunders. But it had been said, that if the local law be a part of the contract, so also is the constitution; this might be admitted, without in any manner affecting the question. The constitution does not define "the obligation of *233] contracts." It does not say, that the express stipulations of the *parties alone shall form the contract. The contract is formed of express and implied consent, of convention, and of law. The constitution contemplates it in its legal sense, and in all its parts. If, then, the local laws in force when the contract is made, form a part of the contract, this is the contract which the constitution says shall not be impaired. So that it was not the plaintiff in error who sought to impair the obligation of his contract. It was the creditor who would impair the obligation, by striking out of the contract one of the conditions annexed to it by the law of the place. Admitting, then, that the states could not pass bankrupt laws which shall discharge antecedent contracts, it did not follow, that they might not pass bankrupt laws, under which debts subsequently contracted might be discharged. In the latter case, the law annexes conditions to the express contract of the parties, to which it implies their assent. All the different restraints on state legislation which are associated in the same prohibitory clause, were intended to prevent certain unjust, oppressive and impolitic laws, both in civil and criminal matters. It had not been denied on the other side, that the prohibition of bills of attainder, and ex post facto laws, was exclusively aimed at acts retrospective, partial and unjust in their operation; and it would not be difficult to show, that none of the other prohibitions were intended to affect the sovereign power of the states over their civil and criminal codes, when exercised, as all legislative power ought to be exercised, by general, impartial and prospective regulations. The history of the times, and the contemporaneous expositions of the clause, at the formation. and adoption of the constitution, together with the subsequent judicial interpretations of it in cases which had since arisen, all concurred to prove, that the evils complained of, and the remedies meant to be applied for their correction, exclusively referred to legislative acts affecting vested rights, or past transactions. 5 Marsh. Life of Washington, 75, 85, 89, 259; 3 Ramsay's Univ. Hist. 46, 77; 2 Ramsay's Hist. of South Carolina, 440, 483; Journ. Fed. Convention 79, 227, 359; Virginia Debates 339; 3 Dall. 390; 1 Tuck. Bl. 312, app'x, part 1; The Federalist, No. 44; 1 State Papers 252; Secret Debates 70; 3 W. C. C. 318; 5 Hall's L. J. 530, 552; 1 Paine 79 ; 5 Binn. 362, 364; 13 Mass. 16; 3 Johns. 74; 16 Ibid. 233; 7 Johns. Ch. *234] 376. The history of the legislation *of the state whose acts were now under consideration, would afford a strong illustration of this topic of argument. A system of insolvent laws had existed in that state, with some short interruptions, for sixty years past; and subsequent to the adoption of the constitution, such laws had repeatedly passed the scrutiny of the council of revision, always composed of able statesmen and learned jurists, and in some instances, of those who had taken an active part in the formation of the constitution, without even a suggestion that these acts were prohibited by the clause in question. 16 Johns. 234, note a. In every instance in which this court had hitherto applied the prohibition to a state law, it was to some act operating upon antecedent existing contracts. Such, too, was the plain and obvious meaning of the words of the prohibition. How could any law be said to impair the obligation on a contract not in existence Ogden v. Saunders. when the law was passed? The obligation must first be contracted, before it can be impaired. Some right must be vested under a contract, before any party can have a right to complain of a law impairing its obligation. The party, who supposes himself to be injured, cannot complain of a law in existence when his contract was made, because (as had been shown) the law formed a part of that contract, and therefore, could not impair its obligation. It was asked, what is the contract, and what the obligation of the contract? And it was answered, that the contract was what the parties understood it to be, and they understood it as the law declares it to be. Whatever is expected on one side, and known to be expected on the other, is a part or condition of the contract. Paley's Moral Phil. 92, 106. The obligation of the contract is not the contract itself, but something arising out of it. The moral obligation is that which binds the conscience only. The legal obligation is that which the law imposes. It binds the con tracting party to do that which the law says he shall do, under [*235 certain contingencies which may arise. There is nothing of mere human institution (and it is with this that the constitution deals) which binds to the performance of any contract, except the laws under which that contract is made, and the remedies provided by them to enforce its execution. The insolvent acts form a part of those laws, and the remedies provided to enforce the contract. The obligation of a contract may be impaired, by interference in favor of the creditor, as well as in favor of the debtor. But here, the existing remedies secured to both by the law (which is the part of the contract) are preserved with integrity, and there is, consequently, no violation of the constitutional provision, which was intended equally to protect the rights of both debtor and creditor. Indeed, the proceedings under some of these laws are compulsory against the debtor, and force him to make a surrender and assignment of his property for the benefit of his creditors, on their application. Bankrupt and insolvent laws have existed, in various forms, in every age and every civilized and commercial country, as one of the means of securing a fair and impartial distribution of the effects of insolvents among all their creditors, or as a relief which society has found it necessary to extend to the honest debtor, who has become unable from misfortune to satisfy the demands of his creditors. The states have, therefore, the same right to pass these laws (supposing the power not to be exclusively vested in congress), which they have to pass laws of limitation, or usury, or divorce, or any other ordinary regulation respecting contracts. All these laws might be said to have the effect of impairing the obligations of contracts, since they alter, increase, lessen or diminish what would otherwise be the effect of the agreement of the parties, by annexing conditions. other and different from those expressed by the parties. If it were possible to suppose a commercial contract made independent of any of those regulations which the municipal code of every civilized country prescribes, it would be stripped of all these conditions, and reduced to the mere naked agreement of the parties, without any means of enforcing its performance. But the municipal law gives effect to the actual contract of *the parties, by implying a multitude of clauses and conditions, not expressed [*236 by them, and by providing adequate means to enforce it. Every municipal code contains a provision determining at what age a person shall be deemed |