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of slaves; 40 nor could a state, after the restoration of peace, declare void a contract made between its citizens during the war of the rebellion stipulating for payment in confederate notes; 41 nor can a state, after the making of a contract, change to the prejudice of either party the measure of damages for its breach; 42 nor can a state, by subsequent legislation, impose as a condition precedent to the legal enforcement of a contractual right, that he who seeks to enforce that right shall prove an extrinsic and independent fact that has no necessary connection with the right to be enforced, as, for instance, that he never bore arms in support of, or never aided, the rebellion against the United States; 43 or that he has paid certain taxes; nor can it permit the defendant to set off damages not caused by the plaintiff, as, for instance, the defendant's loss of property resulting from the war of the rebellion; ** nor can a state, after a judgment has been enrolled, materially increase the debtor's exemption; nor can a state after the making of a mortgage enlarge the period of time allowed for the redemption after foreclosure; 46 nor forbid a sale in foreclosure at which less than two-thirds of the value of the mortgaged premises as fixed by appraisement shall be realized; nor take away the right to compound interest, if given by the law existing at the time of the making of the contract; 48 nor

44

40 White v. Hart, 13 Wall. 646.

"Delmas v. Insurance Co., 14 Wall. 661.

42

47

Effinger v. Kenney, 115 U. S. 566; W. & W. R. v. King, 91 id. 3. "Pierce v. Carskadon, 16 Wall. 234.

"Walker v. Whitehead, 16 Wall. 314.

45 Gunn v. Barry, 15 Wall. 610.

45

46 Barnitz v. Beverly, 163 U. S. 118. See also Bradley v. Lightcap, 195 id. 1; cf. Hooker v. Burr, 194 id. 415.

Bronson v. Kinzie, 1 How. 311; McCracken v. Hayward, 2 id. 608; Gantly v. Ewing, 3 id. 707.

"Koshkonong v. Burton, 104 U. S. 668; cf. Morley v. L. S. & M. S. Ry., 146 id. 162.

CONTRACTS

repeal a statute in force at the time of making the contract which renders the stock of a shareholder liable for the debts of the corporation; 49 nor materially change the rules of evidence which were in existence when the contract was made.50

The term "contracts" defined.

61. The term "contracts," as used in the constitutional prohibition, includes both executory and executed contracts,51 comprehending, within the former class, promissory notes and bills of exchange,52 corporate bonds,58

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61"Contract" is, as Field, J., said in Louisiana v. Mayor of New Orleans, 109 U. S. 285, 288, "used in the Constitution in its ordinary sense as signifying the agreement of two or more minds for consideration proceeding from one to the other to do or not to do certain acts." In Sturges v. Crowninshield, 4 Wheat. 122, 197, Marshall, C. J., said: "A contract is an agreement in which a party undertakes to do or not to do a particular thing." Marshall, C. J., said, in Fletcher v. Peck, 6 Cr. 87, 136: "A contract is a compact between two or more parties, and is either executory or executed. An executory contract is one in which a party binds himself to do, or not to do, a particular thing. . . . A contract executed is one in which the object of contract is performed, and this, says Blackstone, differs in nothing from a grant. Since then, in fact, a grant is a contract executed, the obligation of which still continues, and since the Constitution uses the general term 'contracts,' without distinguishing between those which are executory and those which are executed, it must be construed to comprehend the latter as well as the former.'' In Dartmouth College v. Woodward, 4 Wheat. 629, Marshall, C. J., said: "The provision of the Constitution never has been understood to embrace other contracts than those which respect property or some object of value and confer rights which may be asserted in a court of justice." Daniel, J., said, in Butler v. Pennsylvania, 10 How. 402, 416: "The contracts designed to be protected.. are contracts by which perfect, certain, definite, fixed, private rights of property are vested.''

52 Sturges v. Crowninshield, 4 Wheat. 122; McMillan v. McNeill, ibid. 209; Farmers & Mechanics' Bank v. Smith, 6 id. 131; Ogden v. Saunders, 12 id. 213; Boyle v. Zacharie, 6 Pet. 635; Suydam v. Broadnax, 14 id. Cook v. Moffat, 5 How. 295; Baldwin v. Hale, 1 Wall. 223.

67;

5 State Tax on Foreign-held Bonds Case, 15 Wall. 300.

municipal bonds,5 and municipal contracts for the payment of the salaries of their employes 55 and, generally, all legally enforcible contracts to do, or not to do, any particular act; and, within the latter class, grants and judgments founded upon contracts,56 but not judgments founded upon torts; nor is marriage a contract which may not be impaired by divorce legislation."

57

58

There can be no impairment of the obligation of a contract which has not been legally made.59 Thus a vote of the majority of the qualified voters of a county at an election held under a statute incorporating a railway and authorizing an issue of the bonds of the county in payment for the stock of the railway, if the qualified voters so decide it, does not constitute a contract whose obligation would be impaired by an amendment of the state

54

County of Moultrie v. Rockingham T. C. S. Bank, 92 U. S. 631; Mobile v. Watson, 116 id. 289. But see Meriwether v. Garrett, 102 id. 472.

65 Fisk v. Jefferson Police Jury, 116 U. S. 131.

56 Blount v. Windley, 95 U. S. 173; Memphis v. U. S., 97 id. 293; Wolff v. New Orleans, 103 id. 358; Louisiana v. Pilsbury, 105 id. 278; Ralls County Court v. U. S., ibid. 733; Nelson v. St. Martin's Parish, 111 id. 716; Mobile v. Watson, 116 id. 289; cf. Morley v. L. S. & M. S. Ry., 146 id. 162.

57 Louisiana v. New Orleans, 109 U. S. 285; Freeland v. Williams, 131 id. 405.

58 Hunt v. Hunt, 131 U. S. clxv; Maynard v. Hill, 125 id. 190.

69

'Aspinwall v. Daviess County, 22 How. 364; Morgan v. Louisiana, 93 U. S. 217; Wadsworth v. Supervisors, 102 id. 534; Norton v. Board of Comrs. of Brownsville, 129 id. 479; Lake County v. Rollins, 130 id. 662; Lake County v. Graham, ibid. 674; Campbell v. Wade, 132 id. 34; Pleasant Township v. A. L. I. Co., 138 id. 67; New Orleans v. N. O. W. W., 142 id. 79; H. G. L. Co. v. Hamilton City, 146 id. 258; I. C. R. v. Illinois, ibid. 387; Bier v. McGehee, 148 id. 137; Citizens' S. & L. Assn., v. Perry County, 156 id. 692; Woodruff v. Mississippi, 162 id. 291; C. M. L. I. Co. v. Spratley, 172 id. 602; Los Angeles v. L. A. W. Co., 177 id. 558; Weber v. Rogan, 188 id. 10; Zane v. Hamilton County, 189 id. 370; U. R. v. City of New York, 193 id. 416; cf. C., M. & St. P. Ry. v. Solan, 169 id. 133; Gunnison County Comrs. v. Rollins, 173 id. 255; H. & T. C. R. v. Texas, 177 id. 66; Waite v. Santa Cruz, 184 id. 302; Tulare Irr. Dist. v. Shepard, 185 id. 1.

constitution,60 or by a repeal of the statute,61 before the subscription be made or the bonds issued. So, also, bonds which are fraudulently put into circulation by a state treasurer after they have been declared void by the state constitution cannot impose any liability upon the state.62 And a contract which is void because its execution is beyond the powers of the municipality 63 or county 64 attempting its execution cannot irrevocably bind the municipality or county. Moreover a state cannot enter into an irrepealable contract by a conveyance of property in disregard of a public trust under which it is bound to hold and manage that property, as in the case of a conveyance of soil under navigable waters.65 On the same principle, a state statute which is void by reason of repugnancy to the Constitution of the United States cannot constitute a contract of exemption from state taxation; as, for instance, a statute imposing taxation on national banks to an extent not permitted by the National Banking Act, and, therefore, a subsequent state statute imposing on national banks a taxation which, though a heavier burden than that imposed by the earlier statute, is yet within the limits

'Aspinwall v. Daviess County, 22 How. 364.

61 Wadsworth v. Supervisors, 102 U. S. 534; cf. Campbell v. Wade, 132 id. 34.

2 Bier v. McGehee, 148 U. S. 137.

"Norton v. Board of Comrs. of Brownsville, 129 U. S. 479; Pleasant Township v. A. L. I. Co., 138 id. 67.

"Lake County v. Rollins, 130 U. S. 662; Lake County v. Graham, ibid. 674; Zane v. Hamilton County, 189 id. 370; cf. Gunnison County Comrs. v. Rollins, 173 id. 255; H. & T. C. R. v. Texas, 177 id. 66.

"I. C. R. v. Illinois, 146 U. S. 387, 460. Two justices took no part in the decision and three justices dissented. See also I. C. R. v. Illinois, 184 id. 77; M. T. Co. v. Mobile, 187 id. 479. In Pearsall v. G. N. Ry., 161 id. 646, where a charter authorizing the consolidation of railways was modified by a statute prohibiting the consolidation of competing roads, before any such consolidation had been attempted, the court said: "We cannot recognize a vested right to do a manifest wrong." And see L. & N. R. v. Kentucky, 183 id. 503, 518.

permitted by the National Banking Act, does not impair the obligation of any contract.66 On the same principle, a statutory exemption from state taxation, if granted in violation of the constitution of the state, does not bind the state as a contract.67

State insolvent laws.

69

62. There was, for some time, a controversy as to the effect of the constitutional prohibition upon state insolvent laws. In Sturges v. Crowninshield,68 the action being brought in a federal court within the state of Massachusetts, and the plaintiff being a citizen of Massachusetts, and the defendant a citizen of New York, it was held that a discharge under an insolvent law of New York, enacted subsequently to the making within that state of a contract to be performed within the state, was void as an impairment of the obligation of that contract. In McMillan v. McNeill, the action being brought in a court of the state of Louisiana, the plaintiff and defendant both being citizens of South Carolina, and the contract having been made and stipulated to be performed in that state, it was held that a discharge under an antecedently-enacted law of Louisiana impaired the obligation of the contract, and was no bar to its enforcement. In F. & M. Bank v. Smith,70 the action being brought in a court of the state of Pennsylvania, and both plaintiff and defendant being residents of that state, and the contract having been made, and to be performed, in that state, it was held that a dis

"People v. Commissioners of Taxes, 94 U. S. 415.

"Trask v. Maguire, 18 Wall. 391; Morgan v. Louisiana, 93 U. S. 217; Shields v. Ohio, 95 id. 319; R. Cos. v. Gaines, 97 id. 697; K. & W. R. v. Missouri, 152 id. 301; P. I. Co. v. Tennessee, 161 id. 193; G. & S. I. R. v. Hewes, 183 id. 66; cf. Lake County v. Graham, 130 id. 674.

68 4 Wheat. 122.

69 4 Wheat. 209. 70 6 Wheat. 131.

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