charge under a subsequently enacted insolvent law of that state was no bar to the action. In Ogden v. Saunders,"1 the plaintiff being a citizen of Kentucky and the defendant a citizen of New York, the contract having been made in New York to be performed in that state, and the action having been brought in a federal court in the state of Louisiana, it was held that a discharge under an antecedently-enacted insolvent law of the state of New York was no bar to the action; and in Shaw v. Robbins,72 the same ruling was made, the action being brought in a court of the state of Ohio, the plaintiff being a citizen of Massachusetts, the defendant a citizen of New York, and the discharge set up being one that had been obtained under an antecedently-enacted insolvent law of the last-mentioned state. In Boyle v. Zacharie,73 Story, J., said, "The effect of the discharge under the insolvent act is of course at rest, so far as it is covered by the antecedent decisions made by this court. The ultimate opinion delivered by Mr. Justice Johnson in the case of Ogden v. Saunders," was concurred in and adopted by the three judges, who were in the minority upon the general question of the constitutionality of state insolvent laws, so largely discussed in that case," and 75 Marshall, C. J., expressed the same view as to the effect of the judgment in Ogden v. Saunders. In Sudyam v. Broadnax,76 the action having been brought in a court of the state of Alabama, the plaintiff being a citizen of New York, it was held that a judicial declaration of the insolvency of a decedent's estate under the terms of an antecedently

71 12 Wheat. 213.
72 12 Wheat. 369, note.

73 6 Pet. 643.

74 12 Wheat. 213, 358.

75 P. 635.

76 14 Pet. 67.

enacted statute of Alabama was powerless to discharge a contract made by the decedent in his lifetime in New York and stipulated to be performed in that state. In Cook v. Moffat," the action being brought in a federal court in the state of Maryland, the plaintiff being a citizen of New York and the defendant a citizen of Maryland, and the contract having been made in New York to be performed in that state, it was held that a discharge under an antecedently-enacted statute of Maryland was no bar to the action. In Baldwin v. Hale,78 the action having been brought in a federal court in the state of Massachusetts, the plaintiff being a citizen of Vermont and the defendant a citizen of Massachusetts, and the contract having been made in Massachusetts, to be performed in that state, it was held that a discharge under an antecedently-enacted statute of Massachusetts did not bar the action. The result of the cases is, that a discharge under the insolvent laws of a state is not a bar to an action on a contract for the payment of money, first: when the law under which the discharge has been granted has been enacted subsequently to the making of the contract; 79 second: when, although the discharge has been granted under a law enacted antecedently to the making of the contract, the contract was made in another state to be performed in that other state; third: when, although the discharge has been granted under a law enacted antecedently to the making of the contract, and although the contract was made and to be performed in the state in which the discharge has been granted, the action upon the contract is brought in another state, by a party who is not a citizen of the state

80

775 How. 295.

78 1 Wall. 223.

79

Sturges v. Crowninshield, 4 Wheat. 122; F. & M. Bank v. Smith, 6 id. 131.

80

McMillan v. McNeill, 4 Wheat. 209; Cook v. Moffat, 5 How. 295.

granting the discharge, and who has not made himself a party to the proceedings in insolvency; 81 and fourth, when, although the discharge has been granted under a law enacted antecedently to the making of the contract, and although the contract was made and to be performed in the state in which the discharge has been granted, the action upon the contract is brought in the state granting the discharge by one who is not a citizen of that state, and who has not made himself a party to the proceedings in insolvency.82 The questions, as yet not concluded by the authority of the court, are as to the effect of the discharge as regards creditors, who, though not citizens of the state granting the discharge, voluntarily become parties to the insolvency proceedings, or, who, being citizens of the state granting the discharge, and being duly notified of the insolvency proceedings, neglect or refuse to become parties thereto.

Judgments as contracts.

63. Contracts for the payment of money being within the protection of the constitutional prohibition of the impairment of their obligation, judgments upon such contracts are equally entitled to protection.83 Therefore, a judgment against a municipal corporation founded upon a breach of contract is not affected by a subsequent legislative abolition of the municipality's power to levy taxes for the payment of its debts.84 But the rights of a judgment creditor are not impaired by a state statute reducing

81

Ogden v. Saunders, 12 Wheat. 213; Shaw v. Robbins, ibid. 369, note. See also Denny v. Bennett, 128 U. S. 489.

82 Baldwin v. Hale, 1 Wall. 223.

8 Blount v. Windley, 95 U. S. 173.

$4

'Memphis v. U. S., 97 U. S. 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; Scotland County Court v. U. S., 140 id. 41.

the rate of interest thereafter to accrue upon existing judgments; 85 nor are judgments founded upon torts contracts whose obligation will be protected against subsequent legislation.86

Municipal taxation.

64. A state cannot take away from a municipality existing powers of taxation so as to deprive of his compensation an officer who has served his term.87 County bonds issued by public officers under authority of law either upon the subscription, or upon the agreement to subscribe, to the stock of a railway constitute a contract between the county and the bondholders, whose obligation cannot be impaired by a subsequent legislative repeal of the statute authorizing the subscription, or by a subsequent amendment to the state constitution prohibiting such a subscription.88 But where public officers are by statute authorized to issue bonds in aid of railway construction only upon the fulfilment of a condition precedent which is not fulfilled before the adoption of an amended state constitution prohibiting the issue of such bonds there is no contract whose obligation is impaired by the adoption of the state constitution.89 On the same principle, a statutory authorization of borrowing of money by a municipality is not a contract between the state and the municipal creditors whose obligation can be impaired by the subsequent exercise by the state of the power of modifying the rate of taxation or of exempting certain property from taxation,90 but a state

85 Morley v. L. S. & M. S. Ry., 146 U. S. 162.

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

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

88 County of Moultrie v. Rockingham T. C. S. Bank, 92 U. S. 631.

89 R. Co. v. Falconer, 103 U. S. 821.

"Gilman v. Sheboygan, 2 Bl. 510.

cannot dissolve an existing municipal corporation having a bonded debt, for whose payment powers of taxation have been granted and specifically pledged, for that dissolution interferes with the exercise of such power of taxation.91 Nor can a state withdraw or restrict the taxing power of a municipality so as to impair the obligation of contracts which have been made on the pledge, express or implied, that that taxing power shall be exercised for their fulfilment.92 A statutory prohibition of the issuing by the courts of the state of a mandamus to compel the levying of a tax for the payment of the interest upon, or the principal of, municipal bonds, whose issue had been legally authorized, impairs the contract between the municipality and the bondholder.93 In general, the statutory authorization of the contracting by a municipality of an extraordinary debt by the issue of negotiable securities therefor conclusively implies a power in the municipality to levy taxes sufficient to pay the accruing interest upon, and the matured principal of, the debt, unless the statute conferring the authority, or the constitution of the state, or some general law in force at the time, clearly manifests a contrary legislative intent.94

History of the prohibition.

65. It has never been doubted that contracts between individuals were protected by the constitutional provision, but it was formerly a matter of grave doubt whether or not contracts to which a state was a party were likewise

"Mobile v. Watson, 116 U. S. 289. But see Meriwether v. Garrett, 102 id. 472.

* Memphis v. U. S., 97 U. S. 293; Wolff v. New Orleans, 103 id. 358; Ralls County Court v. U. S., 105 id. 733; Nelson v. St. Martin's Parish, 111 id. 716; Seibert v. Lewis, 122 id. 284; Scotland County Court v. U. S., 140 id. 41.

Louisiana v. Pilsbury, 105 U. S. 278.

"Ralls County Court v. U. S., 105 U. S. 733.