§ 627 c. The state of Louisiana provided for funding her bonds at reduced rates and on certain terms. A subsequent statute prohibited the funding of all questionable obligations, and specially designated bonds issued to aid the construction of a certain canal, some of which bonds were held by plaintiff. In an action, not to recover the contents of the bonds, but a bill asking that plaintiffs be allowed to refund them, it was held that the plaintiff had the same right to enforce payment as he ever possessed, and that the statute did not allow these bonds to be refunded, and did not impair the obligation of any contract. "We think," say the court, "the state had the right to say, when it proposed a scheme for the compromise of its debts, what creditors should be included." 1 § 627 d. When a contract is made with a municipal corporation upon the faith that taxes will be levied, a statute repealing or modifying the taxing power of the municipality, so as to deprive the holder of the contract of all adequate and efficacious remedy, is within the inhibition of the Constitution. Thus, a party held a judgment which he asked to have enforced by proceedings which were authorized by legislation existing at its date, but subsequently repealed. Whether the repeal was effectual depended upon the question whether the judgment was founded on a contract whose obligation the state could not impair. "By the obligation of a contract," said Field, J., "is meant the means which, at the time of its creation, the law affords for its enforcement. The usual mode by which municipal bodies obtain the funds to meet their pecuniary engagements is taxation. Accordingly, when a contract is made upon the faith that taxes will be levied, legislation repealing or modifying the taxing power of the corporation, so as to deprive the holder of the contract of all adequate and efficacious remedy, is within the constitutional inhibition. The court is authorized to inquire into the cause of action on which the judgment was founded, to see if it was on a contract, and if so, whether the obligation of such contract has been impaired.” 1 Guaranty Co. v. Board of Liquidation, 105 U. S. 622. ED. 2 Louisiana v. St. Martin's Parish, 111 U. S. 716. ED. § 627 e. This subject was carefully examined in the late case of Edwards v. Keazey, 96 U. S. 595 (1877), in which it was held that the Constitution of North Carolina of 1868, exempting personal property to the amount of $500, and a homestead of the value of $1,500, from execution, was unconstitutional, and Mr. Justice Swayne, in his opinion, made some observations which so strongly support the views stated in the text, that we may be pardoned for quoting them here. He there said: "A contract is the agreement of minds, upon a sufficient consideration, that something specified shall be done, or shall not be done. The lexical definition of 'impair' is to make worse; to diminish in quantity, value, excellence, or strength; to lessen in power; to weaken; to enfeeble; to deteriorate.' Webster's Dict. Obligation' is defined to be the act of obliging or binding; that which obligates; the binding power of a vow, promise, oath, or contract,' etc. Ibid. The word is derived from the Latin word obligatio, tying up; and that from the verb obligo, to bind or tie up; to engage by the ties of a promise or oath or form of law; and obligo is compounded of the verb ligo, to tie or bind fast, and the preposition ob, which is prefixed to increase its meaning." Blair v. Williams, and Lapsley v. Brashears, 4 Litt. (Ky.) 65. . The obligation of a contract includes everything within its obligatory scope. Among these elements nothing is more important than the means of enforcement. This is the breath of its vital existence. Without it, the contract, as such, in the view of the law, ceases to be, and falls into the class of those "imperfect obligations," as they are termed, which depend for their fulfilment upon the will and conscience of those upon whom they rest. The ideas of right and remedy are inseparable. Want of right and want of remedy are the same thing. 1 Bac. Abr. tit. Actions in General, letter B. In Von Hoffmann v. City of Quincy (4 Wall. 535), it was said: "A statute of frauds embracing preëxisting parol contracts not before required to be in writing would affect its validity. A statute declaring that the word 'ton' should, in prior as well as subsequent contracts, be held to mean half or double the weight before prescribed, would affect its construction. A statute providing that a previous contract of indebtment may be extinguished by a process of bankruptcy would involve its discharge; and a statute forbidding the sale of any of the debtor's property under a judgment upon such a contract would relate to the remedy." It cannot be doubted, either upon principle or authority, that each of such laws would violate the obligation of the contract, and the last not less than the first. These propositions seem to us too clear to require discussion. It is also the settled doctrine of this court, that the laws which subsist at the time and place of making a contract enter into and form a part of it, as if they were expressly referred to or incorporated in its terms. This rule embraces alike those which affect its validity, construction, discharge, and enforcement. Von Hoffman v. City of Quincy, supra; McCracken v. Hayward, 2 How. 508. In Green v. Biddle (8 Wheat. 1), this court said, touching the point here under consideration: "It is no answer, that the acts of Kentucky now in question are regulations of the remedy, and not of the right to the lands. If these acts so change the nature and extent of existing remedies as materially to impair the rights and interests of the owner, they are just as much a violation of the compact as if they overturned his rights and interests." "One of the tests that a contract has been impaired is, that its value has by legislation been diminished. It is not by the Constitution to be impaired at all. This is not a question of degree, or manner, or cause, but of encroachment in any respect on its obligation, dispensing with any part of its force." Planters' Bank v. Sharp, et al. 6 How. 301. It is to be understood that the encroachment thus denounced must be material. If it be not material, it will be regarded as of no account." Similar views were expressed by Mr. Justice Field in Louisiana v. New Orleans, 102 U. S. 203. He there says: "The obligation of a contract, in the constitutional sense, is the means provided by law by which it can be enforced, - by which the parties can be obliged to perform it. Whatever legislation lessens the efficacy of these means impairs the obligation. If it tend to postpone or retard the enforcement of the contract, the obligation of the latter is to that extent weakened. The Latin proverb, qui cito dat, bis dat, - he who gives quickly gives twice, has its counterpart in a maxim equally sound, — qui serius solvit, minus solvit, - he who pays too late pays less. Any authorization of the postponement of payment, or of means by which such postponement may be effected, is in conflict with the constitutional inhibition." But it was in the same case held, that the particular act of Louisiana in question, No. 5 of 1870, was not of this character, merely in requiring judgments against the city to be registered; a duty not required at the time the contract was made upon which the judgment was recovered. § 627 f. A singular question on this subject arose in the late case of New Orleans v. Morris, 105 U. S. 600. A city, which owned water-works, conveyed them to a corporation formed for the purpose of maintaining and enlarging them, and received therefor shares of stock, which the statute authorizing the conveyance declared should not be liable to seizure for the debts of the city, but should be reserved for the benefit of the holders of the bonds that had been issued by the city to raise the means wherewith to construct the works. It was held that as the water-works themselves, when owned by the city, were exempt from execution, the statute did not, by thus exempting those shares from seizure, impair the obligation of any contract, as they merely represent the city's ownership in the water-works, which was, before the enactment of the statute, exempt from seizure and sale. § 627 g. The Virginia Coupon Cases. The whole subject of impairing the obligation of contracts has been most carefully considered in a series of recent cases called "The Virginia Coupon Cases," which may be briefly stated thus. In 1871 the State of Virginia passed an act known as the "Funding Act," by which bonds were issued, with coupons attached, declaring on their face that the coupons should be “receivable, at and after maturity, for all taxes, debts, dues, and demands due the state." And in the first case it was held that where a creditor of the state took such bonds in discharge of his prior debt, a contract was thereby consummated between the state and the holder of the bonds and the coupons, from which the state could not release herself by legislation without their consent. The first case which arose under this act was that of Hartman v. Greenhow, 102 U. S. 672 (1880), in which the holder of coupons which had been detached from the bonds and were held by a separate party were tendered by him in payment of his taxes due the state. The collector refused to receive them unless he deducted from the coupons the tax due on the bonds themselves, according to a law passed in 1882, after the bonds had been issued. It was held that the later law was invalid against the holder of the coupons, as impairing the obligation of the contract contained on the face of the coupons; and a mandamus was awarded to compel the treasurer to receive the coupons without deducting the tax on the bonds, and Mr. Justice Field said: : "We are clear that this act of Virginia of 1876 (sect. 17), requiring the tax on her bonds, issued under the Funding Act of March 30, 1871, to be deducted from the coupons originally attached to them, when tendered in payment of taxes or other dues to the state, cannot be applied to coupons separated from the bonds and held by different owners, without impairing the contract with such bondholders contained in the Funding Act, and the contract with the bearer of the coupons." 1 The same general proposition was again affirmed in Antoni v. Greenhow, 107 U. S. 769 (1882), but the decision in this case practically annulled the former on an entirely different ground. For after the former decision the state of Virginia passed a law that when a coupon holder applied for a mandamus, the treasurer should answer he was ready to receive the coupons as soon as their genuineness was estab 1 See also Antoni v. Wright, 22 Gratt. 833; Wise v. Rogers, 24 Gratt. 169; Clarke v. Tyler, 30 Gratt. 134. ED. |