Tracts

By article First, Section 10, Clause 1, of the Constitution of the United States “No state shall pass... any bill of attainder, ex poat facto law, or law impairing the obligation of contracts.” There has been much discussion as to the reasons which led the Convention of 1787 to the states from passing stay laws and bankrupt laws (Bradley, J., Union Pac. R. Co. v. U. S., 99 U. S. 745, 25 L. Ed. 496), and other acts which would interfere with private contracts or engagements previously formed. Stay laws to prevent the collection of debts had been passed in many of the states, especially in the South. In the. Dartmouth College Case, 4 Wheat. (U. S.) 518, 4 L. Ed. 629, Chief Justice Marshall said that he thought it more than possible that the convention had not intended by the clause to preserve the integrity of the charters of corporations. But in Pennsylvania the legisiature had revoked the charter of the College of Philadelphia and virtually confiscated its property by taking it away from its trustees and giving it to another set of trustees who were of the political party which controlled the legislature. The same legislature had annulled the charter of the Bank of North America to which it was hostile, and would have succeeded in wrecking it, if the bank had not had another charter from congress, and soon after obtained one from the state of Delaware. These acts of spoliation alarmed all men of property, and James Wilson, a Pennsylvania member of the convention, who had been interested in both the bank and the college, was most active in procuring the adoption of the clause. Fisher’s “Pennsylvania: Colony and Commonwealth” 375, 383; Fisher’s “Evolution of the Constitution” 262; Shirley’s “Dartmouth College Case” 213, 220; Alfred Russell’s Address before Grafton and Coos Bar Association of New Hampshire, 1895 (reprinted Am. Law Rev. vol. 30, p. 321). This article of the constitution forbids only the states to pass laws impairing the obligation of contracts, and there is no express provision prohibiting congress from passing such laws. It would seem, moreover, as some have argued, that there is an Implied power in congress to pass such laws, for we find in the constitution a number of general prohibitions in which both congress and the states are prohibited from passing bills of attainder and ex poat facto laws. The omission of the prohibition in one case and the expression of it in the other might seem to imply that the power to pass laws impairing the obligation of contracts remained in congress; and congress is expressly given power to pass bankrupt laws which impair the obligation of contracts between debtors and creditors; Sturges v. Crowninshield, 4 Wheat. (U. S.) 122, 4 L. Ed. 529; and with respect to this provision the argument expreaaio uniua eat exclusio alteriua may also be invoked as against a similar limitation of the power of congre.ss. So under the decisions of the supreme court, congress may issue notes as legal tender in satisfaction of antecedently contracted debts. But the general exercise of such a power by congress principle of sound legislation; Federalist No. 44. Bradley, J., In a dissenting opinion In the Sinking-Fund Cases' (Union Pac. R. Co. v. U. S.) 99 U. S. 746, 26 L. Ed. 496, took the same view of the origin of this provision, and said further that it fully explained the fact that no such inhibition was laid upon the national legislature, and he was further of opinion that the absence of such inhibition furnished no ground of argument in favor of the proposition that congress can pass arbitrary and despotic laws with regard to contracts any more than with regard to any other subject-matter of legislation. As to the power of congress to impair the obligation of a contract, see Hepburn v. Griswold, 8 Wall. (U. S.) 603, 622, 19 L. Ed. 513; Knox V. Lee, 12 Wall. (U. S.) 457, 20 L. Ed. 287 (and specially Clarkson N. Potter, arguendo at p. 601, and Strong, J., at p. 647) Juilllard V. Greenman, 110 U. S. 421, 4 Sup. Ct 122, 28 L. Ed. 204. The provision of the constitution is, however, not applicable to laws enacted by the states before the first Wednesday in March, 1789; Owings v. Speed, 5 Wheat (U. S.) 420, 6 L. Ed. 124. Contracts are made subject to the exercise of the rightful authority of the government and no obligation of a contract can defeat lawful government authority; Louisville & N. R. Co. V. Mottley, 219 U. S. 467, 31 Sup. Ct 265, 56 L. Ed. 297, 34 L. R. A. (N. S.) 671, where a contract to issue passes to a person for life could not be enforced after the passage of an act of congress forbidding the issue of passes by any common carrier engaged In Interstate commerce. An act of congress rendering contracts in regard to Interstate commerce Invalid does not Infringe the constitutional liberty of the citizen to make contracts; and an act otherwise constitutional is not unconstitutional under the Vth Amendment, as taking private property without compensation because It invalidates contracts between individuals which conflict.with the public policy declared in the act; id. In the application of this constitutional prohibition there is an exception to the general rule that the United States supreme court will accept the construction placed by a state court upon its, own constitution, when the question of contract or no contract Is presented in the construction of a state statute; in such case there is Imposed upon the United States supreme court the duty of exercising an independent judgment upon the question whether there is a contract, though it will lean towards the interpretation of the state court; Stearns v. Minnesota, 179 U. S. 223, 232, 21 Sup. Ct 73, 45 L. Ed. 162; Great Southern Fire Proof Hotel Co. v. Jones, 193 U. S. 632, 24 Sup. Ct 676, 48 L. Ed. 778. Where there Is no contract protected by the impairment clause, whether a statutory the decisions of the highest court of the state are binding; and it is only where an Irrepealable contract exists that it is the duty of the federal court to decide Ifor Itself whether a subsequent act Impairs the obligation of such contract; Wicomico County v. Bancroft, 203 U. S. 112, 27 Sup. Ct. 21, 61 L. Ed. 112, where it was held that a proviso in a state statute, taxing all property of railroads, that no Irrepealable contract of exemption shall be affected, must be construed as expressing the legislative intent to repeal all exemptions not protected by binding contracts beyond legislative control. Where the highest court of a state decided that bonds were invalid and the decision is in conformity with prior decisions, the bonds are not protected, having been Illegally Issued; Zane v. Hamilton County, 189 U. S. 370, 23 Sup. Ct. 638, 47 L. Ed. 858. Contracts made after a law la passed are made subject to it; Abilene Nat. Bank v. Dolley, 228 U. S. 1, 33 Sup. Ct. 409, 57 L. Ed. 707; Chicago, B. & Q. R. Co. v. Cram, 228 U. S. 70, 33 Sup. Ct 437, 67 L. Ed. 734. All contracts, whether executed or executory, express or implied, are within the prohibition; New Jersey v. Wilson, 7 Cra. (U. S.) 164, 3 L.. Ed. 303; Green v. Biddle, 8 Wheat. (U. S.) 1, 5 L. Ed. 547; Louisiana v. New Orleans, 109 U. S. 285, 3 Sup. Ct 211, 27 L. Ed. 936; State Tax on Forelgn-Held Bonds, 15 Wall. (U. S.) 300, 21 L. Ed. 179; and also judgments founded upon contracts; Wolff V. New Orleans, 103 U. S. 358, 26 L. Ed. 395; Warren v. Stoddart, 105 U. S. 228, 26 L. Ed. 1117; Ralls County v. U. S., 105 U. S. 733, 26 L. Ed. 957. A violation of the prohibition may be by city ordinance; Cumberland Telephone & Telegraph Ck>. v. City of Memphis, 198 Fed. 956, citing New Orleans Waterworks Co. v. Refining Co., 125 U. S. 18, 31, 8 Sup. Ct 741, 31 L. Ed. 607; St Paul Gaslight Co. v. St Paul, 181 U. S. 142, 21 Sup. Ct 675, 45 L. Ed. 788; or any action of a municipality exercising delegated legislative power; Grand Trunk W. R. Co. v. City of South Bend, 227 U. S. 644, 33 Sup. Ct. 303, 67 L. Ed. 633; or to the action of any state instrumentality exercising such delegated authority as a railroad commission; Grand Trunk Western R. Co. V. R. R. Commission, 221 U. S. 400, 31 Sup. Ct. 637, 55 L. Ed. 786; Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct 67, 63 L. Ed. 150; to lapd grants of a state; Mc Gehee v. Mathis, 4 Wall. (U. S.) 143, 18 L. Ed. 314; or by state legislature; Terret v. Taylor, 9 Cra. (U. S.) 43, 3 L. Ed. 660; Pawlet v. Clark, 9 Cra. (U. 8.) 292, 3 L. Ed. 735; Frankjin County Grammar School V. Bailey, 62 Wt 467, 20 Atl. 820, 10