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The same prohibitory clause in the constitution came again under discussion in the case of Green v. Biddle. It was observed by the court, that the objection to a law, on the ground of its impairing the obligation of contracts, could never depend upon the extent of the change which the law effects in it. Any deviation from its terms, by postponing or accelerating the period of performance which it prescribes, imposing conditions not expressed in the contract, or dispensing with the performance of those which are expressed, however minute or apparently immaterial in their effect upon the contract, or upon any part or parcel of it, impairs its obligation. Upon this principle it is, that if a creditor agrees with his debtor, to postpone the day of payment, or in any other way to change the terms of the contract, without the consent of the surety, the latter is discharged, although the change was for his advantage.
The material point decided in that case was, that a compact between two states was a contract within the constitutional prohibition. The terms contract and compact were synonymous, and a contract is an agreement of two or more parties to do or not to do certain acts. The court declared, that the doctrine had been already announced and settled, that the constitution embraced all contracts executed and executory, and whether between individuals, or between a state and individuals; and that a state had no more power to impair an obligation into which she herself had entered, than she had to impair the contracts of individuals.
Another case which led to a very extensive inquiry into the operation and effect of the constitutional prohibition upon the states not to pass laws, impairing the obligation of contracts, was that of Sturges v. Crowninshield. The defendant was sued in one of the federal courts upon two promise sory notes, given in March, 1811, and he pleaded his discharge under an insolvent act of New-York, passed in April,
a 8 Wheaton, 1.
6 4 Wheaton, 122.
1811. This insolvent act was retrospective, and discharged the debtor upon his single petition, and upon his surrendering his property in the manner therein prescribed, without the concurrence of any creditor, from all his preexisting debts, and from all liability and responsibility by reason thereof.
The chief justice, in the opinion which he delivered on behalf of the court, adınitted, that until Congress exercise the power to pass uniform laws on the subject of bankruptcy, the individual states may pass bankrupt laws, provided those laws contain no provision violating the obligation of contracts. It was admitted, that the states might by law discharge debtors from imprisonment, for imprisonment was no part of the contract, but only a means of coercion. It was also admitted, that they might pass statutes of limitation, for such statutes relate to the remedy, and not to the obligation of the contract. It was further stated by the court, that the insolvent laws of far the greater number of the states only discharged the person of the debtor, and left the obligation to pay in full force, and to this the constitution was not opposed. But a law which discharged the debtor from his contract to pay a debt by a given time, without performance, and released him, without payment, entirely from any future obligation to pay, impaired, because it entirely discharged, the obligation of that contract, and, consequently, the discharge of the defendant, under the act of 1811, was no bar to the suit.
The court held, that the obligation of a contract was not fulfilled by a cessio bonorum, for the parties had not merely in view the property in possession when the contract was made, but its obligation extended to future acquisitions; and to release them from being liable, impaired the obligation of the contract. There was a distinction, in the nature of things, between the obligation of a contract, and the remedy to enforce that obligation, and the latter might be modified, as the wisdom of the legislature should direct. But the constitution intended to restore and preserve public confi
dence completely. It intended to establish a great principle, that contracts should be inviolable.
The case in which this decision was made, was one in which the contract was existing when the law was passed ; and the court said, that their opinion was confined to the
A distinction has been taken between the case of a contract made before, and one made after, the passing of the act. It was taken by the Supreme Court of New-York, in Mather v. Bush, and by the chief justice of Massachusetts, in Blanchard v. Russell, and was relied on as a sound distinction by the Court of Chancery of New-York, iu Hicks v. Hotchkiss. The doctrine of these cases is, that an insolvent act in force when the contract was made, did not, in the sense of the constitution, impair the obligation of that contract, because parties to a contract have reference to the existing laws of the country where it is made, and are presumed to contract in reference to those laws. It is an implied condition of every contract, that the party shall be absolved from its performance if the event takes place which the existing law declares shall dispense with the performance. The decision in Sturges v. Crowninshield, is supposed to be consistent with that distinction, when it establishes the principle, that an insolvent act discharging a debtor from his contract existing when the law passed, so that his future acquisitions could not be touched, is unconstitutional, and the discharge obtained under it void.
But the Supreme Court of the United States, in M Millan v. MI Veill,' went a step farther, and held, that a discharge under a state insolvent law existing when the debt was contracted, was equally a law impairing the obligation of contracts, and equally within the principle declared in Sturges v. Crowninshield. This was a discharge under the insolvent law of a different government from that in which the contract was made. It remains yet to be settled, whether it be lawful for a state to pass an insolvent law which shall be effectual to discharge the debtor from a debt contracted after the passing of the act, and contracied within the state making the law. The general language of the court would seem to reach even this case; but the facts in the cases decided do not cover this ground, and the cases decided are not authority to that extent. It will be perceived, that the power of the states over this subject is, at all events, exceedingly narrowed and cut down ; and as the decisions now stand, the debt must have been contracted after the passing of the act, and the debt must have been contracted within the state, and between citizens of the state, or else a discharge will not extinguish the remedy against
a 16 Johnson's Rep. 233. b 13 Mass, Rep. 1.
C7 Johnson's Ch. Rep. 297. d 4 Wheaton, 209.
the future property of the debtor." Cersio bono And while on this point, it may not be amiss to observe, rum. that the cessio bonorum of the Roman law, and which
prevails at present in most parts of the continent of Europe, only exempted the person of the debtor from imprisonment. It did not release or discharge the debt, or exempt the future acquisitions of the debtor from execution for the debt. The English statute of 32 Geo. II., commonly called the Lords' act, and the more recent English statutes of 33 Geo. III., 1 Geo. IV., 3 Geo. IV., and 5 Geo. IV., have gone no further than to discharge the debtor's person ;
a In Smith v. Parsons, 1 Hammond's Ohio Rep. 236., and in Hempstead v. Read, 6 Conn. Rep. 480. the power of the states over contracte, was understood and declared to be confined within the precise limits mentioned in the text. See also vol. 2. In Satterlee v. Matthewson, 2 Peters' U. S. Rep. 380. the Supreme Court of the United States held, that no part of the constitution of the United States applied to a state law which devested rights which were vested by law in an individual, provided its effect be not to impair the obligation of a contract. It was further held, that retrospective laws were not within the constitutioual prohibition, provided they did not impair the obligation of contracts, or partake of the character of cr post facto laws. It has also been decided that a state government may tax state banks, eo nomine, at discretion, and that it would not be a violation of the contracts creating the banks. Providence Bank v. Billings, 4 Peters' U, S. Rep. 514.
and it may be laid down as the law of Germany, France, Holland, Scotland, England, &c. that insolvent laws are not more extensive in their operation than the cessio bonorum of the civil law. In many parts of Germany, as we are informed by Huberus and Ileineccius," a cessio bonorum does not even work a discharge of the debtor's person, and much less of his future property. The cession under the Roman law did not extend to protect the debtor from personal responsibility, for penalties accruing on the commission of crimes. Si in ære non habeat, in pelle luit. But in Germany the cessio bonorum has the severe operation of depriving the insolvent of his remedy for a personal trespass, committed prior to the cession, so far as pecuniary compensation is in question.
(5.) No state can pass naturalization laus.
By the constitution of the United States, Congress have Nostate can power to establish a uniform rule of naturalization. It ization laws. was held, in the Circuit Court of the United States, at Pbiladelphia, in 1792, in Collet v. Collet," that the state governments still enjoyed a concurrent authority with the United States upon the subject of naturalization, and that though they could not contravene the rule established by Congress, or “exclude those citizens who had been made such by that rule, yet that they might adopt citizens upon easier terms than those which Congress may deem it expedient to impose.” But though this decision was made by two of the judges of the Supreme Court, with the concurrence of the district judge of Pennsylvania, it is obvious, that this opi
a Code 7.71. 1. Dig. 42. 3. 4. & 6. Voet ad Pand, 42. 3. 8. Heineccii Opera, tom. 5. p. 620. tom. 6. 384. 387. Code de Commerce, No. 568. Repertoire Universel et Raisonné de Jurisprudence, par Merlin, tit. Cession de Biens. Esprit des Loix, tom. 1. 114. 2 Bell's Comm. 580—597. 16 Johnson's Rep. 244. note.
b Hub. Prælec. tom. 2. 1454. Heinec. Elem. Ju. Civ, secund ord. Pand. p. 6. 1. 42. tit. 3. Elem. Jur. Ger. lib. 2. tit. 13. sec. 387.
c Voet ad Pand. 42. 3. 10. d 2 Dallas, 294.