to be taken into the account may have taken place before the law was passed. In such case, it is the second or subsequent offence that is punished, not the first;2 and the act would be void if the offence to be actually punished had been committed before it had taken effect, even though it was after its passage.3

Laws impairing the Obligation of Contracts.

The Constitution of the United States also forbids the States passing any law impairing the obligation of contracts. It is remarkable that this very important clause was passed over almost without comment during the discussions preceding the adoption of that instrument, though since its adoption no clause which the Constitution contains has been more prolific of litigation, or given rise to more animated and at times angry controversy. It is but twice alluded to in the papers of the Federalist; 5 and though its great importance is assumed, it is evident that the writer had no conception of the prominence it was afterwards to hold in constitutional discussions, or of the very numerous cases to which it was to be applied in practice.

The first question that arises under this provision is, [*274] What is a contract in the sense in which the word is here employed? In the leading case upon this subject, it appeared that the legislature of Georgia had made a grant of land, but afterwards, on an allegation that the grant had been obtained by fraud, a subsequent legislature had passed another act annulling and rescinding the first conveyance, and asserting the right of the State to the land it covered. "A contract," says Ch. J. Marshall, 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. Such was the law under which the conveyance was made by the governor. A contract executed is one in which the object of the contract is performed; and this, says Blackstone, differs in nothing from a grant. The contract between Georgia and the purchasers was executed by the grant. A

1 Rand v. Commonwealth, 9 Grat. 738; Ross's Case, 2 Pick. 165; People v. Butler, 3 Cow. 347.

2 Rand v. Commonwealth, 9 Grat. 738. 4 Const. art. 1, § 10.

3 Riley's Case, 2 Pick. 172.

Federalist, Nos. 7 and 44.

contract executed, as well as one which is executory, contains obligations binding on the parties. A grant, in its own nature, amounts to an extinguishment of the right of the grantor, and implies a contract not to reassert that right. A party is, therefore, always estopped by his own 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 contract,' 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. A law annulling conveyances between individuals, and declaring that the grantors should stand seized of their former estates, notwithstanding those grants, would be as repugnant to the Constitution as a law discharging the vendors of property from the obligation of executing their contracts by conveyances. It would be strange if a contract to convey was secured by the Constitution, while an absolute conveyance remained unprotected. If, under a fair construction of the Constitution, grants are comprehended under the term contracts,' is a grant from the State excluded from the operation of the provision? Is the clause to be considered as inhibiting the State from impairing the obligation of contracts between two individuals, but as excluding from that inhibition contracts made with itself? The words themselves contain no such distinction. They are general, and are applicable to contracts of every description. If contracts made with the State are to be exempted from their operations, the exception must arise from the character of *the contracting party, not from the words which are [*275] employed." And the court proceed to give reasons for their decision, that violence should not "be done to the natural meaning of words, for the purpose of leaving to the legislature the power of seizing, for public use, the estate of an individual, in the form of a law annulling the title by which he holds that estate."

"1

It will be seen that this leading decision settles two important points first, that an executed contract is within the provision, and second, that it protects from violation the contracts of States equally with those entered into between private individuals.2

1 Fletcher v. Peck, 6 Cranch, 133.

This decision has been repeatedly followed. In the founding of the Colony of Virginia, the religious establishment of England was adopted, and before the

*

And it has since been held that compacts between two States are in like manner protected. These decisions, however, do [*276] not fully determine what under all circumstances is to be regarded as a contract. A grant of land by a State is a contract, because in making it the State deals with the purchaser precisely as any other vendor might; and if its mode of conveyance is any different, it is only because, by virtue of its sovereignty, it has power to convey by other modes than those which

Revolution the churches of that denomination had become vested, by grants of the crown or Colony, with large properties, which continued in their possession after the constitution of the State had forbidden the creation or continuance of any religious establishment, possessed of exclusive rights or privileges, or the compelling the citizens to worship under a stipulated form or discipline, or to pay taxes to those whose creed they could not conscientiously believe. By statute in 1801, the legislature asserted their right to all the property of the Episcopal churches in the respective parishes of the State; and, among other things, directed and authorized the overseers of the poor and their successors in each parish, wherein any glebe land was vacant or should become so, to sell the same and appropriate the proceeds to the use of the poor of the parish. By this act, it will be seen, the State sought in effect to resume grants made by the sovereignty, a practice which had been common enough in English history, and of which precedents were not wanting in the history of the American Colonies. The Supreme Court of the United States held the grant not revocable, and that the legislative act was therefore unconstitutional and void. Terrett v. Taylor, 9 Cranch, 43. See also Town of Pawlet v. Clark, 9 Cranch, 335; People v. Platt, 17 Johns. 195; Montgomery v. Kasson, 16 Cal. 189; Grogan v. San Francisco, 18 Cal. 590; Rehoboth v. Hunt, 1 Pick. 224; Lowry v. Francis, 2 Yerg. 534; University of North Carolina v. Foy, 2 Hayw. 310; State v. Barker, 4 Kansas, 379 and 435. The lien of a bondholder, who has loaned money to the State on a pledge of property by legislative act, cannot be divested or postponed by a subsequent legislative act. Wabash, &c., Co. v. Beers, 2 Black, 448.

On the separation of Kentucky from Virginia a compact was entered into between the proposed new and the old State, by which it was agreed "that all private grants and interests of lands, within the said district, derived from the laws of Virginia, shall remain valid and secure under the laws of the proposed State, and shall be determined by the laws now existing in this State." After the admission of the new State to the Union, "occupying claimant" laws were passed by its legislature, such as were not in existence in Virginia, and by the force of which, under certain circumstances, the owner might be deprived of his title to land, unless he would pay the value of lasting improvements made upon it by an adverse claimant. These acts were also held void; the compact was held inviolable under the Constitution, and it was deemed no objection to its binding character, that its effect was to restrict, in some directions, the legislative power of the State entering into it. Green v. Biddle, 8 Wheat. 1. See also Hawkins v. Barney's Lessee, 5 Pet. 457.

the general law opens to private individuals. But many things done by the State may seem to hold out promises to individuals, which after all cannot be treated as contracts without hampering the legislative power of the State in a manner that would soon leave it without the means of performing its essential functions. The State creates offices, and appoints persons to fill them; it establishes municipal corporations, with large and valuable privileges for its citizens; by its general laws it holds out inducements to immigration; it passes exemption laws, and laws for the encouragement of trade and agriculture; and under all these laws a greater or less number of citizens expect to derive profit and emolument. But can these laws be regarded as contracts between the State and the officers and corporations who are, or the citizens of the State who expect to be, benefited by their passage, so as to preclude their being repealed?

On these points it would seem that there could be no difficulty. When the State employs officers or creates municipal corporations as the mere agencies of government, it must have the power to discontinue the agency whenever it comes to be regarded as no longer important. "The framers of the Constitution did not intend to restrain the States in the regulation of their civil institutions, adopted for internal government." They may, therefore, discontinue offices and abolish or change the organization of municipal corporations at any time, according to the existing legislative view of state policy, unless forbidden by their own constitutions from doing so.2 And al- [277]

1 Dartmouth College v. Woodward, 4 Wheat. 629, per Marshall, Ch. J. Butler v. Pennsylvania, 10 How. 402; Warner v. People, 2 Denio, 272; Commonwealth v. Bacon, 6 S. & R. 322; Commonwealth v. Mann, 5 W, & S. 418; Conner v. New York, 2 Sandf. 355, and 5 N. Y. 285. "Where an office is created by statute, it is wholly within the control of the legislature. The term, the mode of appointment, and the compensation may be altered at pleasure, and the latter may be even taken away without abolishing the office. Such extreme legislation is not to be deemed probable in any case. But we are now discussing the legislative power, not its expediency or propriety. Having the power, the legislature will exercise it for the public good, and it is the sole judge of the exigency which demands its interference." Per Sandford, J., 2 Sandf. 369. “ • The selection of officers who are nothing more than public agents for the effectuating of public purposes is matter of public convenience or necessity, and so, too, are the periods for the appointment of such agents, but neither the one nor the other of these arrangements can constitute any obligation to continue such agents, or to reappoint them, after the measures which brought them into being shall have

though municipal corporations, as respects the property which they hold, control, and manage for the benefit of their citizens, are governed by the same rules and subject to the same liabilities as individuals, yet this property, so far as it has been derived from the State, or obtained by the exercise of the ordinary powers of government, must be held subject to control by the State, but under the restriction only, that it is not to be appropriated to uses foreign to those for which it has been acquired. And the franchises conferred upon such a corporation, for the benefit of its citizens, must be liable to be resumed at any time by that authority which may mould the corporate powers at its will, or even revoke them altogether. The greater power will comprehend the less. If, however, a

been found useless, shall have been fulfilled, or shall have been abrogated as even detrimental to the well-being of the public. The promised compensation for services actually performed and accepted, during the continuance of the particular agency, may undoubtedly be claimed, both upon principles of compact and of equity; but to insist beyond this upon the perpetuation of a public policy either useless or detrimental, and upon a reward for acts neither desired nor performed, would appear to be reconcilable with neither common justice nor common sense." Daniel, J., in 10 How. 416. See also Barker v. Pittsburgh, 4 Penn. St. 49; Territory v. Pyle, 1 Oregon, 149; Bryan v. Cattell, 15 Iowa, 538. But if the term of an office is fixed by the Constitution, the legislature cannot remove the officer-except as that instrument may allow - either directly, or indirectly by abolishing the office. People v. Dubois, 23 Ill. 547; State v. Messmore, 14 Wis. 163; Commonwealth v. Gamble, 62 Penn. St. 343. As to control of municipal corporations, see further, Marietta v. Fearing, 4 Ohio, 427; Bradford v. Cary, 5 Greenl. 339; Bush v. Shipman, 4 Scam. 186; Trustees, &c. v. Tatman, 13 Ill. 27; People v. Morris, 13 Wend. 325; Mills v. Williams, 11 Ired. 558; People v. Banvard, 27 Cal. 470.

In East Hartford v. Hartford Bridge Co. 10 How. 533, Mr. Justice Woodbury, in speaking of the grant of a ferry franchise to a municipal corporation, says: "Our opinion is . . . that the parties to this grant did not by their charter stand in the attitude towards each other of making a contract by it, such as is contemplated by the Constitution, and as could not be modified by subsequent legislation. The legislature was acting here on the one part, and public municipal and political corporations on the other. They were acting, too, in relation to a public object, being virtually a highway across the river, over another highway up and down the river. From this standing and relation of these parties, and from the subject-matter of their action, we think that the doings of the legislature as to this ferry must be considered rather as public laws than as contracts. They related to public interests. They changed as those interests demanded. The grantees, likewise, the towns, being mere organizations for public purposes, were liable to have their public powers, rights, and duties