surers. this is implied in all warranties, that the property is neutral; and if an act is done that forfeits this neutrality, the insurers are discharged. And here the very thing is done, viz: the rescue of the vessel, which forfeits the benefits of neutrality; and thus, the insurers are discharged. The same thing which it is contended is barratry, and subjects the insurers, is the very thing which, by the policy, it is agreed shall discharge the inWhat is the language of the policy in the mouths of the parties? Is it not this; say the insurers to the insured, we will subscribe the policy and insure against the hazards there named, provided you will engage that the ship and her cargo is neutral, and that no act shall be done which forfeits her neutrality. The insured answer to this, we agree; and the insured, accordingly, engage in the policy, that if any act is done, which is a forfeiture of the vessels' neutrality, they will have no claim against the insurers. An act is done which is a forfeiture of neutrality; yet the insured claim against the insurers; because they say, that this act is barratry, against which the insurers insured; or in other words, it is true we agreed never to call upon you, if a certain event took place. That event has taken place, and we call it barratry, and you are liable. Nothing can be more absurd than to suppose the parties contemplated the forfeiture of neutrality, as the barratry insured against; for this would be to suppose, that they had agreed that the insurers should not be liable, if there was a forfeiture of the neutral character; and at the same time agreed, that in that event, they should be holden. From the nature of these warranties, on the part of the insured, they are conditions precedent. No liability attaches on the insurers, unless these warranties are sacredly performed. It was, therefore, absolutely necessary, that the vessel and cargo should be neutral, and that this neutral character be preserved, or the insurers were not liable. The language of the policy, most manifestly is, in the mouth of the insurers, if you the insured, warrant the vessel and cargo to be neutral, and that she shall preserve her neutral character, we insure against barratry; but if you do not do this, we will not be liable. To this the insured agree, and put it on that ground, that ship and cargo are neutral, and will preserve a neutral character. Can it be conceived, that when she forfeits her neutral character, this is the barratry insured against? If it is, then the law is so, that the very act which releases the insurers from all liability, is the act which renders them liable. Brainard, J. concurred in the opinion of judge Reeve. SUPREME COURT OF PENNSYLVANIA. 1817. The Farmers and Mechanic's Bank, vs. Wm. W. Smith. The Act of Assembly of March, 1812 is a Bankrupt Law, and is no infringement of the Constitution of the United States. Tilghman, Ch. J. I agree with the counsel for the plaintiff in considering the act of assembly on which the question in this case arises, as a bankrupt act. Such it certainly is, in its nature, although confined in its operation to a particular part of the state. It has the leading features of a bankrupt law, the discharge from all debts in consideration of the surrender of all the property of the debtor; and it possesses the details usually found in bankrupt laws for carrying the main design into effect. The validity of this law is contested as violating the Constitution of the United States in two respects; 1st. In assuming a power which has been exclusively vested in the congress of the United States. 2d. In impairing the obligation of contracts, contrary to the express prohibition of the 10th section of the 1st article of the Constitution. 1. Congress has power "to establish uniform laws on the subject of bankruptcies throughout the United States." (Art.. 1. Sec. 8.) Hence it is contended, that no state has power to pass a law on the subject of bankruptcy. There would be great strength in this argument if congress had exercised their power by passing a bankrupt law, because then the uniformity which they were authorized to establish would be broken in upon by the act of an individual state. But it is to be considered, whether the power of congress is exclusive even when they do not think proper to exercise it; for thus the matter is at present circumstanced. Antecedent to the adoption of the Federal Constitution, the power of the several states was supreme and unlimited. It follows there. fore, that all power not transferred to the United States, remains in the states and the people, according to their several constitutions. This would have been the sound construction of the constitution without amendment. But the jealousy of those who feared that the federal government would absorb all the power of the states, caused it to be expressly recognized in the 11th and 12th Articles of Amendment. Supposing then that there has been ceded to congress the exclusive power to regulate the subject of bankruptcy, whenever they shall think it expedient to exercise it, is it to be inferred that the states have debarred themselves from all exercise of power on the same subject when congress do not think it expedient to act? I can perceive no just ground for the inference. The exercise of this power by the states under such circumstances, could have no interference with the power delegated to congress, and it would prevent a situation of things very ill suited to the commercial habits of many of the states. For such are the hazards to which those who engage in trade and commerce are unavoidably exposed, that, I believe it has been found necessary, in all commercial countries, to relieve the unfortunate from the burthen of their debts, upon the surrender of all their property. There seem to be but three cases in which the several states have no power to legislate. 1. When they are expressly prohibited. 2. Where exclusive power is expressly vested in the United States. 3. Where the power vested in the United States, is in its nature exclusive. The subject of bankruptcy does not fall within the first or second of these cases; and if it falls within the third it is only during those times in which Congress exercise their power on the same subject. The states are not to be divested of their power by inference, unless the inference be inevitable. Now that is not the case here. On the contrary the power contended for on behalf of the states, is in perfect harmony with the power granted to congress; a power to legislate on a subject of necessity, at a time when congress do not think it expedient to act.. I think the Constitution has received a practical construction on this point, although I know that the weighty opinion of judge Washington has lately been pronounced to the contrary. Golden v. Prince. 5 Hall, 502. But to that opinion is opposed the strong argument of the Supreme Court of New-York, in Livingston vs. Van Ingen, in which it was adopted as a principle that in cases where power is affirmatively vested in congress, and not expressly taken away from the states, they may go on to legislate until their laws come in collision with the acts of congress. By practical construction however, I do not mean judicial decision, but practice sanctioned by general consent. In the same section of the Constitution from which congress derive their power to establish an uniform system on the subject of bankruptcies, they have also given to them the power of fixing the standard of weights and measures. This they have never done, but the states have regulated them at their pleasure, and I believe without question. In the same section also there is granted to congress the power to provide for organizing, arming, and disciplining the militia, and yet all the states have passed laws on those subjects, much to the public benefit, and in harmony with the Acts of Congress. From all these considerations, although I will not say that a case admits of no doubt in which men of great talents have differed, : : : prohibited expressly by the Constitution; because to say the least of it, it would be setting a very bad example. But it may be asked by what rule shall the meaning of these words impairing the obligation of contracts be restricted or limited if they are not taken in their full extent. I confess that to lay down a rule which would decide all cases appears to me to be very difficult, perhaps impossible. We may be certain that particular cases are not within the meaning of a law, without being able to enumerate all the cases that are within it. To attempt such enumeration is unnecessary and dangerous, lest some should be omitted. It is safe to decide on each case as it arises. It is probable that so far as respects contracts between individuals, the principal mischiefs which the convention meant to remedy, were those which arose from tender laws, and laws by which creditors who sued for their debts were compelled to take property upon an appraisement. Tender laws are expressly mentioned, yet they would have been included in the general words, for they certainly alter the obligation of the contract. Laws of this kind impair the contract, by giving an advantage to the debtor, without any consideration in favour of the creditor. Bankrupt laws are essentially different. They afford, in many instances, advantages to both debtor and creditor. The debtor is discharged on condition of surrendering his property without delay for the benefit of his creditors. The creditor is often a great loser, but he is sometimes a gainer by the means which are offered him of compelling the debtor to a full discovery of his property, and obtaining possession of it more quickly than in the usual course of law. The bankrupt system has been adopted in countries the most tenacious of the rights of creditors, of which England and Holland are examples: so that without straining it might be considered as an excepted case, when laws impairing the obligation of contracts were mentioned. So it seems to have struck both individuals and public bodies about the time of the adoption of the Federal Constitution. I well remember, that very soon after its adoption, |