states not to pass laws impairing the obligation of contracts, was that of Sturges v. Crowninshield. (c) The defendant was sued (c) 4 Wheaton, 122.

in one of the federal courts upon two promissory notes, given in March, 1811, and he pleaded his discharge under an insol*420 vent act of New York, passed in April, *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 preëxisting debts, and from all liability and responsibility by reason thereof.

The Chief Justice, in the opinion which he delivered on behalf of the court, admitted, that until Congress exercised the power to pass uniform laws on the subject of bankruptcy, the individual states may pass bankrupt laws, provided those laws contain no

Aust. Jurisp. Lect. 45, 3d ed. 788; Pom- 487; White v. McKee, 19 La. An. 111; eroy's Const. Law, § 609 et seq. Barnes v. Barnes, 8 Jones, (N. C.) 366; Taylor v. Stearns, 18 Gratt. 244; Penrose v. Erie Canal Co., 56 Penn. St. 46, 49. But see Ex parte Pollard, 40 Ala. 77; Watson v. Stone, ib. 451.

The objections to the distinction, if sound, are diminished by the decisions in which Bronson v. Kinzie, sup. n. (b) is followed. Butz v. Muscatine, 8 Wall. 575, 583, stated above. To take away all remedy is of course unconstitutional, White v. Hart, 13 Wall. 646; and it has been held that a statute of Alabama, authorizing a redemption of mortgaged property in two years after a sale under a decree, was void as to sales made under mortgages executed before the act was passed. Howard v. Bugbee, 24 How. 461. So a state law depriving the creditors of a bank of all legal process against its real property, affects the remedy in such a way as to impair the obligation of the contract. Curran v. Arkansas, 15 How. 304, 319. See Hawthorne v. Calef, 2 Wall. 10, stated above; Danks v. Quackenbush, 1 Comst. 129. But see Morse v. Goold, 1 Kern. 28; Mede v. Hand, 5 Am. L. Reg. N. s. 82; Rockwell v. Hubbell, 2 Dougl. Mich.) 197; Cusic v. Douglas, 3 Kansas, 123; Root v. McGrew, ib. 215. So the stay laws passed in many southern states in consequence of the late war have been generally held unconstitutional. Wood v. Wood, 14 Rich. (S. C.) 148; State v. Carew, 13 id. 498; Coffman v. Bank of Kentucky, 40 Miss. 29; Burt v. Williams, 24 Ark. 91; Bennett v. Worthington, ib.

On the other hand, an act limiting the time for suits on judgments obtained in the courts of other states before its passage to two years is valid. Bank of Alabama v. Dalton, 9 How. 522. See Bacon v. Howard, 20 How. 22; Christmas v. Russell, 5 Wall. 290; Curtis v. Whitney, 13 Wall. 68; see further, as to statutes of limitations, Bruce v. Schuyler, 4 Gilm. (Ill.) 221; Edwards v. McCaddon, 20 Iowa, 520; Berry v. Ransdall, 4 Met. (Ky.) 292. It has even been held that an act prohibiting any action on a promise to pay a debt from which the debtor had been discharged in bankruptcy, unless such promise was in writing, was valid as to promises made before the act, but sued on afterwards. Kingley v. Cousins, 47 Maine, 91. So an act abolishing imprisonment for debt may be made applicable to existing contracts. Bronson v. Newberry, 2 Dougl. (Mich.) 38; Donnelly v. Corbett, 3 Seld. 500; Oriental Bank v. Freeze, 18 Maine, 109; Fisher v. Lacky, 6 Blackf. (Ind.) 373. So a statute abolishing distress for rent is valid as to leases made before the act was passed. Conkey v. Hart, 4 Kern. 22; Van Rensselaer v. Snyder, 3 Kern. 299.

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. (a) 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 confidence completely. It intended 421 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 case. 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, (a) and by the Chief Justice of Massachusetts, in Blanchard v. Russell, (b) and was relied on as a sound distinction by the Court of Chancery of New York, in Hicks v. Hotchkiss. (c) The doctrine of these cases

(a) In the case of Bumgardner v. Circuit Court, 4 Mo. 50, it was decided, that a statute directing a stay of execution on judgments was unconstitutional, both as it regarded the constitution of Missouri and of the United States.

(a) 16 Johns. 233.
(c) 7 Johns. Ch. 297.

(b) 13 Mass. 1.

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. Crown inshield 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. * M'Neill, (d) went a step further, 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 *422 law, which shall be effectual to discharge the debtor from a debt contracted after the passing of the act, and contracted within the state making the law. The general language of the court would seem to reach even this case; but the facts in these cases decided do not cover this ground, and the cases decided are not authority to that extent. (a) 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 the future property of the debtor. (b) 1 (d) 4 Wheaton, 209.

(a) In the case of Bronson v. Kinzie, 1 How. 311, it was conceded, that contracts made subsequent to the stay-laws of Illinois were to be governed by them, if made to be executed in the state; for every state may prescribe the legal and equitable obligations of a contract to be made and executed within it.

(b) In Smith v. Parsons, 1 Ohio, 236, and in Hempstead v. Read, 6 Conn. 480, the bury, ib. 234, have done much to settle the law on this point B., a citizen of Massa

1 State Insolvent Laws. - Baldwin v. Hale, 1 Wall. 223; Same v. Bank of New

And while on this point, it may not be amiss to observe, that the cessio bonorum of the Roman law, introduced by Julius Cæsar, and which prevails at present in most parts of the continent of

power of the states over contracts was understood and declared to be confined within the precise limits mentioned in the text. See, also, ii. 392, 393. The result of the decisions, says Judge Story (3 Comm. Const. U. S. 15, 256), is, that state insol vent laws lawfully apply, (1.) to all contracts made within the state, between citizens of the state; (2.) they do not apply to contracts made within the state, between a citizen of the state and a citizen of another state; (8.) nor to contracts not made within the state; and the contracts so protected are equally so from prospective as well as retrospective legislation. But if a creditor out of the state voluntarily makes himself a party to the proceedings under the insolvent law of the state, and accepts a dividend, he is bound by his own act, and is deemed to have waived his extraterritorial immunity. In Satterlee v. Matthewson, 2 Peters, 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 effects be not to impair the obligation of a contract. It was further held, that retrospective laws were not within the constitutional prohibition, provided they did not impair the obligation of contracts, or partake of the character of ex 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, for no contract was to be implied not to impose such a tax. Providence Bank v. Billings, 4 Peters, 514. It has been adjudged in Louisiana and Mississippi, that a state law requiring a bank to receive at par, though under par, its own notes, in payment of debts due to it, is constitutional. 12 Rob. (La.) 125; 3 Smedes & Marsh. 661.

chusetts. made a note in Boston, payable there to H., a citizen of Vermont. After the date of the note,and before suit brought, B. obtained a discharge under his state insolvent laws, which were in force when the note was made. The pavee took no part in the insolvency proceedings, and it was held that this discharge was no bar to a suit by him in the Circuit Court of Massachusetts. Scribner v. Fisher, 2 Gray, 43, was overruled. See also Gilman v. Lockwood, 4 Wall. 409; Kelley v. Drury, 9 Allen, 27; Donnelly v. Corbett, 3 Seld. 500; Crow v. Coons, 27 Mo 512; Beer v. Hooper, 32 Miss. 246; Easterly v. Goodwin, 35 Conn. 279; Poe v. Duck, 5 Md. 1; Whitney v. Whiting, 35 N. H. 457; Stevenson v. King, 2 Cliff. 1; Hawley v. Hunt, 27 Iowa, 303; Felch v. Bugbee, 48 Me. 9. It has been held further that a discharge under like circumstances is no bar to a suit in the courts of the state granting the

discharge. (The United States court would rather seem to have held an opposite opinion in the cases cited, and see the dissenting opinion of Hunt, C. J., 39 N. Y. 845.) Soule v. Chase, 39 N. Y. 342; Kelley v. Drury, 9 Allen, 27. And it does not matter that the debt has passed into judgment. Worthington v. Jerome, 5 Blatchf. 279; Easterly v. Goodwin, 35 Conn. 279. But a discharge in Massachusetts will not be prevented from barring a contract made with a citizen of that state by his becoming a citizen of another state. Stoddard v. Harrington, 100 Mass. 87. Compare Hawley v. Hunt, 27 Iowa, 303. And it has been held that a Massachusetts discharge is a bar to an action on a contract between two citizens of that state, although it was made and to be performed in another state. Marsh v. Putnam, 8 Gray, 551. See Whitney v. Whiting, 85 N. H. 457, 472.