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affect contracts, and yet be constitutionally exercised; but the relation of it to the protection given them in the Constitution has not yet been clearly defined.
The history of the clause respecting contracts, although very scanty, is not uninstructive, and tends to throw light upon the intent of the framers of the Constitution. On the 11th of July, 1787, Congress passed the famous ordinance for the government of the North-Western Territory, drawn up by Mr. Dane. In that was the following restriction respecting contracts:
“ And in the just preservation of rights and property, it is understood and declared that no law ought ever to be made or have force in the said territory that shall in any manner whatever interfere with or affect private contracts or engagements bona fide and without fraud previously formed.”
On the 28th of August in that same year, in the Constitutional Convention, when Article XII. of the draft of a constitution was under consideration, which, as it then stood, enacted that “ No State shall coin money nor grant letters of marque and reprisal, nor enter into any treaty, alliance, or confederation, or grant any title of nobility,” Mr. King moved to add the above prohibition, and thus make it applicable to the States; and the following debate ensued :
“ Mr. GOUVERNEUR MORRIS. — This would be going too far. There are a thousand laws relating to bringing actions, limitations of actions, &c., which affect contracts. The judicial power of the United States will be a protection in cases within their jurisdiction ; and within the State itself a majority must rule, whatever may be the mischief done among themselves.
“ Mr. SHERMAN. — Why, then, prohibit bills of credit ? “ Mr. Wilson was in favor of Mr. King's motion.
“ Mr. MADISON admitted that inconveniences might arise from such a prohibition ; but thought, on the whole, it would be overbalanced by the utility of it. He conceived, however, that a negative on the State laws could alone secure the effect. Evasions might, and would be devised by the ingenuity of the legislatures.
“ Colonel MASON. - This is carrying the restraint too far. Cases will happen that cannot be foreseen, where some kind of interference will be proper and essential. He mentioned the case of limiting the period for bringing actions on open account, — that of bonds after a certain lapse of time, - asking, whether it was proper to tie the hands of the states from making provision in such cases.
1 See Thorpe v. Rutland and Burlington Railroad Co., 27 Vt. 140.
“Mr. Wilson. - The answer to these objections is, that retrospective interferences only are to be prohibited.
“ Mr. Madison. — Is not that already done by the prohibition of ex post facto laws, which will oblige the judges to declare such interferences null and void ?
“Mr. RUTLEDGE moved, instead of Mr. King's motion, to insert “nor pass bills of attainder, nor retrospective [in the printed Journal • ex post facto '] laws."
On which motion seven States vote aye ; and Connecticut, Maryland, and Virginia, no.
On the following day, “ Mr. DICKINSON mentioned to the House that, on examining Blackstone's Commentaries, he found that the term ex post facto related to criminal cases only; that they would not, consequently, restrain the States from retrospective laws in civil cases ; and that some further provision for this purpose would be requisite."
On the 14th of September, Colonel Mason moved to strike out from the clause the words “ nor any ex post facto law.”.
“ He thought it not sufficiently clear that the prohibition meant by this phrase was limited to cases of a criminal nature; and no legislature ever did or can altogether avoid them in civil cases.
“ Mr. GERRY seconded the motion ; but with a view to extend the prohibition to 'civil cases, which he thought ought to be done.
“On the question all the States were, no.”
Afterwards, although on whose motion does not appear, the clause was altered so as to read as it now does, namely, “ pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.” 1
It is very apparent, and such is the opinion of Mr. Curtis, the author of the History of the Constitution, that the object of the change made from the words of the prohibition in the ordinance of 1787, was to diminish, and not to increase, the force of the prohibition, although this certainly has not been its result. The phraseology was not fortunate.' We have seen it stated, although we cannot now say where, that the author of the peculiar wording was Mr. Wilson, afterwards one of the first Justices of the Supreme Court of the United States, who was a Scotch
1 Madison Papers, 5 Elliot's Debates, 485, 488, 545, 546; 1 Curtis's History of the Constitution, 452; 2 Ibid. 367.
civil-law lawyer; and the language which has given rise to so much discussion, and the meaning of which to common-law lawyers has seemed obscure from its tautology, was evidently derived from the civil law.
Justinian says, “ An obligation is a chain of the law by which we are necessarily bound to make some payment according to the laws of our country.”i He then divides obligations primarily into two kinds: civil and prætorian; and secondly into four species : those arising ex contractu, quasi ex contractu, ex maleficio, quasi ex maleficio.2
Gaius says that “every obligation arises either from contract or tort." 3
From this it appears that the obligation of a contract means the legal rights and liabilities growing out of a contract as distinguished from those growing out of a tort. The word obligatio has a limited meaning. “ The Romans,” says Mackeldey, “never used obligatio in the sense of duty in general [officium], but confined it merely to claims and debts." 4. Obligatio ex contractu, therefore, means little more than a debt. “Whatever,” says Blackstone, “ the laws order any one to pay, that instantly becomes a debt which he hath beforehand contracted to discharge.” This definition, which, even as applied to contracts, is pretty broad, covers, we think, substantially all that the framers of the Constitution intended. It is a pity they did not say this ; for, if any error has been made in construing this phrase, we think it arose from the, to us, vague and ill-chosen language. The euphonious Latinism, “ obligation of a contract,” Mr. Webster doubtless played upon with musical iteration; and in the mouth of so skilful an orator, it must have been as effectual as the phrase “ chartered rights of men” was in 1783, when the East India Company appealed to Magna Charta in support of their right to oppress and plunder thirty millions of Asiatics without parliamentary interference.
1 Obligatio est juris vinculum, quo necessitate astringimur alicujus rei solvendæ secundum nostræ civitatis jura.” Inst., III. 14.
. Inst., III. 14, 88 1, 2.
3. Omnis enim obligatio vel ex contractu nascitur vd ex delicto. Gaius, III. 88; Abdy & Walker's edition, 196. The learned translators in their note to this passage say, of the words quoted from Justinian, secundum nostræ civitatis jura,“ the words of the definition indicate that no obligation was recognized by the law unless it could be enforced by action."
• Compendium of Modern Civil Law, $ 10, note.
But it is not every liability sounding in contract that is included in the words obligatio ex contractu. These only include express contracts, not implied ones, obligationes quasi ex contractu. This distinction, universal in the civil law, Erskine adopts in his Principles of the Laws of Scotland, - high authority on law terms used by a Scotch lawyer. The distinction, therefore, could hardly have been absent from Judge Wilson's mind. “ Quasi contracts,” says the Scotch Commentator, “ are formed without explicit consent, by one of the parties doing something that by its nature either obliges him to the other party or the other party to him.”i Assuming, what we do not admit, that obligatio can include agreements made by the sovereign touching his prerogatives, such peculiar contracts fall rather within the class of quasi contracts than contracts.
A reasonable construction of the clause will extend it to all pecuniary and monetary obligations or liabilities arising out of contracts. As thus construed, it would apply to contracts made by the State as well as to contracts made by private persons, where the State contracts as a private person might; as, for instance, in buying and selling property, conveying land, or borrowing money. In all these respects, the State deals as any individual would with things to which it has no different title, although, in consequence of its sovereign exemption from suit by private persons, there may often be no means of compelling it to fulfil its engagements. Thus repudiation by authority of the legislatures of some of the States of their public debt, was undoubtedly violating the obligation of contracts within the meaning of the Constitution.
But beyond this we cannot concur with the decisions of the Supreme Court in extending the inhibition to agreements by the States. Contracts which, from their subject-matter, are public ones, were not included within the ordinance of 1787; then, why should they be within words notoriously adopted to narrow the prohibition of the ordinance ?
The necessity of some check upon the States in regard to debts,
1 Erskine's Principles of the Laws of Scotland (14th ed.), 277, 328. See also Leapingwell, Roman Civil Law, 184; Colquhoun, Roman Civil Law, § 1761.
had been shown by stay laws and other enactments during the Revolution and Confederation. Hamilton says, in one of the only two references in The Federalist to this enactment, that “Laws in violation of private contracts, as they amount to aggressions on the rights of those States whose citizens are injured by them, may be considered as another probable source of hostility. We are not authorized to expect that a more liberal or more equitable spirit would preside over the legislations of the individual States hereafter, if unrestrained by any additional checks, than we have heretofore seen, in too many instances, disgracing their several codes.” 1.
It is to be noted further, in regard to this restriction, that it is not, like the prohibition to coin money or to make treaties, a transfer of a power from the States to the United States; nor is it a case in the nature of those limitations on legislative power placed in constitutions, not with the idea that the provision in the constitution respecting them is to be perpetual, but that it is one which should not be altered except by the people in their sovereign capacity, and with all the solemnity attending any alteration in the fundamental law; such as, for instance, provisions in respect of appellate courts, the tenure of judicial office, and the like: all of which, while placed beyond the control of the legislature, may be changed as necessity requires. The prohibition is in the nature of a declaration of a perpetual and immutable principle of government. The maxim Noscitur a sociis, demands this construction, and contemporary opinion of the highest authority establishes it. It is connected with bills of attainder and ex post facto laws, – acts of legislation which the direst necessity could never, in the opinion of our ancestors, justify.
“ Bills of attainder,” says Madison, “ ex post facto laws, and laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. The two former are expressly prohibited by the declarations prefixed to some of the State constitutions, and all of them are prohibited by the spirit and scope of these fundamental charters.” 3
“An act of the legislature,” said Mr. Justice Chase, “ (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority. The obligation of a law in governments established on express compact and on republican
1 The Federalist, No. VII. : The Federalist, No. XLIV.