denied on the argument, and, I presume, cannot be, but that a law may be void in part and good in part; or, in other words, that it may are always questions of great delicacy, and can never be met without feeling deeply and sensibly impressed with the sentiment, that this is the point upon which the harmony of our sys-be void, so far as it has a retrospective applicatem is most exposed to interruption. Whenever such a question is presented for decision, I cannot better express my views of the leading principles which ought to govern this court, than in the language of the court itself in the case of Fletcher v. Peck (6 Cranch, 128). "The question," says the court, "whether a law be void for its repugnancy to the constitution, is, at all times, a question of much delicacy, which ought seldom or never be decided in the affirmative in a doubtful case. The court, when impelled by duty to render such a judgment, would be unworthy of its station, could it be unmindful of the solemn obligation which that station imposes. But, it is not on slight implication! and vague conjecture, that the legislature is to be pronounced to have transcended its powers, and its acts to be considered void. The opposition between the constitution and the law should be such, that the judge feels a clear and strong conviction of their incompatability with each other." If such be the rule by which the examination of this case is to be governed and tried (and that it is no one can doubt), I am certainly not prepared to say that it is not, at least, a doubtful case, or that I feel a clear conviction that the law in question is incompatible with the constitution of the United States. In the discussion at the bar, this has rightly been considered a question relating to the division of power between the general and state governments. And in the consideration of all such questions, it cannot be too often repeated (although universally admitted), or too deeply impressed on the mind, that all the powers of the general government are derived solely from the constitution; and that whatever power is not conferred by that charter, is reserved to the states respectively, or to the people. The state of New York, when the law in question was passed (for I consider this a mere continuation 295*] of the insolvent act of 1788), was *in the due and rightful exercise of its powers as an independent government; and unless this power has been surrendered by the constitution of the United States, it still remains in the state. And in this view, whether the law in question be called a bankrupt or an insolvent law, is wholly immaterial; it was such a law as a sovereign state had a right to pass; and the simple inquiry is, whether that right has been surrendered. No difficulty arises here out of any inquiry about express or implied powers granted by the constitution. If the states have no authority to pass laws like this, it must be in consequence of the express provision, "that no state shall pass any law impairing the obligation of contracts.' It is admitted, and has so been decided by this court, that a state law, discharging insolvent debtors from their contracts, entered into antecedent to the passing of the law, falls within this clause in the constitution, and is void. In the case now before the court, the contract was made subsequent to the passage of the law; and this, it is believed, forms a solid ground of distinction, whether tested by the letter, or the spirit and policy of the prohibition. It was not tion to past contracts, and valid, as applied This clause in the constitution has given rise to much discussion, and great diversity of opinion has been entertained as to its true interpretation. Its application to some cases may be plain and palpable, to others more doubtful. But, so far as relates to the particular question now under consideration, the weight of judicial opinions in the state courts is altogether in favor of the constitutionality of the law, so far as my examination has extended. And, indeed, I am not aware of a single contrary opinion. (13 Mass. Rep., 1; 16 Johns. Rep., 233; 7 Johns. Ch. Rep., 299; 5 Binn. Rep.,264; 5 Hall's L. J. 520,6th ed. 475; Niles' Reg. 15th of September, 1821, Townsend v. the contract. The whole doctrine of the lex loci is founded on this principle. The language of the court, in the third circuit, in the case of Campanque v. Burnell (1 Washington C. C. Rep., 341), is very strong on this point. Those laws, say the court, which in any manner affect the contract, whether in its construction, the mode of discharging it, or which control the obligation which the contract imposes, are essentially incorporated with the contract itself. The contract is a law which the parties impose upon themselves, subject, however, to the paramount law-the law of the country where the contract is made. And when to be enforced by foreign tribunals, such tribunals aim only to give effect to the contracts, according to the laws which give them validity. So, also, in this court, in the case of Renner v. The Bank of Columbia (9 Wheat. Rep., 586), the language of the court is to the same effect, and shows that we may look out of the contract, to any known law or custom, with reference to which the parties may be presumed to have contracted, in order to ascertain their intention, and the legal, and binding force, and obligation of their contract. The Bank of Columbia v. Oakley (4 Wheat. Rep., 235), is another case recognizing the same principle. And in the case of Dartmouth College v. Woodward (4 Wheat. Rep., 695), it is well observed by one of the judges of this court, "that all contracts recognized as valid in any *country, ob- [*299 tain their obligation and construction jure loci contractus." And this doctrine is universally recognized, both in the English and American courts. In proceeding to a more particular examina297*] tion of the true import of the clause "no state shall pass any law impairing the obligation of contracts," the inquiries which seem naturally to arise are, what is a contract, what its obligation, and what may be said to impair it? As to what constitutes à contract, no diversity of opinion exists; all the elementary writers on the subject, sanctioned by judicial decisions, consider it briefly and simply an agreement in which a competent party undertakes to do, or not to do, a particular thing; but all know that the agreement does not always, nay, seldom, if ever, upon its face, specify the full extent of the terms and conditions of the contract; many things are necessarily implied, and to be governed by some rule not contained in the agreement; and this rule can be no other than the existing law when the contract is made, or to be executed. Take, for example, the familiar case of an agreement to pay a certain sum of money, with interest. The amount, or rate of such interest, is to be ascertained by some standard out of the agreement, and the law presumes the parties meant the common rate of interest established in the country where the contract was to be performed. This standard is not looked to for the purpose of removing any doubt or ambiguity arising on the contract itself, but to ascertain the extent of its obligation; or, to put a case more analogous, suppose a statute should declare generally, that all contracts for the payment of money should bear interest after the day of payment fixed in the contract, and a note, where such law was in force, should be made payable in a given number of days after date. Šuch note would sure ly draw interest from the day it became payable, although the note upon its face made no provision for interest; and the obligation of the contract to pay the interest would be as complete and binding as to pay the principal; but such would not be its operation without look-contract, and it derives its obligation solely from ing out of the instrument itself, to the law such agreement, without reference to the existwhich created the obligation to pay interest. ing law, it would seem to follow, that any law The same rule applies to contracts of every de- which had declared such contract void, or had scription; and parties must be understood as denied a remedy for breach thereof, would immaking their contracts with reference to exist-pair its obligation. A construction involving ing laws, and impliedly assenting that such contracts are to be construed, governed, and controlled, by such laws. Contracts absolute, 298*] and unconditional, *upon their face, are often considered subject to an implied condition which the law establishes as applicable to such cases. Suppose a state law should declare, that in all conveyances thereafter to be It will, I believe, be found on examination, made, of real estate, the land should be held as that the course of legislation in some of the security for the payment of the consideration states between debtor and creditor, which formmoney, and liable to be sold, in case defaulted the grounds of so much complaint, and should be made in payment: would such a law be unconstitutional? And yet it would vary the contract from that which was made by the parties, if judged of by the face of the deed alone, and would be making a contract conditional, If a contract does not derive its obligation which the parties had made absolute, and from the positive law of the country where it is would certainly be impairing such contract, made, where is to be found the rule, that such unless it was deemed to have been made sub- obligation does not attach until the contracting ject to the provisions of such law, and with ref-party has attained a certain age? In what code erence thereto, and that the law was impliedly of natural law, or in what system of universal adopted as forming the obligation and terms of law, out of which it is said, at the bar, spring If contracts are not made with reference to existing laws, and to be governed and regulated by such laws, the agreement of parties, under the extended construction now claimed for this clause in the constitution, may control state laws on the subject of contracts altogether. A parol agreement for the sale of land is a contract, and if the agreement alone makes the such consequences is certainly inadmissible. Any contract not sanctioned by existing laws creates no civil obligation; and any contract discharged in the mode and manner provided by the existing law where it was made, cannot, upon any just principles of reasoning, be said to impair such contract. which probably gave rise to this prohibition in the constitution, consisted principally, if not entirely, of laws having a retrospective operation upon antecedent debts. The true import of the term "obligation," as used in the constitution, may admit of some doubt. That it refers to the civil, or legal, and not moral obligation, is admitted by all. But whether the remedy upon the contract is entirely excluded from the operation of this provision, is a point on which some diversity of opinion has been entertained. the eternal and unalterable principles of right | sentially into consideration in making the conand of justice, will be found a rule, that such tract. If, at the time of making the contract, obligation does not attach so as to bind a party it be known that the person only of the debtor, under the age of twenty-one years? No one and not his property, or his personal property will pretend that a law exonerating a party only, and not his lands, or a certain part of from contracts entered into before arriving at either, is to be resorted to for satisfaction, no such age would be invalid. And yet, it would ground of complaint can exist, the contract impair the obligation of the contract, if such having been made with full knowledge of all obligation is derived from any other source than these things; but if, at the time the contract is the existing law of the place where made. made, not only the person, but all the property, Would it not be within the legitimate powers both real and personal, of the debtor, might be 300*] *of a state legislature to declare pros- resorted to for satisfaction, and a law should be pectively that no one should be made responsi- passed, placing beyond the reach of the creditor ble, upon contracts entered into before arriving the whole, or the principal part, of the debtor's at the age of twenty-five years? This, I pre- property, it would be difficult to sustain the sume, cannot be doubted. But, to apply such constitutionality of such a law. The statute of a law to past contracts, entered into when twen- limitations is conceded to relate to the remedy. ty-one years was the limit, would clearly be a Suppose, when a contract was made, the limitviolation of the obligation of the contract. No ation was six years, and it should be reduced such distinction, however, could exist, unless to six months, or any shorter period, and apthe obligation of the contract grows out of the plied to antecedent contracts, would it not be existing law, and with reference to which the repugnant to the constitution? But if the legcontract must be deemed to have been made. islature of a state should choose to adopt, prospectively, six months as the limitation, who could question the authority so to do? And suppose, further, that the unconstitutionality of the law in question is admitted, could the state of New York pass a law limiting the right of recovery against any insolvent who had been duly discharged according to the provisions of the insolvent act, to ten days from the passage of such law? And yet this would be a statute of limitation, and affect the remedy only. The law now in question is nothing more than taking away all remedy; and whether it be the whole, or some material part thereof, would seem to differ in degree only, and not in principle; and if to have a retrospective operation, *might well be considered as falling (*302 within the spirit and policy of the prohibition. In the case of Sturges v. Crowinshield, the court, in explaining the meaning of the terms obligation of a contract," say: "A contract is an agreement in which a party undertakes to do, or not to do, a particular thing. The law binds him to perform his undertaking, and this is, of course, the obligation of his contract." That is, as I understand it, the law of the contract forms its obligation; and if so, the contract is fulfilled, and its obligation discharged by complying with whatever the existing law required in relation to such contract; and it would seem to me to follow, that if the law, looking to the contingency of the debtor's becoming unable to pay the whole debt, should provide for his discharge on payment of a part, this would enter into the law of the contract, and the obligation to pay would, of course, be subject to such contingency. That it is not intended to interfere with or limit state legislation, in relation to the remedy, in the ordinary prosecution of suits, no one can doubt. And, indeed, such a principle is indispensable to facilitate commercial intercourse between the citizens or subjects of different governments, and is sanctioned by all civilized nations; and if, according to the language of these cases, this principle extends to the obligation, as well as the construction of contracts, it would seem to follow, as a necessary conclusion, that it must embrace all the consequences growing out of the laws of the country where the contract is made; for it is the law which creates the obligation, and whenever, therefore, the lex loci provides for the dissolution of the contract in any prescribed mode, the parties are presumed to have acted subject to such contingency. And hence, in the English courts, wherever the operation of a foreign discharge under a bankrupt law has been brought under consideration, they have given to it the same effect that it would have had in the country where the contract was made. And the same rule has been recognized and adopted in the courts of this country almost universally, where the question has arisen. But whether a law might not so change the nature and extent of existing remedies, and thereby so materially impair the It is unnecessary, however, on the present 301*] right, as to fall within the scope of this occasion, to attempt to draw, with precision, prohibition, if it extended to remedies upon an- the line between the right and the remedy, or tecedent contracts, is by no means clear. If to determine whether the prohibition in the the law, whatever it may be, relating to the constitution extends to the former, and not to remedy, has a prospective operation only, no the latter, or whether, to a certain extent, it objection can arise to it under this clause in the embraces both; for the law in question strikes constitution. It is a question that must rest in at the very root of the cause of action, and takes the sound discretion of the state legislature. away both right and remedy, and the question But men, when entering into contracts, can still remains, does the prohibition extend to a hardly be presumed entirely regardless of the state bankrupt or insolvent law, like the one in remedy which the law provides in case of a question, when applied to contracts entered breach of the contract; and the means of ob- into subsequent to its passage. Whether this taining satisfaction for such breach enters es-is technically a bankrupt or an insolvent law, is of little importance. Its operation, if valid, is to discharge the debtor absolutely from all future liability on surrendering up his property, and, in that respect, is a bankrupt law, according to the universal understanding in England, where a bankrupt system is in operation. It is not, however, limited to traders, but extends to every class of citizens; and, in this respect, is more analogous to the English insolvent laws, which only authorize the discharge of the debtor from imprisonment. If this provision in the constitution was unambiguous, and its meaning entirely free from doubt, there would be no door left open for construction, or any proper ground upon which 303*] *the intention of the framers of the constitution could be inquired into this court would be bound to give to it its full operation, whatever might be the views entertained of its expediency. But the diversity of opinion entertained of its construction, will fairly justify an inquiry into the intention, as well as the reason and policy of the provision; all which, in my judgment, will warrant its being confined to laws affecting contracts made antecedent to the passage of such laws. Such would appear to be the plain and natural interpretation of the words, "no state shall pass any law impairing the obligation of contracts." tioned by the courts of justice in this country, and in Great Britain, whenever such laws have come under consideration, and yet retrospective laws are clearly within this prohibition. It is, therefore, no objection to the view I have taken of this clause in the constitution, that the provision was unnecessary. The great principle asserted, no doubt, is, as laid down by the court in Sturges v. Crowninshield, the inviolability of contracts; and this principle is fully maintained by confining the prohibition to laws affecting antecedent contracts. It is the same principle, we find, cotemporaneously (13th July, 1787, 1 L. U. S., 475) asserted by the old Congress, in an ordinance for the government of the territory of the United States north-west of the river Ohio. By one of the fundamental articles it is provided, that "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 territory, that shall in any manner whatever interfere with or affect private contracts or engagements, bona fide, and without fraud, previously made," thereby pointedly making a distinction between laws affecting contracts antecedently, and subsequently made; and such a distinction seems to me to be founded upon the soundest principles of justice, if there is anything in the argument, that contracts are made with reference to, and derive their obligation from the existing law. That the prohibition upon the states to pass laws impairing the obligation of contracts is applicable to private rights merely, without reference to bankrupt laws, was evidently the understanding of those distinguished commentators on the constitution, who wrote the Federalist. In the 44th number of that work (p. 281), it is said that "bills of attainder, ex post facto laws, and laws impairing the obligation of The law must have a present effect upon some contract in existence, to bring it within the plain meaning of the language employed. There would be no propriety in saying, that a law impaired, or in any manner whatever modified or altered, what did not exist. The most obvious and natural application of the words themselves, is to laws having a retrospective operation upon existing contracts; and this construction is fortified by the associate prohibitions, "no state shall pass any bill of attainder, ex post facto law, or law impairing the ob-contracts, are contrary to the first principles of ligation of contracts." The two first are confessedly restricted to retrospective laws, concerning crimes and penalties affecting the personal security of individuals. And no good reason is perceived why the last should not be restricted to retrospective laws, relating to private rights growing out of the contracts of parties. The one provision is intended to protect the person of the citizen from punishment criminally for any act not unlawful when committed: and the other to protect the rights of property, as secured by contracts sanctioned by existing laws. No one supposes that a state legislature is under any restriction in declaring, prospectively, any acts criminal which its own wisdom and policy may deem expedient. And why not apply the same rule of construction and operation to the other provision relating to the rights of property? Neither provision can strictly be considered as introducing any new principle, but only for greater security and safety to incorporate into this charter provisions admitted by all to be among the first principles of our government. No state court would, I presume, sanction and enforce an ex post facto 304*] law; if no *such prohibition was contained in the constitution of the United States; so, neither would retrospective laws, taking away vested rights, be enforced. Such laws are repugnant to those fundamental principles, upon which every just system of laws is founded. It is an elementary principle adopted and sanc 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 [*305 all of them are prohibited by the spirit and scope of these fundamental charters. Our own experience has taught us, nevertheless, that additional defenses against these dangers ought not to be omitted. Very properly, therefore, have the convention added this constitutional bulwark in favor of personal security and private rights." Had it been supposed that this restriction had for its object the taking from the states the right of passing insolvent laws, even when they went to discharge the contract, it is a little surprising that no intimation of its application to that subject should be found in these commentaries upon the constitution. And it is still more surprising, that if it had been thought susceptible of any such interpretation, that no objection should have been made in any of the states to the constitution on this ground, when the ingenuity of man was on the stretch in many states to defeat its adoption; and particularly in the state of New York, where the law now in question was in full force at the very time the state convention was deliberating upon the adoption of the constitution. But if the prohibition is confined to retrospective laws, as it naturally imports, it is not surprising that it should have passed without objection, as it is the assertion of à principle universally approved. but no state *shall pass any law impair- [*307 ing the obligation of contracts; and this prohibition is made to mean, no state shall pass any bankrupt law. No just objection can be made to this collo It was pressed upon the court with great confidence, and, as it struck me at the time with much force, that if this restriction could not reach laws existing at the time the contract was made, state legislatures might evade the prohibition (immediately preceding), to make any-cation, if the grant of the power to Congress, thing but gold and silver a tender in payment and the prohibition in question to the states, of debts, by making the law prospective in its relate to the same subject-matter, viz., bankoperation, and applicable to contracts thereafter rupt laws. But, it appears to me very difficult to be made. But on reflection, I think, no to maintain this proposition. It is, in the first such consequences are involved. When we place, at variance with the decision in Sturges look at the whole clause in which these restric-v. Crowninshield, where it is held, that this tions are contained, it will be seen that the sub-power is not taken from the states absolutely, jects embraced therein are evidently to be di- but only in a limited and modified sense. And vided into two classes; the one of a public and in the next place, it is not reasonable to supnational character, the power over which is en- pose that a denial of this power to the states tirely taken away from the states; and the other would have been couched in such ambiguous relating to private and personal rights, upon terms, if, as has been contended, the giving to which the states may legislate under the restric- Congress the exclusive power to pass bankrupt tions specified. The former are, "no state laws, was the great and leading object of this shall enter into any treaty, alliance, or confed- prohibition, and the preservation of private 306*] eration, grant *letters of marque and rights followed only as an incident of minor reprisal, coin money, emit bills of credit." importance, it is difficult to assign any satisfacThus far there can be no question that they tory reason why the denial of the power to the relate to powers of a general and national char- states was not expressed in plain and unambigacter. The next in order is, or "make any-uous terms, viz., no state shall pass any bankthing but gold and silver a tender in payment rupt law. This would have been a more natof debts; this is founded upon the same prin- ural, and, certainly, a less doubtful form of ciples of public and national policy as the pro- expression; and, besides, if the object was to hibition to coin money and emit bills of credit, take from the states altogether the right of and is so considered in the commentary on this passing bankrupt laws, or insolvent laws havclause in the number of the Federalist I have ing the like operation, why did not the denial referred to. It is there said, the power to make of the power extend also to naturalization laws? anything but gold and silver a tender in pay- The grant of the power to Congress on this ment of debts, is withdrawn from the states, on subject, is contained in the same clause, and the same principles with that of issuing a paper substantially in the same words, “To establish currency. All these prohibitions, therefore, an uniform rule of naturalization, and uniform relate to powers of a public nature, and are laws on the subject of bankruptcies throughout general and universal in their application, and the United States." If the authority of Coninseparably connected with national policy. gress on the subject of naturalization is excluThe subject-matter is entirely withdrawn from sive, from the nature of the power, why is it state authority and state legislation. But the not, also, with respect to bankruptcies? And if, ⚫ succeeding prohibitions are of a different char- in the one case, the denial of the power to the acter; they relate to personal security and pri- states was necessary, it was equally so in the vate rights, viz., or pass any bill of attainder, other. I cannot think, therefore, that the proex post facto law, or law impairing the obliga-hibition to pass laws impairing the obligation tion of contracts." The subject-matter of such of contracts, had any reference to a general laws is not withdrawn from the states; but the system of bankrupt or insolvent laws. Such legislation thereon must be under the restric- a system, established by the sovereign legisla tion therein imposed. States may legislate on tive power of the general, or state governments, the subject of contracts, but the laws must not cannot, in any just sense, be said to *im- [*308 impair the obligation of such contracts. A ten-pair the obligation of contracts. In every govder of payment necessarily refers to the time when the tender is made, and has no relation to the time when the law authorizing it shall be passed, or when the debt was contracted. The prohibition is, therefore, general and un-ments. limited in its application. It has been urged in argument, that this prohibition to the states to pass laws impairing the obligation of contracts, had in view an object of great national policy, connected with the power to regulate commerce; that the leading purpose was to take from the states the right of passing bankrupt laws. And to illustrate and enforce this position, this clause has been collated with that which gives to Congress the power of passing uniform laws on the subject of bankruptcies; and by transposition of the clause, the constitution is made to read, Congress shall have power to establish uniform laws on the subject of bankruptcies throughout the United States; ernment of laws there must be a power somewhere to regulate civil contracts; and where, under our system, is that power vested? It must be either in the general or state govern There is certainly no such power granted to the general government, and all power not granted is reserved to the states. The whole subject, therefore, of the regulation of contracts must remain with the states, and be governed by their laws respectively; and to deny to them the right of prescribing the terms and conditions upon which persons shall be bound by their contracts thereafter made, is imposing upon the states a limitation, for which I find no authority in the constitution; and no contract can impose a civil obligation beyond that prescribed by the existing law when the contract was made; nor can such obligation be impaired by controlling and discharging the contract according to the provisions of such |