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Contracts.

The term contract, comprises in its full and more liberal signification every description of agreements, obligations or legal ties whereby one party binds himself, or becomes bound, expressly or impliedly, to pay a sum of money, or perform or omit to do a certain act. Woodruff v. State, 3 Ark. 285.

Whether the contract relates to real or personal estate, is executed or executory, or rests in parol, or is under seal, the Constitution preserves it inviolate from the action of a State legislature so far as it creates rights or contains obligations binding on the parties in law or equity. Trustees v. Rider, 13 Conn. 87; Taylor v. Stearns, 18 Gratt. 244.

The provision has no regard to the magnitude or values of contracts. The obligation of no contract shall be impaired, whether it be for much or little. Gault's Appeal, 33 Penn. 94.

The subject of the prohibition is every contract relating to property or some object of value, and which confers rights that may be asserted in a court of justice. Trustees v. Rider, 13 Conn. 87; Regents v. Williams, 9 G. & J. 365.

The Constitution recognizes no distinction between express and implied contracts. Myrick v. Battle, 5 Fla. 345.

The contracts designed to be protected are contracts by which perfect rights, certain, definite, fixed private rights of property are vested. Butler v. Pennsylvania, 10 How. 402.

The provision of the Constitution never has been understood to embrace other contracts than those which respect property or some object of value, and confer rights which may be asserted in a court of justice. Dartmouth College v. Woodward, 4 Wheat. 518.

This provision applies only to those contracts which impose obligations under the general principles of law. It does not extend to those which are void under the State Constitution, nor to those entered into without authority from the party sought to be bound. People v. Roper, 35 N. Y. 629.

All questions of property are within the jurisdiction of the respective States, and the individual members thereof, in forming a government, are not to be considered as contractors with the government thereby ordained in the sense in which that term is employed in the Constitution. It is but fair to suppose that individuals who sacrifice or part with a portion of their natural rights for the common good of all, have just reason to believe that the rights reserved will be respected or maintained inviolate, but this agreement is a social compact, and not stricti juris a contract. Billings v. Hall, 7 Cal. I; State v. Paul, 5 R. I. 185.

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The Constitution does not give validity to contracts which confer no rights, nor add to those which they do confer. It prohibits a State from impairing the obligation of a contract—that is, the rights and duties which arise from it. It does not declare that every contract contains an obligation, or that it shall always be enforced, but it does declare that whatever obligations are created or rights secured shall not be impaired by an act of the legislature. It is obvious, therefore, that in every case in which the prohibition is attempted to be applied, the first inquiry is whether the case be one in which the subject-matter is a contract relating to property, or some object of value, and which imposes an obligation capable, in legal contemplation, of being impaired. If it be such a contract, the remaining inquiry is whether the act of the legislature impairs that obligation. Trustees v. Rider, 13 Conn. 87; Regents v. Williams, 9 G. & J. 365.

There is a distinction between those rights which the law gives to, or obligations which it imposes upon, persons in certain relations merely in carrying out its own views of policy, and independently of any stipulations which the parties may have made, and those rights which the law itself, even in carrying out some matter of general policy, authorizes to be made' the subject of express contract between the parties. In the former case, the rights being derived entirely from the law, and not from the contract, laws changing them are not within the prohibition. But, in the latter case, although the law authorized the rights to be acquired, yet it authorized them to be acquired only by a contract stipulating for them, and when they are so acquired the contract is within the protection of the Constitution. Robinson v. Howe, 13 Wis. 341.

A claim arising out of a tort and not from a contract is not within the prohibition of this clause. Dash v. Van Kleek, 7 Johns. 477; Amy v. Smith, 1 Litt. 326; Thayer v. Seavey, 11 Me. 284.

It was not necessary, nor would it have been safe, to enumerate particular subjects to which the principle they intended to establish should apply. The principle was the inviolability of contracts. This principle was to be protected in whatsoever form it might be assailed. To what purpose enumerate the particular modes of violation which should be forbidden when it was intended to forbid all. Sturges v. Crowninshield, 4 Wheat. 122.

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A compact between two States is a contract within the meaning of the Constitution. In fact the terms contract and compact are synonymous. Green 7. Biddle, 8 Wheat. 1; Canal Co. v. Railroad Co. 4 G. & J. 1; Allen v. McKeen, I Sum. 276; Cox v. State, 3 Blackf. 193; Spooner v. McConnell, 1 McLean, 337; Hogg v. Canal Co. 5 Ohio, 410; Achison v. Huddleson, 12 How. 293; S. C. 7 Gill, 179; Stokes v. Searight, 3 How. 151; Neil v. State, 3 How. 720; State v. Wheeling Bridge Co. 13 How. 518.

A State can not pass any law impairing the obligation of a compact made by it with the United States. Lowry v. Francis, 2 Yerg. 534.

If a grant of land by the United States to a State is on conditions, the acceptance of the grant by the State constitutes a contract. McGee v.

Mathis, 4 Wall. 143.

The character of the parties to the contract does not prevent the application of the prohibition. The contracting parties, whoever they may be, stand in this respect upon the same ground. Trustees v. Rider, 13 Conn. 87; Regents v. Williams, 9 G. & J. 365.

Although the Constitution does not mention corporations by name, yet they are within it as a part of the general law, for they are entitled to all the benefits of general laws, like natural persons, unless excluded therefrom by the charter. The contracts of corporations, therefore, have the full guaranty of the Constitution. Bank v. Bank of Cape Fear, 13 Ired. 75.

The questions as to the nature, form, extent, construction and validity of contracts is left to be determined by the judicial department of the Government. Trustees v. Rider, 13 Conn. 87.

Contracts with States.

There is no distinction between a contract by a State and a contract by an individual. The words are general, and are applicable to contracts of every description. Fletcher v. Peck, 6 Cranch, 87; Derby Turnpike Co. v. Parks, 10 Conn. 522; Green v. Biddle, 8 Wheat. 1; Terrett v. Taylor, 9 Cranch, 43; Pawlett v. Clark, 9 Cranch, 292; State v. Wilson, 7 Cranch, 164; S. C. 2 N. J. 300; Woodruff v. State, 3 Ark. 285; Trustees v. Rider, 13 Conn. 87; Astrom v. Hammond, 3 McLean, 107; Woodruff v. Trapnall, 10 How. 190; s. c. 8 Ark. 236; Stanmire v. Taylor, 3 Jones (N. C.) 207.

Impairing.

To impair means to alter, so as to make the contract more beneficial to one party and less so to the other, than by its terms it purports to be. Baily v. Gentry, I Mo. 164.

The impairing of contracts must mean their partial rescindment by legislative authority. Grimball v. Ross, T. U. P. Charlt. 175.

Any measure which lessens the value of contracts, that gives them a diminished value, takes from them any of the essential properties of contracts, or which divests them of that priority of lien, obligation or recovery which they would otherwise possess, impairs the obligation. Grimball v. Ross, T. U. P. Charlt. 175.

One of the tests that a contract has been impaired is that its value has by legislation been diminished. Planters' Bank v. Sharp, 6 How. 301; S. C. 12 Miss. 28.

It is not every statute which affects the value of a contract that impairs its obligation. Curtis v. Whitney, 13 Wall. 68.

There is no difference in principle between a law that in terms impairs the obligation of a contract, and one that produces the same effect in the construction and practical execution of it. Canal Co. v. Railroad Co. 4 G. & J. I.

To be in conflict with the Constitution it is not necessary that the act of the legislature should import an actual destruction of the obligation of contracts. It is sufficient that the act imports an impairment of the obligation. If by the legislative act the obligation of contracts is in any degree impaired, or what is the same thing, if the obligation is weakened or rendered less operative, the Constitution is violated, and the act is so far inoperative. Lapsley v. Brashears, 4 Litt. 47.

Obligation and right are correlative terms. Whenever there exists a right in one person there is a corresponding obligation upon some other' person. In the same proportion as the legal obligation is diminished, suspended or entirely destroyed by relaxing, suspending or abolishing the legal remedy, so in the same proportion is the legal right either impaired or destroyed. Lapsley v. Brashears, 4 Litt. 47; McCracken v. Hayward, 2 How. 608.

A law which authorizes the discharge of a contract by a smaller sum or at a different time, or in a different manner than the parties have stipulated, impairs its obligation by substituting for the contract of the parties one which they never entered into, and to the performance of which they, of course, had never consented. The old contract is completely annulled, and a legislative contract imposed upon the parties in lieu of it. The degree of injury to the creditor may not be so great as where the contract is declared to be void, but the principle is the same. Golden v. Prince, 3 Wash. 313; 5 Hall L. J. 502; Edmondson v. Ferguson, 11 Mo. 344.

The language and meaning of the inhibition were designed to embrace proceedings attempting the interpolation of some new term or condition foreign to the original agreement, and therefore inconsistent with and violative thereof. West River Bridge Co. v. Dix, 6 How. 507; S. C. 16 Vt. 446; McCauley v. Brooks, 16 Cal. 11.

Whatever law releases one party from any article of a stipulation voluntarily and legally entered into by him with another, without the direct assent of the latter, impairs its obligation, because the rights of the creditor are thereby destroyed, and these are ever correspondent to and co-extensive

with the duty of the debtor. Jones v. Crittenden, 1 Car. L. Rep. 385; Townsend v. Townsend, Peck, I; Pool v. Young, 7 Mon. 587; Greenfield v. Dorris, I Sneed, 548.

The obligation of a contract may be impaired without being entirely destroyed. The last must include the first, but the first does not necessarily include the latter. A statute can no more destroy than it can impair the obligation of a contract. Robinson v. Magee, 9 Cal. 81.

This provision does not prohibit all legislation in regard to existing contracts. The effect of the law must be looked to in every instance, and if it diminish the binding force of the contract on the party who makes it, then it is obnoxious to the Constitution, otherwise not. Nevitt v. Bank, 14 Miss. 513.

A contract is not to be impaired at all. This is not a question of degree or manner or cause, but of encroaching in any respect on its obligation, dispensing with any part of its force. Planters' Bank v. Sharp, 6 How. 301; S. C. 12 Miss. 28; Walker v. Whithead, 16 Wall. 314; S. C. 43 Geo. 547.

The objection to a law on the ground of its impairing the obligation of a contract, can never depend upon the extent of the change which the law effects in it. Any deviation from its terms by postponing or accelerating the period of performance which it prescribes, imposing conditions not expressed in the contract, or dispensing with the performance of those which are, however minute or apparently immaterial in their effect upon the contract of the parties, impairs its obligation. Green v. Biddle, 8 Wheat. 1; Blanchard v. Russell, 13 Mass. 1; McCracken v. Hayward, 2 How. 608; Commercial Bank v. State, 12 Miss. 439; Winter v. Jones, 10 Geo. 190; People v. Bond, 10 Cal. 563.

All legislation which materially affects the laws for the enforcement of a contract existing at the time it is made, impairs the obligation of the contract. This is the effect, although no reference is made to such laws by the contract, as fully as if they were written out at the time and incorporated into it. Nevitt v. Bank, 14 Miss. 513.

The legislature can not by a subsequent act impair the obligation of a contract by requiring the performance of other conditions not required by the law of the contract itself. The rights as well as the intentions of the parties are fixed by the existing law; therefore to require the performance of other conditions to make the contract operative, is to impair its obligation. The power to impose conditions after the contract is once complete and perfect, is nothing but the power to impair its obligation. Robinson v. Magee, 9 Cal. 81.

The obligation of a contract may be impaired by compelling either party