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A statute imposing a tax on a mortgage is valid, for it affirms the contract, and taxes the subject for maintaining it. Cook v. Smith, 30 N. J. 387.

A bond received as a security for the purchase money of property, or for the payment of a loan of money, may be taxed to any extent required by the State government, for all property is taken subject to the taxes that may be laid by the government which protects it. Weston v. Charleston, Harp. 340; S. C. 2 Pet. 449.

A tax upon annual rents reserved in leases does not impair the obligation of any contract. Loring v. State, 16 Ohio, 590; Livingston v. Hollenbeck, 4 Barb. 9.

A tax upon a new subject, or an increased tax on an old one, does not impair the obligation of a contract, although such taxation may affect particular contracts, as it may increase the debt of one person and lessen the security of another, or may impose additional burdens on one class and release the burdens of another. North Mo. Railroad v. Maguire, 20 Wall. 45; S. C. 49 Mo. 490.

A State may tax bonds issued by itself for borrowed money. Champaign Bank v. Smith, 7 Ohio St. 42.


A State tax upon bonds of a corporation held by non-residents is void, for no law of the State inconsistent with the terms of a contract made with or payable to parties out of the State, can have any effect upon the contract while in the hands of such parties or non-residents. State Tax on Foreign Held Bonds, 15 Wall. 300; contra, Maltby v. Reading & Col. R. R. Co. 52 Penn. 140; Susquehanna Canal Co. v. Comm. 72 Penn. 72; Del. R. R. Co. v. Comm. 66 Penn. 64; Pittsburgh F. W. & C. R R. Co. v. Comm. 66 Penn. 73 ; s. C. 3 Brews. 355.

The rights of a purchaser at a tax sale are derived from the contract which the law authorized to be made at the time of the sale, and if that was for an absolute deed, when the time for redemption expires, a statute which subsequently extends the time of redemption is, void. Robinson v. Howe, 13 Wis. 341 ; Dikeman v. Dikeman, 11 Paige, 484; contra, Gault's Appeal, 33 Penn. 94.

A statute allowing a purchaser of land at a tax sale to recover the money paid to the collector above the taxes and costs does not, upon giving him an indemnifying bond, violate any contract against the consent of any person whose consent is necessary. Smith v. Merchand, 7 S. & R. 260.

A statute requiring that the holder of a certificate of tax sale shall give notice to the occupant of the land of his intention to apply for a deed a certain time before doing so, is valid. Curtis v. Whitney, 13 Wall. 68.


If the legislature does not attempt to lessen or impair the effect of a tax deed as evidence of matters contained in it, or graft upon the contract some new conditions, it may regulate the mere form or verbiage of the conveyance by an act passed after the sale. Lain v. Shepardson, 18 Wis. 59.

If a tax deed by the law existing at the time of its execution is conclusive evidence of the regularity of the sale, a subsequent act making it only prima facie evidence is void. Smith v. Cleveland, 17 Wis. 556.


Where a State issues bonds for its debts, and provides that the coupons shall be receivable for taxes, this provision can not be repealed by a subsequent act. Antoni v. Wright, 22 Gratt. 833.

Bank Notes.

If the charter of a bank whose stock is owned by the State, contains a provision that the notes of the bank shall be received in payment of all debts X due to the State, a repeal of this provision can not affect the notes in circulation at the time of the repeal. Woodruff v. Trapnall, 10 How, 190; S. C. 8 Ark 236; Paup v. Drew, 19 How. 218; S. C. 9 Ark. 205; Trigg v, Drew, io How. 224.

Where a statute at the time of the issue of the bills of a bank founded on the funds of the State, provides that such bills as are payable in gold or silver coin shall be receivable in payment of taxes, a law providing that depreciated bills shall not be received is valid. Graniteville Manuf. Co. v. Roper, 15 Rich. 138.

If a State, in establishing a bank as a State institution, provides that its notes shall be receivable for taxes due the State, this provision is a contract between the State and every noteholder, the obligation of which can not be impaired. Furman v. Nichol, 8 Wall. 44.

Such a guaranty is not a personal one. It attaches to the note the same as if it were written on the back of it, and goes with the note into the hands of every holder. Furman v Nichol, 8 Wall. 44.

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A statute appropriating the assets of a bank whose capital was furnished by the State to pay its debts, operates as an assignment, and can not be repealed by a subsequent act. Barings v. Dabney, 19 Wall. 1.

If a bank is created, and its capital furnished by the State, a statute appropriating its assets to pay a debt of the State guaranteed by the bank, to the prejudice of the creditors of the bank, is void. Barings v. Dabney, 19 Wall. 1.

If the notes of a bank are made payable at a particular place, a statute


which requires it to receive them in payment of notes of other banks presented for payment by it, is void because it impairs the obligation of the

Bank v. Bank of Cape Fear, 13 Ired. 75.


A statute creating an agent for a bank without its knowledge or consent, and authorizing that agent to receive at his discretion, against the consent of the bank, whatever currency he may choose to receive in payment of debts due to the principal, and making such payment a satisfaction of the debt, is void. Bank v. McVeigh, 20 Gratt. 457.

A law which throws the burden of proof on the plaintiff, to show that bank bills which are the cause of action have never been used in aid of the rebellion, if the defendant will swear that he has reason to believe that they were so used, imposes upon the plaintiff an impossibility, and is tantamount to destroying the contract on the simple oath of the defendant as to his belief, and is void. Marsh v. Burroughs, 1 Woods, 463.

A statute which permits bank notes to be tendered for a debt due to the bank, but assigned before the passage of the statute, is unconstitutional. As between the original parties to a note, a law of set-off, though enacted subsequently to the execution of the note, may apply to it, for in this view it relates to the remedy. But when the note is in the hands of a bona fide assignee, an offset as between the original parties to the note can not be applied to it without essentially impairing the legal effect of the contract of assignment. Dundas v. Bowler, 3 McLean, 397.

Validating Contracts. A law which gives validity to a void contract, does not impair the obligation of that contract. To create a contract, and to impair or destroy one, do not mean the same thing. Satterlee v. Matthewson, 2 Pet. 380; Hess v. Werts, 4 S. & R. 356; Bleakney v. Farmers' Bank, 17 S. & R. 64; Bridgeport v. Railroad Co. 15 Conn. 475; Central Bank v. Empire Stone Dressing Co, 26 Barb. 23.

A statute repealing a law which prohibited suits against Indians is valid, and does not impair the obligation of contracts. Stokes v. Redman, 5 R. I. 405.

A statute which makes previous payments of usurious interest valid, and allows the party to retain them, does not impair the obligation of the contract. Sparks v. Clapper, 30 Ind. 204.

A statute permitting the enforcement of usurious contracts is valid, although it applies to prior contracts. Woodruff v. Scruggs, 27 Ark. 26; Town v. Peace, 25 Gratt. 1; Curtis v. Leavitt, 15 N. Y. 9; Welch v. Wadsworth, 30 Conn. 149; Wood v. Kennedy, 19 Ind. 68; Andrews v.

Russell, 7 Blackf. 474; Wilson v. Hardesty, 1 Md. Ch. 66; Baugher v. Nelson, 9 Gill, 299; Savings Bank v. Bates, 8 Conn. 505; Grimes v. Doe,

9 8 Blackf. 371; Savings Bank v. Allen, 28 Conn. 97; contra, Morton v. Rutherford, 18 Wis. 298.

An act altering the statute of frauds, and giving validity to a contract which was previously void, does not violate the Constitution. Baker v. Herndon, 17 Geo. 568.

The repeal of a statute prohibiting stock-jobbing may give validity to prior contracts. Washburn v. Franklin, 35 Barb. 599.

A statute requiring a municipal corporation to pay for the services of an officer, rendered under a prior act which required that the services should be paid for by other persons, does not impair the obligation of a contract. Southworth v. City, 24 La. Ann. 312.

A State may make the breach of a pre-existing contract criminal, although it was before only the subject of a suit for damages. Blann v. State, 39 Ala. 353.

A State Constitution which provides that persons bound to service by contract or indenture without collusion or fraud, shall be held to the specific performance of their contracts or indentures, although the same were void when such State Constitution was adopted, is not in conflict with the Constitution of the United States. Phoebe v. Jay, Breese, 207.

Municipal Ordinances.

There is a distinction between a municipal ordinance for the public safety or good, and an ordinance for the pecuniary benefit of the corporation itself. An ordinance requiring a license fee after the granting of a right run street cars in a city, is void. Mayor v. Second Av. R. R. Co. 34 Barb. 41.

A municipal corporation can not revoke a donation actually made, or impose new terms or duties upon the donee. Louisville v. University, 15 B. Mon. 642.

The repeal of an ordinance of a municipal corporation requiring a bond from an auctioneer, can not destroy or affect any right which was acquired by any person under the ordinance. McMechen v. Mayor, 2 H. & J. 41.

When a municipal corporation engages in things not public in their nature, it acts as a private individual-no longer legislates, but contractsand is as much bound by its engagements as a natural person. Western Saving Fund v. Philadelphia, 31 Penn. 185; Western Saving Fund v. Philadelphia, 31 Penn. 175.

If a municipal corporation sells lots purporting to be bounded on a public street, the use of such space as a street passes as appurtenant to the grant, and the corporation can not afterward alter or defeat the dedication. Breed v. Cunningham, 2 Cal. 361.

Commercial Paper.

A statute which provides that if the last day of grace falls on a holiday, the negotiable note or bill shall be payable on the preceding day, is valid. Days of grace make no part of the original contract. Barlow v. Gregory, 31 Conn. 261.

A statute which provides that an indorser shall be bound without demand, notice or protest, impairs the obligation of the contract. Farmers' Bank v. Gunnell, 26 Gratt. 131.

A statute changing the mode of giving notice of protest to indorsers is valid, and applies to notes made prior to its passage. Levering v. Washington, 3 Minn. 323.

Special Instances.

The repeal of a law which is contrary to the Constitution of the State and void, does not impair the obligation of any contract. Vanhorne v. Dorrance, 2 Dall. 304; Walker v. Tipton, 3 Dana, 3.

If a statute is void, its repeal does not impair the obligation of contracts. Barings v. Dabney, 19 Wall. 1.

A vote of the people authorizing a municipal corporation to subscribe for stock in a railroad corporation does not form a contract. Until the subscription is actually made, the contract is unexecuted. List v. Wheeling, 7 W. Va. 501.

If a railroad commissioner merely has the power to approve or disapprove of the abandonment of a station, his consent upon condition that the corporation build a depot at another place, does not constitute a contract that binds the State. State v. New Haven & N. R. R. Co. 43 Conn. 351.

An act of the legislature is passed only when it has gone through all the forms made necessary by the State Constitution to give it force and validity as a binding rule of conduct for the citizen. Its passage dates from the time it ceases to be a mere proposition or bill and passes into a law. It can not impair a contract made while it is pending before the executive, any more than it can destroy a legal obligation existing before it was moved in by the legislature. Wartman v. Philadelphia, 33 Penn.

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