۱ gation is lessened, in however small a particu- | Rep. 445; 2 Hill, 242; 5 Howard, 342. It is lar, and not merely altering or regulating the remedy alone. 2 Howard, 612; 8 Wheat. 1. Having, it is believed, assigned sufficient reasons to show that the obligation of both of these contracts was impaired, it is now pro-cisions. Let a charter or grant be entirely ex supposed to help enforce, and not impair what the charter requires. But on this, being a very different question, we give no opinion. But look a moment at the other class of de posed briefly to refer to a few precedents bearing on the correctness of this conclusion, chief ly in respect to the most important of the contracts that between the State and the bank. On an examination of the various decisions punged, as in the case of the Yazoo claims in Georgia, and no one can doubt that the obligation of the contract is impaired. Fletcher v. Peck, 6 Cranch, 87. So, if the State expressly engage in a grant, which have taken place in this court on the vi- | that certain lands shall nexer be taxed, and a case was found by the special verdict to have | Mr. Chief Justice Taney and Mr. Justice Danno contract with the assignee, until the new | ments appear to be met and overthrown, but olation of the obligation of contracts, it will be found that this case does not come within the principle of any of those where the decision was, that the new laws were no violation; but, on the contrary, is much like several where the decision decision an annulled them as a clear violation. Thus, where a new law has taken the property of a corporation for highways under the right of eminent domain, which reaches all property, private or corporate, on a public necessity, and on making full compensation for it, and under an implied stipulation to be allowed to do it in all public grants and charters, no injury is committed not atoned for, nothing is 331*]done not allowed *by pre-existing laws or rights, and consequently no part of the obligation of the contract is impaired. See case of The West River Bridge, and authorities there cited, in 6 Howard, 507. So, when the Legislature afterwards tax the property of such corporations in common with other property of like kind in the State, it is under an implied stipulation to that effect, and violates no part of the contract contained in the charter. Armstrong v. Treasurer of Athens County, 16 Peters, 281; see Providence Bank v. Billings, 4 Peters, 514; 11 Peters, 567; 4 Wheat. 699; 12 Mass. Rep. 252; 4 Gill & Johns. 132; 4 Durn & East. 2; 5 Barn. & Ald. 157; 2 Railway Cases, 23. So, when no clause existed in a charter for a bridge against authorizing other bridges near at suitable places, it is no violation of the terms or obligation of the contract to authorize another. Charles River Bridge v. The Warren Bridge et al. 11 Peters, 420. Nor is it, if a law makes deeds by femes covert good when bona fide, though not acknowledged in a particular form; because it confirms rather than impairs deeds, and carries out the original intent of the parties. Watson v. Mercer, 8 Peters, 88. Or if a State grant lands, but makes no stipulation not to legislate further upon the subject, and poceeds to prescribe a mode or form of settling titles, this does not impair the force of the grant, or take away any right under it. Jackson v. Lumpkin, 3 Peters, 280. Nor does it, if a State merely changes the remedies in form, but does not abolish them entirely, or merely changes the mode of record ing deeds, or shortens the statute of limitations. 3 Peters, 280; Hawkins v. Barney's Lessee, 5 Ib. 457. It has been held, also, not only that a Legislature may regulate anew what is merely the remedy, but some State courts have decided that it may make banking corporations subject to certain penalties for not performing their duties such as paying their notes on demand in specie, and that this does not violate any contract. Brown v. Penobscot Bank, 8 Mass. law afterwards passes to tax *them. [*332 State of New Jersey v. Wilson, 7 Cranch, 164. Or that corporate property and franchises shall be exempt, and they are then taxed. Gordon v. Appeal Tax Court, 3 Howard, 133. So, if lands have been granted for one purpose, and an attempt is made by law to appropriate them to another, or to revoke the grant. Terrett v. Taylor, 9 Cranch, 43; Town of Pawlet v. Clark, 9 Cranch, 292. Or if a charter, deemed private rather than public, has been altered as to its government and control. Dartmouth College v. Woodward, 4 Wheat. 518. Or if owners of lands, granted without conditions or restrictions, have been by the Legislature deprived of their usual remedy for mesne profits, or compelled to pay for certain kinds of improvement ovements, for which they were not otherwise liable. Green v. Biddle, 8 Wheat. 1. Or if, after a mortgage, new laws are passed, prohibiting a sale to foreclose it, unless two thirds of its appraised value is offered, and enacting further that the equitable title shall not be extinguished till twelve months after the sale. Bronson v. Kinzie, 1 Howard, 311; McCracken v. Hayward, 2 Ib. 608. These last cases in Wheaton and Howard are very near in point to the present one, though in my view, a less strong and decisivie encroachment on a previous contract than this is. So are the cases very near where all remedy whatever is taken away, and it is held that the obligation of the contract is thus impaired. See some before cited, and 8 Mass. Rep. 430; 2 Gall. 141; 2 Greenl. 294; 1 Howard, 311; 3 Peters, 290; 2 Howard, 608. The whole usefulness and value of a note or contract is in this way destroyed, and that without any reference to the contract itself. For these reasons the judgment below must be reversed. Baldwin et al. v. Payne et al. This case involves several of the questions just discussed in that of The Planters' Bank v. Sharp et al. Some of the points of difference are merely nominal; as, for instance, that the charter of the Mississippi Railroad Company, which transferred the notes in this case, is different. But, it being subsequent in date to the charter to the Planters' Bank, and with "all the usual rights, powers, and privileges of banking which are permitted to banking institutions within the State," the court seemed, by mutual consent of parties, to regard those conferred on the Planters' Bank as extensive as any, and therefore a correct guide here. *Other differences may be more ma- [*333 terial in appearance, as that the transfer in this been in payment of a debt of the bank; and another, that the suit here is in the name of the indorsee, and not, as in the former case, in the name of the promisee. Its being assigned in payment of a debt is, however, no more than was presumed might have been the truth in the other case. And its being sucd in the name either of the indorsee or payee can make little difference on the final construction given by the State court to the prohibitory law in the action of The Planters' Bank v. Sharp et al. That construction, we have seen, was, that it is the transfer itself which is prohibited and made in some degree penal, rather than the action in the name of the indorsee being all which is prohibited. It will be remembered, also, that if the State might be able, by a general repealing law, to prevent a suit in the name of an indorsee, with out impairing any contract in the charter itself, as is argued for the defense, it could hardly do this without impairing the other contract, between the bank and the maker, by which the latter promises to pay any indorsee. Certainly the new prohibitory law ought not to have attempted more than a repeal of the statute allowing suits by indorsees of negotiable paper in their own name. Then the indorsees of notes negotiable, as of notes not negotiable, would still possess a right to sue their notes in the names of the payees. In such a case, there would be some plausibility in the idea, that, though the action would not lie in the name of the indorsee, yet if it could in the name of the payee, for and on his account, the prohibitory law would chiefly affect the remedy, and not the right of action in some form or other. But even then, if the obligation or force or ❘ duty of the contracts, whether with the bank by the State, or with the maker, was impaired in any degree, though under cover of affecting the remedy only, it would come within the constitutional restriction. But how much more must it so come in this case, as well as the other, where, instead of merely changing the obligation so as to render a recovery on the contract not permissible in the name of an assignee, but more inconvenient, expensive, dilatory, and often difficult in the name of another, the payee, the State court of Mississippi hold, that the Legislature, by the prohibitory law of 1840, not only meant to abate a suit in the name of an indorsee, but in the name of the payee, if a transfer had once been made. Substantially, they consider any suit on the note, by anybody, after it has once 334*] been transferred, as *illegal, and the right to enforce the contract to be lost or forfeited forever. This view of the statute of 1840 being regarded as established in Mississippi, renders it clear that in this case, as well as the case of The Planters' Bank v. Sharp et al., the law under which this action has been abated must be considered as having impaired the obligation of contracts; and therefore to be in this respect unconstitutional, and the judgment of the State court erroneous. The judgment below must therefore be reversed, and as a special verdict was found in this case, judgment must be entered on it in favor of the original plaintiffs. iel dissented. Mr. Justice McLean: So far as the seventh section of the act in question has been construed, by the Supreme Court of Mississippi, to invalidate the note between the bank and the payee, it is unconstitutional. The fair import of the provision takes away only the negotiability of the instrument. But the courts of Mississippi have decided, where a note has been assigned in violation of the statute, that no suit can be sustained on the note, either in the name of the assignee or of the payee. This impairs the obligation of the contract, which the Constitution inhibits. The argument, that, where the bank, attempts to transfer a note by a void indorsement, it must be re-indorsed to enable the bank to sue in its own name as payee, is unsustainable. A void indorsement is no indorsement, and it can have no effect on the validity of the note. The section declares, that "it shall not be lawful for any bank in this State to transfer, by indorsement or otherwise, any note, bill receivable, or other evidence of debt; and if it shall appear in evidence, upon the trial of any action upon such note, bill receivable, or other evidence of debt, that the same was transferred, the same shall abate upon the plea of the de fendant." The object of the statute was to secure the right of the debtors of a bank to pay their debts in its own paper. This they could not do, if the notes, before they were payable, had been assigned by the bank. No fair construction of the seventh section can authorize a forfeiture of the note, by reason of the illegal indorsement. It is, therefore, unnecessary to consider whether such a provision would be constitutional. The bank had the power, under its charter, to assign promissory notes. If this were not so, the law to prohibit the *assignment [*335 would have been unnecessary. There being no express power in the charter of the bank to indorse notes, it must be considered as exercising the power under the general law making notes negotiable; and in this respect it must stand on the same ground as an individual. And this presents the question, whether the repeal of the law making notes negotiable by banks can affect notes executed before the repeal. A majority of the judges hold that a provision so construed is void, as it impairs the obligation of the contract. I dissent from this conclusion. An individual holds a note, which, under the statute, is negotiable; but the statute is repealed. Does this take away the negotiability of the note? I think it does. There can be no doubt of this, unless such a construction shall impair the obligation of the contract. Now, what obligation is violated by this construction? It is said, that the maker of the note promised to pay to the assignee of the payee. This is admitted. But until the note be assigned, there can be no assignee. The indorsement is a new contract between the indorser and the indorsee; and when this contract is made, it can no more be impaired than the contract between the maker and the payee of the note. A promise to pay to A B or his assignee is contract of assignment be made. The promise is to pay to the indorsee, if the payee of the note shall indorse it. But the payee is under no obligation to indorse the note. And if there be no obligation, how can it be impaired? A contract binds a party either to do or not to do a certain thing. The maker of the note, on a certain contingency, binds himself to pay the indorsee, and that contingency depends upon the will of the payee; but until that will is exercised, there is no obligation by the maker. The payee has power to bind the maker of the note to pay its contents to some other person; but until that power is exercised, there is no contract which can be impaired. Suppose a power of attorney was given to A by B, to enable him to bind B, by a written instrument, to do a certain thing which may legally be done, but, before the instrument is executed, the thing is made unlawful; does this impair the obligation of the contract? The instrument contemplated has no existence; B cannot complain that he has not been bound to do the act, and on what ground can A complain? Is his contract impaired? He has no contract. He had the power to make a contract, which he failed to exercise. And this is the principle involved in the case now under consideration. The payee had a discretionary 336*] power to bind the maker of the *note, but he did not exercise it until the assignment of the note was made illegal. Is a mere power of attorney to make a contract within the Constitution? It is essential, to constitute a contract, that there shall be two parties bound by it. Now, the payee is not bound to assign the note, though the maker has authorized him to assign it. This, then, is a mere power to make a contract, which may, or may not, at the discretion of the payee, be exercised. It is a mere unexecuted power to make a contract, and is, in my judgment, not within the Constitution. will content myself with succinctly stating the decisive conclusions of my own mind upon the only question properly presented by this record, and the legal grounds on which those conclusions are bottomed. The rights of the plaintiffs in error, whatever they may be, it must be borne in mind, are derived from the charter of the Mississippi Railroad Company, or from that of the Planters' Bank of Mississippi, as supposed to possess rights and power more comprehensive than those vested in the former company; but from whichsoever of those companies the plaintiffs in error may choose to deduce their rights, these must be restricted to the rights and authority vested in the source from which they are *drawn. Both the Mis- [*337 sissippi Railroad Company and the Planters" Bank of Mississippi are corporations created by statute, deriving their existence and every power and attribute they ever possessed from the laws which gave them existence, and from these only. The doctrine has been long and repeatedly affirmed by this court, that, in interpreting the powers and rights of corporations, an essential distinction must be taken between corporations existing by the common law (often, nay, necessarily, traceable to a remote and obscure antiquity), and those which are created by statute, whose constitutions and powers are defined and ascertained by accessible and visible proofs. Into the composition or practices of the former, tradition, implication, or usage may enter, and thus give room for assumptions of power; with respect to the latter, no such rule, or rather misrule, has obtained or been permitted, especially by the settled decisions of this day. The adjudications of this court, as has been already stated, are too explicit to admit of doubt on this subject. Thus in the case of Head and Amory v. The Providence Insurance Company, 2 Cranch, 127 Chief Justice Marshall says: "Without ascribing to If the charter of the bank had contained a ❘ this body (the Insurance Company), which in special provision, authorizing it to assign promissory notes, no subsequent act of the Legislature could repeal or modify such provision, against the consent of the bank. Mr. Justice Daniel: Differing from the majority of the court in its corporate capacity is the mere creature of the act to which it owes its existence, all the qualities and disabilities annexed by the common law to ancient institutions of this sort, it may correctly be said to be precisely what the incorporating act has made it; to derive all its powers from that act, and to be capable of ex the decision just pronounced, I might, never-erting its faculties only in the manner which theless, have been disposed to acquiesce in that decision, had it related to questions merely of property or of individual interests; but embracing as it does a construction of the Constitution, and annulling at the same time a legislative act of a sovereign State, I cannot feel warranted in yielding by silence a seeming approbation of conclusions which my judgment entirely repels. My deliberate opinion, then, is, that the statute of Mississippi of February 21st, 1840, by its seventeenth section, comes not in conflict with the tenth section of the first article of the Constitution; that it in no wise impairs the obligation of any contract between the State and the Mississippi Railroad Company, formed by grant of the charter of that company, nor as existing with the plaintiffs in error as claiming under them. An elaborate review of the arguments on which the pretensions of the plaintiffs in error are urged is not here deemed necessary, nor will I enter much in detail upon the reasons by which those argu that act authorizes. To this source of its being, then, we must recur, to ascertain powers, and to determine whether it can complete a contract by such communications as are in this record." In the case of Dartmouth College v. Woodward, 4 Wheat. 636, it is said by the court, that "a corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being a mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence." In the case of The Bank v. Dandridge, 12 Wheat. 64 this court said: "What-. ridge ever may be the implied powers of aggregate corporations at the common law and the modes by which those powers are to be carried into operation, corporations created by statute must depend, both for their powers and the mode of exercising them, upon the true construction of the statute itself." In the case of The Bank of Augusta v. Earle, 13 Peters, 587 the several | clause in the charter which authorizes the ex authorities just mentioned are cited in the opinion of the court; all of them approved, 338*] and none of them, *it is presumed, will be questioned as not laying down the law with perfect accuracy. ercise of the usual banking powers granted to the banks of Mississippi, first, because in no charter granted by the State is it shown that such a right is expressly conferred; second, it is manifest that a traffic in the sale of its own paper, or in notes or bills discounted, is conformable neither with the regular functions of a bank, nor reconcilable with the purposes of its institution. Banks are usually created for the purpose of making loans, and this in a medium, in theory at least, equal to money; not for the purpose of borrowing, or of raising means to eke out their daily existence by selling off their securities or their own paper. Their establishment rests upon the idea of their possessing funds of their own as the foundation of their credit and of their circulation. The practice of becoming brokers for the sale of their own paper or the paper of their customers, to put themselves in funds, is not, therefore, one of their regular functions, and can flow only from an abuse of these functions, and is a perversion of the legitimate ends of their creation. So, too, it is entirely inadmissible to place this practice of brokerage by the bank upon the mere absence of an inhibition in the charter; such a mode of reasoning cuts up entirely the admission that the banks have no power except such as is expressly granted or necessarily implied. The fallacy of the idea, that the right to dispose of effects conferred by the charter of the Planters' Bank implied the right of an habitual and unrestricted sale or Such being the well settled rule of this court with respect to statutory corporations, let us inquire into its operation on the case before us. Neither by the charter granted to the Mississippi Railroad Company, or to the Planters' Bank of Mississippi, nor to any other banking corporation within the State, was the power ever directly given to assign bonds, bills, or promissory notes. Is this power necessarily implied in any of the express grants contained in the charters now under consideration? It is admitted on all sides that the clause in this charter of the Planters' Bank which authorizes the bank to discount bills of exchange and notes, and to make loans, contains no such direct grant; but it is said that the bank is authorized to possess and receive lands, rents, tenements, hereditaments, goods, chattels, and effects, to a certain amount, and to grant, demise, alien, or dispose of the same for the good of the bank; and that this authority confers the power of assigning notes discounted by the corporation. Could the doctrine of implied powers, in contravention of the express decisions of this court just cited, be extended in its utmost latitude to these statutory corporations, still it would seem dificult, even by the greatest violence of construction, to torture the language of this charter into an expression | brokerage of discounted notes, is exposed by adverting to another provision of the charter, by which the amount of effects of every kind of the meaning here ascribed to it. The right to acquire and to dispose of effects cannot, by the natural import of language, nor by any re- | which the bank was permitted to acquire and ceived intendment, be made to signify the power to discount bills and notes; much less can it be interpreted to mean the power to transfer bills and notes discounted, or securities of any description, and beyond this, even, the power (in opposition to the principles of the common law in reference to choses in action, of investing the assignee with the right of main taining an action at law in his own name. The extravagance of the construction contended for on behalf of the plaintiffs may be seen by bringing it to another test. Let it be supposed that the charters of these companies contained not one word about rights and powers of banking, as then permitted to other corporations in the State of Mississippi; suppose, too, they had been silent as to any right to discount bills and notes, and had been limited to the simple power of receiving and possessing goods, chattels, and effects, and of disposing of such effects for the good of the bank; would it be pretended that, under this latter provision, the power of discounting bills or notes, or of discounting at all, was given by the mere import of the word "effects"-that the power of receiving and disposing of effects meant the power of discounting bills and notes? This can 339*] *hardly be pretended. If, then, this term be not synonymous with the words "bills" and "notes" when taken in connection with the power of discounting and of making loans, how can it become so by being connected with the right of acquisition and enjoyment, or with the jus disponendi? The power to sell or assign discounted notes cannot be deduced from the dispose of was positively limited to a specified amount. The power of the bank being thus restricted, that power could by no sound reasoning be made coincident or co-extensive with regular and permanent operations on the part of this corporation; for if its banking powers were deducible from such a limited privilege, or were dependent upon it, of course, when this permitted limit should be attained, the operations of the bank would be at an end. It is clear, therefore, that these corporations, restricted as are all statutory corporations under the decisions of this court, to the express grants contained in their charters, and to implications necessary to and inseparable from those grants, never were by the provisions of *their charters invested with the power [*340 to assign bills or notes, and much less by such assignment to invest their assignee with the right of suing at law; that whatever power of assignment these corporations at any time may have possessed, and whatever the effect implied in such assignment, both were conferred upon them in common with all other persons, natural or artificial, within the State, by a general public law, subject at all times to modification or repcal by the authority which enacted it. Vide section 12 of the statute, Howard and Hutchinson's Laws of Mississippi, p. 373.) The actual repeal of such a statute cannot correctly be regarded as the violation of any vested right, or the impairing of the obligation of a contract, for no one can claim to have a perfect and vested right, through all future time, in the mere capacity to do an act, from the absence of a law forbidding that act. A pretension like this would forestall and prevent legislation upon every subject. A wholly different state of things would have existed had the assignment to the plaintiffs been made anterior to the repeal of the statute, for then the rights of these parties would have been vested and complete; but the assignment was in this instance subsequent, by more than a year, to the passage of the repealing statute, was a new and separate contract, and entered into with necessary knowledge of its provisions, and made apparently in defiance thereof. This view of the question is clearly and forcibly presented by the Supreme Court of Louisiana, in the case of Hyde et al. v. Planters' Bank of Mississippi, S Robinson, 416, a case arising upon the laws and charters now under consideration, and in all its features essentially, nay, mutato nomine, literally, the same with the present. It has been said, that, in the case from 8 Robinson, the note was made after the enactment of the repealing statute, I think that this statement is not warranted by the statement of facts in that case. Certainly the reasoning of the court rests on no such hypotheпуро sis, for it covers the whole of the language and policy of the statute of Mississippi, and vindicates them to the utmost extent. In this case, the note was assigned after the enactment of the repealing law, and with full knowledge thereof, and the assignment was an independent and posterior contract which the law had forbidden. The question, then, as to the validity of the statute of Mississippi seems to resolve itself into this inquiry, whether a sovereign State of this Union possesses the right within her own territory to regulate the formation of contracts, to define the rights and interests such contracts shall give to the parties thereto, and to declare the modes and extent in and to which these may be enforced by her own 341*] tribunals. *To such an inquiry I can give none but an affirmative answer; and any other, I feel assured, is not evoked either by the language or spirit of the federal Constitution, and would be highly unjust and inconvenient with respect to the States. With regard to the plaintiffs in error no injustice nor hardship of any kind is perceived in enforcing against them the provisions of the statute of 1840. In the first place, they have, with full knowledge of the law, placed them selves directly in the attitude of resistance thereto; for they have entered into an agree ment explicitly inhibited upon grounds of public policy, and this long after such inhibition was proclaimed to every person within the State. In the next place, there surely can be no merit in a combination, the effects and manifest purposes of which were to deny to the holders of the notes of these banking corporations the power of making payment to them in their own currency, and to enable the latter to seize or to appropriate to themselves or their favorites the substance of those very note holders to whom such right of payment was denied. A proceeding thus subversive of justice has not been heretofore sanctioned by this court, and in one instance has been, to a certain extentindeed, as I think, to the whole length of the present case-directly condemned. The case of The United States v. Robertson, 5 Peters, 641, was a case in which a judgment had been recovered by the United States against the Bank of Somerset for an amount of money which had been deposited by a collector in that bank. By an act of Congress of the year 1818, it was provided that in any suit thereafter instituted by the United States against any corporate body for the recovery of money upon any bill, note, or other security, it should be lawful to summon as garnishees the debtors of such corporation, who were required to state on oath the amount in which they stood indebted at the time of serving such summons, for which amount judgment should be entered in favor of the United States, in the same manner as if it had been due and owing to the United States. On the 9th of February, 1819, a year after the act of Congress giving the remedy by attachment to the United States, the Legislature of Maryland passed an act declaring that, in payment of any debt due to or judgment obtained by a bank within that State the notes of such bank should be received. Attachments were laid in behalf of the United States, after their judgment against the Bank of Somerset, on debts in the hands of various debtors to the bank, and on some of these attachments judgments had been obtained. It was contended in behalf of these garnishees, that they had a right to discharge their debts in the notes of the Bank of Somerset, as well in those cases in *which judgment had been obtained [*342 on atachment by the United States as in those wherein there were no judgments. Upon this question Chief Justice Marshall, in delivering the opinion of the court (p. 659), remarks, first, upon the Act of Congress, of 1818, "That it operates a transfer from the bank to the United States of those debts, which might be due from the persons who should be summoned as garnishees. They become, by the service of the summons, debtors of the United States, and cease to be debtors of the bank. But they owed to the United States precisely what they owed to the bank, and no more." 2. "That the Act of the Legislature of Maryland of 1819, so far as respects debts on which judgments have not been obtained, embodies the general and just principles respecting effects, which are of common application. Every debtor may pay his creditor with the notes of that creditor. They are an equitable and legal tender. So far as these notes were in possession of the debtor at the time he was summoned as garnishee, they form a counter claim, which diminishes the debt due to the bank to the extent of that counter claim. But the residue becomes a debt to the United States, for which judgment is to be rendered, May this judgment be discharged by the paper of the bank? On this subject the court are divided. Three of the judges are of opinion, that, judges a by the nature of the contract, and by the operation of the act of Maryland upon it, an original right existed to discharge the debt in the notes of the bank, which original right remains in full force against the United States, who come in as assignees in law, and not in fact, and who must therefore stand in the place of the bank. Three of the judges are of opinion that the right to pay the debt in the notes of the bank does not enter into the contract." May |