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CHAPTER XXXIV.

PROHIBITIONS ON THE STATES-IMPAIRING
CONTRACTS.

§ 696. THE remaining clause, as to impairing the obligation of contracts, will require a more full and deliberate examination.

§ 697. In the first place, what is to be deemed a contract, in the constitutional sense of this clause ? A contract is an agreement to do, or not to do, a particular thing; or (as was said on another occasion) a contract is a compact between two or more persons. A contract is either executory, or executed. An executory contract is one, in which a party binds himself to do, or not to do, a particular thing. An executed contract is one, in which the object of the contract is performed. This differs in nothing from a grant; for a contract executed conveys a chose in possession; a contract executory conveys only a chose in action. Since, then, a grant is in fact a contract executed, the obligation of which continues; and since the constitution uses the general term, contract, without distinguishing between those, which are executory, and those, which are executed; it must be construed to comprehend the former, as well as the latter. A state law, therefore, annulling conveyances between individuals, and declaring, that the grantors shall stand seized of their former estates notwithstanding those grants, would be as repugnant to the constitution, as a state law discharging the vendors from the obligation of executing their contracts of sale

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by conveyances. It would be strange, indeed, if a con-
tract to convey were secured by the constitution, while
an absolute conveyance remained unprotected. That
the contract, while executory, was obligatory; but when
executed, might be avoided.

§ 698. Contracts, too, are express, or implied. Express contracts are, where the terms of the agreement are openly avowed, and uttered at the time of the making of it. Implied contracts are such, as reason and justice dictate from the nature of the transaction, and which therefore the law presumes, that every man undertakes to perform. The constitution makes no distinction between the one class of contracts and the other. It then equally embraces, and applies to both. Indeed, as by far the largest class of contracts in civil society, in the ordinary transactions of life, are implied, there would be very little object in securing the inviolability of express contracts, if those, which are implied, might be impaired by state legislation. The constitution is not chargeable with such folly, or inconsistency. Every grant in its own nature amounts to an extinguishment of the right of the grantor, and implies a contract not to re-assert it. A party is, therefore, always estopped by his own grant. How absurd would it be to provide, that an express covenant by him, as a muniment attendant upon the estate, should bind him for ever, because executory, and resting in action; and yet, that he might re-assert his title to the estate, and dispossess his grantee, because there was only an implied covenant not to re-assert it.

$699. In the next place, what is the obligation of a contract? It would seem difficult to substitute words more intelligible, or less liable to misconstruction, than these. And yet they have given rise to much acute

disquisition, as to their real meaning in the constitution. It has been said, that right and obligation are correlative terms. Whatever I, by my contract, give another a right to require of me, I, by that act lay myself underan obligation to yield or bestow. The obligation of every contract, then, will consist of that right, or power over my will or actions, which I, by my contract, confer on another. And that right and power will be found to be measured, neither by moral law alone, nor by universal law alone, nor by the laws of society alone; but by a combination of the three; an operation, in which the moral law is explained, and applied by the law of nature, and both modified, and adapted to the exigencies of society by positive law. In an advanced state of society, all contracts of men receive a relative, and not a positive interpretation. The state construes them, the state applies them, the state controls them, and the state decides, how far the social exercise of the rights, which they give over each party, can be justly asserted. Again, it has been said, that the constitution distinguishes between a contract, and the obligation of a contract. The latter is the law, which binds the parties to perform their agreement. The law, then, which has this binding obligation, must govern and control the contract in every shape, in which it is intended to bear upon it. Again, it has been said, that the obligation of a contract consists in the power and efficacy of the law, which applies to, and enforces performance of it, or an equivalent for non-performance. The obligation does not inhere, and subsist in the contract itself, proprio vigore, but in the law applicable to the contract. And again, it has been said, that a contract is an agreement of the parties; and, if it be not illegal, it binds them to the extent of their stipulations. Thus, if a

party contracts to pay a certan sum on a certain day, the contract binds him to perform it on that day, and this is its obligation.

§700. It seems agreed, that, when the obligation of contracts is spoken of in the constitution, we are to understand, not the mere moral, but the legal obligation of contracts. The moral obligation of contracts is, so far as human society is concerned, of an imperfect kind, which the parties are left free to obey or not, as they please. It is addressed to the conscience of the parties, under the solemn admonitions of accountability to the Supreme Being. No human lawgiver can either impair or reach it. The constitution has not in contemplation any such obligation, but such only, as might be impaired by a state, if not prohibited. It is the civil obligation of contracts, which it is designed to reach, that is, the obligation, which is recognised by, and results from the law of the state, in which it is made. If, therefore, a contract, when made, is by the law of the place dclared to be illegal, or deemed to be a nullity, or a nude pact,it has no civil obligation, because the law in such cases forbids its having any binding efficacy, or force. It confers no legal right on the one party, and no correspondent legal duty on the other. There is no means allowed, or recognised, to enforce it ; for the maxim is, ex nudo pacto non oritur actio. But when it does not fall within the predicament of being either illegal, or void, its obligatory force is coextensive with its stipulations.

§ 701. Nor is this obligatory force so much the result of the positive declarations of the municipal law, as of the general principles of natural, or, (as it is sometimes called) universal law. In a state of nature, independent of the obligations of positive law, contracts

may be formed, and their obligatory force be complete. Between independent nations, treaties and compacts are formed, which are demeed universally obligatory; and yet in no just sense can they be deemed dependent on municipal law. Nay, there may exist (abstractly speaking) a perfect obligation in contracts, where there are no known and adequate means to enforce them; as, for instance, between independent nations, where their relative strength and power preclude the possibility, on the side of the weaker party, of enforcing them. So in the same government, where a contract is made by a state with one of its own citzens, which yet its laws do not permit to be enforced by any action or suit. In this predicament are the United States, who are not suable on any contracts made by themselves; but no one doubts, that these are still obligatory on the United States. Yet their obligation is not recognised by any positive municipal law in a great variety of cases. It depends altogether upon principles of public or universal law. Still, in these cases there is a right in the one party to have the contract performed, and the duty on the other side to perform it. But, generally speaking, when we speak of the obligation of a contract, we include in the idea some known means acknowledged by the municipal law to enforce it. Where all such means are absolutely denied, the obligation of the contract is understood to be impaired, though it may not be completely annihilated. Rights may, indeed, exist without any present adequate correspondent remedies between private persons. Thus, a state may refuse to allow imprisonment for debt; and the debtor may have no property. But still the right of the creditor remains; and he may enforce it against the future property of the debtor. So

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