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each case the security was contaminated by a trans- seem to be sound on principle, for all the later cases action which the chancellor declared a mere shift hold that interest may be recovered upon interest to cover usury.
from the time payment is demanded, and as the In The State of Connecticut v. Jackson, 1 Johns. Ch. assignee stands in every respect in the shoes of his 13, Chancellor Kent examined the subject of com assignor he ought to be able to avail himself of the pound interest as regarded in equity, and laid down demand as his assignor might. the principles by which our courts have since been Lord Thurlow, although he expressed the opinion guided in their consideration of this subject. The that there was nothing unjust in allowing interest question was upon the confirmation of the report of | upon interest, said that he would have to overturn a master to whom it had been referred to compute all the proceedings of the Court of Chancery if he the amount due upon a bond and mortgage; the allowed it generally. In certain cases it has always report contained a computation and account allow been allowed, as where there is a settlement of an ing interest upon the installments of interest due and account between the parties after interest has beunpaid. He examines the principles and decisions come due; where there is an agreement to allow it bearing upon the subject in an opinion unusually after it has become due or where the master's report lucid and learned even for our great chancellor, and computing the sum due for principal and interest declares that compound interest has never been has been confirmed, for it is then in the nature of a allowed except under special circumstances.
judgment. It appears that the question of allowing com- While such special circumstances may turn interpound interest was raised in Chancery as early as est already due into principal, and permit interest 4 Car. I. At that early period it was laid down as to accrue upon it, an agreement to pay interest upon the rule that interest upon interest was not allowed. the interest that may thereafter accrue, if it is not paid An exception was afterward (Car. II) allowed in favor | punctually at the stated times, will not be enforced. of the assignee of a mortgage, and the amount of The first case upon this point found in the books, is the principal and interest really and bona fide due Sir Thomas Meers’ Case, cited by Lord Chancellor and paid by him was allowed to carry interest. But Talbot in Bosanquett v. Dashwood, Ca. Temp. Talk this case was overruled by Lord Chancellor Shaftes- | 40, and followed in succeeding cases. bury, who allowed interest on the principal sum Sir Thomas Meers had inserted a covenant in scon only. Afterward the Lord Keeper said such an mortgages that if the interest was not paid puno allowance of interest upon interest to the assignee | ally at the day, it should from that time, and sati. was reasonable and just, although he appears to from time to time be turned into principal. Lur have followed the precedent just mentioned. Sub- Chancellor Harcourt relieved the mortgagors fruy sequently, in Gladman v. Heuchman, 2 Vernon, 135, the covenant as unjust and oppressive. This estal such interest was allowed to the assignee. The lished principle of English jurisprudence has never cases on this point are loose and contradictory and been questioned in this State. But it would appear even on the general question of the allowance of that the rule, in its strictness, applied to landed compound interest the dicta up to 1688 are both security only, for as appears from the observations of ways. But since the revolution the general rule Lord Thurlow and Lords Commissioners Mather and that interest upon interest is not allowed except | Ashurst,compound interest might be allowed between under peculiar circumstances, has been well estab- the parties to mere personal agreements, upon the lished, although the rights of an assignee of a ground of a contract to allow it, either express or to be mortgage may still be in doubt. In our own reports inferred from circumstances. But while our judges we are not without at least dicta upon this subject. have noticed this distinction, they seem to have inThe case of Jackson v. Campbell, ö Wend. 572, al-clined to extend the rule to debts on simple contract. though decided upon another point, touches this While such an agreement will not be enforced, it is question. It is there laid down that " where a not to be regarded as usurious, and will not conmortgage is assigned with the concurrence of the taminate and avoid the rest of the contract. mortgagor, the assignee shall be entitled to interest In Stewart v. Petrie, 55 N. Y. 621, ten years' inupon the interest paid by him, as well as upon the terest was due on a mortgage, and foreclosure proprincipal of the mortgage; but if the assignment is ceedings were discontinued on a note being given made without the privity of the mortgagor it does for arrears and interest; suit was brought on the not carry interest. This does not seem to go quite note, and the defense of usury was interposed. In as far as the anonymous case in Banbury's Reports, the opinion of the court, per Allen, J., it is said: 41, where it is said that if the mortgagee had “The receiving of interest upon interest is not a applied to the mortgagor before the assignment and violation of the Statute of Usury, as no more than demanded his money and required bim to join in seven per cent is in such cases taken or received. It the assignment, if the mortgagor refuses either to is true that an agreement in advance for the paypay or join, the assignee shall recover interest both ment of interest upon interest, as the saine shall acon the principal and interest. This case would'crue, cannot be enforced, not because it is usurious, but for the reason that such an agreement is re- | cited in some cases as sustaining the position that it garded in this State as against public policy -- as can be recovered, but that case was expressly deone that may be made oppressive to the debtor - cided upon the ground of a mistake of fact. but a prospective agreement after the interest has The present law of the State upon the subject of accrued, to pay interest thereon, is valid. So, too, a compound interest, then seems to be: security for interest upon interest, given after it has . As a general rule interest is not allowed upon accumulated, and in the absence of any prior under interest. taking to pay it, is valid, and supported by a good II. That a provision in a contract for interest consideration.” The learned judge does not say upon future installments of interest which remain what this good consideration is, but it is undoubt- unpaid, will not be enforced, but it will not contamedly the moral duty to recompense the creditor for inate the rest of the contract so as to render it usurithe delay. For in equity a moral obligation is con- ous or void. sidered to be a sufficient consideration to uphold an III. That a contract to pay interest upon interest express agreement to fulfill it.
due at the time is upon a sufficient consideration And in the case of Morory v. Bishop, 5 Paige, 103, | and valid, and may be retrospective in its action, we find this moral obligation is the consideration and provide for the payment of interest from a time assigned to support the agreement. In the course of then past. the same opinion, the learned judge refers to the case IV. That from the time payment of it is deof Van Benschoten v. Lawson, 6 Johns. Ch. 313, wherein manded, interest bears interest. Chancellor Kent said that such an agreement must V. That if interest is paid upon interest, it cannot only refer to interest then due, but must be not be recovered back, although the law would not prospective, and that if the contract be that inter- have compelled the debtor to pay it. est shall be paid upon interest from some previous
R. R. H. time when it became due, it will not be enforced. He does not examine the foundation for this opin- THE RELATIONS OF THE UNITED STATES TO hion, but simply states that the doctrine that such EACH OTHER, AS MODIFIED BY THE WAR Finntracts will be enforced. whether retrospective or
AND THE CONSTITUTIONAL AMENDMENTS. spective, is now too well settled by authority in
(Continued.) State to be questioned.
III. CONFEDERATION ERA. in the case of Thornhill v. Evans, supra, Lord THE articles of confederation were the first step to a int irdwicke directed the master to inquire what ar- | 1 Constitutional Union of the free and independent dej ars of interest were agreed, from time to time in
States of America. They passed in Congress Novem
ber 15, 1777. 3 Jour. Cong. 396. writing, to be turned into principal.
Our analysis of this political association will be easy ." In Van Benschoten v. Lawson, Chancellor Kent
because it was constituted by the written articles of adopted this rule, and said that the agreement to confederation. pay interest upon interest must be in writing. Later During the discussion of them in Congress, it was the rule requiring a writing was approved by Justice
again and again proposed to change the rule, under Balcom in the case of Forman v. Forman, 17 How.
the proposed articles, by which in Congress each State
had one vote, but the proposition was uniformly de257.
feated; and for cases, which by the articles could However, many cases take the view that a demand
only be passed by nine States, an amendment was prois all that is necessary to turn interest into principal, posed in these words: “Provided, that the nine States and make it bear interest from the date of that de so assenting shall comprehend a majority of the people mand. Connecticut v. Jackson, 1 Johns. Ch. 16.
of the United States, excluding negroes and Indians." In the case of Howard v. Farley, 19 Abb. Pr. 129,
It was rejected - ayes, one State; nays, nine States.
3 Jour. Cong. 366. Now when (taking the census of 1790 Judge Monell says: “If the interest is demanded
as an index) nine States, with a population of only when due, it becomes principal from that time, and
1,600,000, could thus control four States with 2,100,000; interest upon it should be recoverable.”
when in other cases, where a majority of States could These and the later cases, generally, are evidently pass a measure, States with a population of 1.000,000 inconsistent with the rule requiring a writing, which
could thus out vote a majority of States with 2,800,
000; when the power of a majority of the people of may probably be regarded as abandoned at least as
the United States was denied by a vote of nine to one to prospective contracts.
in Congress; it would seem that the idea of a paraFrom the foregoing cases, and the principles that mount and sovereign body politic, called the United are a necessary deduction from them, it is evident | States, was derisively ignored and repudiated even in that where interest is paid upon interest, the trans Congress itself. Nor let it be forgotten, that in the action is not usurious. It must be equally clear,
Congress before the articles were adopted, a majority and it is certainly quite as well settled, that money
of States always decided action; and thus if 1,000,000
voted for a measure (seven States), and 2,800,000 against paid for compound interest cannot be recovered
| it (six States), it passed; or if 2,800,000 (six States) back. Stewart v. Petrie, 55 N. Y. 621. The case voted for, and the 1.000.000 (reven S
voted for, and the 1,000,000 (seven States) voted against of Boyer v. Pack, 2 Denio, 107, seems to have been a measure, it failed.
Does not this fact show that States, not men, were 7. Mutual limitations are agreed to, upon the powers represented in the Congress prior to 1781, and after- of the States as to foreign intercourse, or between ward in that under the confederation ?
themselves, or as to war, or forces — military or naval. The anxious desire of Congress, as well as of all pa 8. The powers vested in Congress were important, triots, was to increase the power of Congress by adopt but were very restricted. Congress could lay no tax, ing the articles. But what was the obstruction to and raise no money but by loans and bills of credit, their adoption from November, 1777, to March, 1781 ? except by requisitions on the States, but with no power Congress, knowing the source of its authority, and to enforce its requisition. It could call on the States that no increase could come but by the united voice of for soldiers, and of those so raised, all of and under all the separate States; that none could come from the rank of colonel were appointed by the States. a majority vote in Congress, or from a majority of the The regulation of commerce was left to the States. people of the United States, aggregated as one body Congress could build and equip a navy. The treaty politic, passed this order: “ These articles shall be | making power was in Congress, and the power of war. proposed to the legislatures of all the United States, 1 9. The articles could be amended by Congress, to be to be considered, and if approved by them, they are | confirmed by the legislature of every State. The artiadvised to authorize their delegates to ratify the cles were to be inviolably observed by every State, and same in the Congress of the Uuited States, which be the Union to be perpetual. ing done, the same shall become conclusive." 3 Jour. Such is a compendium of these celebrated articles. 401. Twelve States had adopted them for some years, In a letter sent by Congress with them to the sevbut Maryland declining, they had no effect; and thus eral States, a few things may be noticed. The diffione-thirteenth of the whole population of the United culty of a general sytem between “so many sovereign States, obstructed action deemed almost essential to and independent communities" into which the contithe safety of the whole.
nent is divided, is dwelt upon, and it is recommended I shall note the contents of these articles succinctly. | to each respective legislature to invest its delegates 3 Jour. 396.
with competent powers ultimately in the name and be1. They are called : “Articles of confederation and half of the State to subscribe articles, etc. 3 Jour. 404. perpetual Union between the States of New Hamp This was done finally by the signature of the deleshire," etc. (all named).
gates, “On the part and behalf of the State of - " The parties between whom it is made are not men, but | 7 Jour. 43. States. It is a confederation and perpetual Union be- | As already noticed, after this date Congress passed tween States.
ordinances, “Be it ordained," eto. 2. Its first article declares: “The style of this con Let me call attention now to the influence of these federacy shall be the United States of America." facts connected with these articles upon the question
That was the name of this coufederacy between States of the relations of the States prior to their adopbaptized in revolutionary blood.
tion. 3. The second article declares: “Each State re In the letter of Congress just referred to, the ratitains its sovereignty, freedom and independence, and fication is urged upon the States, “ As essential to our every power, jurisdiction and right which is not by | very existence as a free people, and without it we may this confederation expressly delegated to the United soon be constrained to bid adieu to independence, to States in Congress assembled.
liberty and safety.” Is this the language of a paraObserve, each State retains — holds back - that is, | mount sovereign to his dependent vassals? of a Conit had previously possessed, what by these articles it gress exercising (as Judge Story asserts) de facto and retains. It retains its sovereignty, freedom and inde de jure a sovereigu authority? If it was sovereign, pendence. Then it had these previously. But how is how was its demand of more power so eager, and yet this, if the paramount sovereignty was in the good | so long disregarded? And if these articles are the people of the United States represented as one people greater powers, so much prayed for, what becomes of in Congress ?
its previous sovereignty so confidently asserted? If, Again, note the distinction between the totality of as Judge Story assumes, this central sovereignty, repsovereignty, freedom and independence retained, and resented by Congress, gave being to the States, by its the division between the powers, jurisdiction and inherent power, how does this creator of commonrights delegated or retained. The former, which in wealths come on bended knee to beg of these, its here in the civil body politic, are not impaired by a creatures, only enough power to save itself from exleague or confederation to which a part of the sover tinction? These questions, so pertinent to these facts, eign powers, etc., may be delegated, while another must be resolved in one answer: that Congress was, part is reserved.
and had ever been, the delegated agent of all the Aud further, note the guard against implication of States, each of which had always, since the moment powers in the word “expressly."
of its self-assumed independence, been possessed of 4. In the third article it is declared: “The said | that, which, under these articles, they still retained, States hereby severally enter into a firm league of its sovereignty, freedom and independence, and of friendship,'' etc.
every power, jurisdiction and right, it had not by its 5. By the fourth article to secure intercourse among own will delegated to the Congress or abridged by the people of the different States, an inter-communi treaty or compact with some other civil body politic. cation of the rights of citizenship, mutual extradition Congress made the treaty of peace with Great of criminals, and reciprocal faith to public acts of each | Britain, at the close of the war, in which His BritanState, are stipulated.
| nic Majesty acknowledges the said United States, 6. Delegates to Congress are provided for. Each | viz. : New Hampshire (naming all), to be free, soverState to elect, and re-call at pleasure, her own dele eign and independent States; that he treats with gates, to support them, and each State to have but one them as such; and for himself, his heirs and successors vote.
relinquishes all claims to the government, proprietory and territorial rights of the same and every part | Second. What the relations of the States to the thereof. 9 Jour. 20.
Government thereby established, and inter se? Is the One other act during the confederation era remains Union organic or functional? Is it Staaten-bund or to be noted.
bundes-Staat? Is a new civil body politic created ? If Virginia, by deed dated March, 1784, executed by so, are its units, States or men ? her delegates in Congress under her authority, con 1 1. In auswer to the first question, I aver that the veyed her domain in the northwest (now five States, States, as free, sovereign and independent civil bodies containing nearly ten millions of people) to the United politic, ordained the Constitution; and that it is a States in Congress assembled, as well of soil as juris Federal compact between the States, by which a govdiction, for the benefit of said States, upon condition ernment has been established, which is a Democraticthat the territory be laid out into States; “ that the Republican and a Federal government; supreme States so formed shall be distinct Republican States, within the limits of the delegated powers, over the and admitted members of the Federal Union, having constitutions and laws of the several States, and bindthe same rights of sovereignty,freedom and independ ing and operating upon the citizens of all the States; ence as the other States;” that the lands so ceded and by the terms of which, certain rights and privishall be considered “as a common fund for the use leges of the citizens of each are inter-communicated and benefit of such of the United States as have be to those of every other. come and shall become members of the Confederation The confederation had two leading vices, in the or Federal alliance of the said States, Virginia inclu | opinion of those who advocated its substitution by sive," etc. 9 Jour. 47. Congress unanimously ac the present Constitution. cepted this deed of cession.
First. “In the principle of LEGISLATION for STATES This deed, and Congress is estopped to deny it, or GOVERNMENTS, in their corporate or collective proves
capacities, and as contradistinguished from the INDI1. That Virginia, and not Congress, bad exclusive VIDUALS of whom they consist” (Hamilton, No. 15, of right of soil and jurisdiction to the territory thus Federalist). ceded.
Second. “It has not a little contributed to the in2. It was to be laid out into distinct States.
firmities of the existing federal system, that it never 3. They were to be admitted into a Federal Union. had a ratification by the PEOPLE. Resting on no bet
4. They were to have, as the others had, freedom, ter foundation than the consent of the several legislasovereignty and independence.
tures, it has been exposed to frequent and intricate 5. The tie between the States was a confederation questions concerning the validity of its powers; and or federal alliance.
has, in some instances, given birth to the enormous 6. Each State, as such, had a separate claim on the doctrine of a right of legislative repeal. Owing its fund.
ratification to the law of a State, it has been contended 7. Congress, under the present Constitution, has that the same authority might repeal the law by which recognized this by the bill for the distribution of the it was ratified. However gross a heresy it may be to proceeds of the sale of these public lands among the maintain that a party to a compact has a right to reseveral States.
voke that compact, the doctrine itself has had respectIn Gibbons v. Ogden, 9 Wheat. 187, Marshall, C. J., able advocates. The possibility of a question of this in speaking of the argument at the bar, as to the re nature proves the necessity of laying the foundation lations of the States prior to the present Constitution, of our National Government deeper than the mere by one comprehensive statement may conclude all sanction of delegated authority. The fabric of the comment on the foregoing facts:
American Empire ought to rest on the solid basis of “It has been said that they (the States) were sover THE CONSENT OF THE PEOPLE." (Hamilton, No. 22, eign, were completely independent, and were con- | Federalist). nected with each other by a league. This is true.” In This latter vice is that with which we have now to this language he spoke the opinion of the whole court. | deal. The confederation was ratified by the delegated And if this was true under the articles of confedera- | authority, the legislature of each State. The Constition, a fortiori it was true before their adoption in tution of each State rests upon the will of the people 1781.
of the State, as the sovereign civil body politic. This In Wheeler v. Smith, 9 How. 578, Mr. Justice McLean, defect in the confederation would be cured by making speaking for the whole court, said:
the new Constitution rest on the same basis as the “When this country achieved its independence, the State Constitution, viz. : the consent of the people of prerogatives of the crown devolved upon the people each State. Tbat this is the meaning of Mr. Hamilton of the States, and this power still remains with them, | in the passage just quoted, will be obvious from the except so far as they have delegated a portion of it to language of the other authors of the Federalist. the Federal government. The State as a sovereign is Mr. Madison, in the 39th number of that great series the parens patriæ."
of papers (written to induce New York to ratify the Thus, at the close of the Confederation, we find the Constitution, and therefore a co-temporaneous expoStates related to each other, as free, sovereign and in sition, which, leading to the adoption of the Constitudependent States, united for common benefit by a tion, has always had great weight in its construction), league, confederation and federal alliance; whose says: “ This assent and ratification is to be given by name and style was "The United States of America;" the people, not as individuals composing one entire naa confederacy, whose units were States; and not one | tion, but as composing the distinct and independent civil body politic, whose units were men.
States to which they " (the people) “respectively be
long" * * * “That it will be a federal and not a IV. CONSTITUTIONAL ERA FROM 1789 TO 1861.
national act, the act of the people, as forming so many I propound the following problems for solution: independent States, not as forming one aggregate nation, First. Who urdained the Constitution, and what is it? 1 is obvious from the single consideration, that it is to
result neither from the decision of a majority of the to revise the existing system, but all required report people of the Union, nor from that of a majority of the to the State for confirmation. States. It must result from the unanimous assent of The rules adopted gave each State one vote onlythe several States that are parties to it, differing no constituted seven States a quorum, etc. (Jour. 62, etc.; otherwise from their ordinary assent, than its being 2 Mad. Pap. 724, etc.) expressed, not by the legislative authority, but by that On the vote upon the Constitution, the Journal of the people themselves. Were the people regarded in states : (p. 388), “ It passed in the affirmative, all the this transaction as forming one nation, the will of the States concurring." majority of the whole people of the United States would Upon the attestation of the act (p. 389) which was bind the minority; in the same manner as the majority in this form: “Done in convention, by the unanimous in each State must bind the minority. * * * Each consent of the States present,” eto.; "all the States anState in ratifying the Constitution is considered as a swered aye." sorereign body, independent of all others, and only to Governor Morris moved to refer "the plan to one be bound by its own voluntary act.”
general convention chosen and authorized by the peoIn the Virginia Convention, called to consider the ple, to consider, amend and establish the same.” This Federal Constitution in June, 1788, when confronted looked more to the action of the people in the aggreby the question of Patrick Henry, why the preamble | gate, as one people, than any other proposition ever said, “we, the people,” and not “we, the States," offered. It was not even seconded. (Mad. Pap. p. 1184.) (Mr. Henry was not a member of the Federal Conven- | Mr. Hamilton proposed to submit the plan to Contion), Mr. Madison replied, “Who are parties to it? gress, and if “ agreed to by them, it may be communiThe people, but not the people as composing one great cated to the legislatures of the several States," to be body, but the people as composing thirteen sovereignties. finally ratified by “a convention of delegates in each Were it, as the gentleman asserts, a consolidated gov State, to be chosen by the people thereof." Because it ernment, the assent of a majority of the people would conditioned the plan on the will of Congress at all, it be sufficient for its establishment, and as a majority was rejected. Ayes, 1 State; noes, 10 States. A rehave adopted it already, the remaining States would newal of the proposition to require the approval of be bound by the act of the majority.” * * * “It Congress was rejected-nem. con. (3 Mad. Pap. 1539– would be now binding on the people of this State with 1540–1541; Jour. 349–50.) out having had the privilege of debating upon it; but, The resolution finally adopted was, that the Constisir, no State is bound by it, as it is, without its own tution be laid before Congress, and be “submitted to a consent." (Virginia Debates in Convention of 1788, p. convention of delegates chosen in each State by the peo76.) He then proceeds to show that as the confedera ple thereof, under the recommendation of its legislation rested on the consent of the State Legislatures, ture, for their assent and ratification ;” and that each the Constitution was to rest on the authority of the convention notify its action to Congress. (3 Mad. people of each State.
Pap. 1570–71.) After this reply, this objection of Mr. Henry was Pursuant to this resolution, Congress, on the 28th not again advanced.
September, 1787, sent a copy of the Constitution “to But we are not left to rely upon authority. The | the several legislatures, in order to be submitted to a facts are conclusive.
convention of delegates chosen in each State by the Mr. Hamilton had very early suggested a change in people thereof,” etc. (Jour. Cong. 160.) the system of the confederation, and others united in The ratifications by the several States may be found his views; and in 1786, a convention of five States at in the Journal of Fed. Conv. 392 et seq. I give speciAnnapolis proposed another convention to meet at mens: Philadelphia in May, 1787.
“We, the deputies of the people of Delaware State, Congress passed a resolution, that it was expedient * * * do assent to, ratify and confirm the said Conto hold “a convention of delegates who shall have stitution,” (called a Federal Constitution in a previous been appointed by the several States" for purposes recital, p. 392.) named therein; and hereafter to be referred to (12 | Pennsylvania—“ In the name of the people of PennJour. 13, 14). The action of said convention was to be sylvania.” “We, the delegates of the people of the reported to Congress and the several legislatures," commonwealth of Penusylvania,” “in the name and and to be “ agreed to in Congress and coufirmed by the by the authority of the same people," do ratify, etc. States."
New Jersey-"We, the delegates of the State of New It met May 14, 1787. I refer to its official journal, Jersey, chosen by the people thereof,” do “for, and in called the Journal of the Federal Convention. (Jour. behalf of the people of the State of New Jersey," 59.)
ratify, etc. It states that "in virtue of appointments from Connecticut-"In the name of the people of the their respective States, sundry deputies to the Federal State of Connecticut;" "we, the delegates of the peoConvention appeared: but a majority of the States not ple of said State," do ratify, eto. being represented,” there was an adjournment until | Massachusetts — “In convention of the delegates of 25th of September, “when, in virtue of said appoint the people of the Commonwealth of Massachusetts," ments, appeared from the States of Massachusetts, we "do in the name and in behalf of the people of the Rufus King; New York, Robert Yates and Alexander | Commonwealth of Massachusetts," ratify, etc. Hamilton, etc., eto.
Georgia, Maryland, New Hampshire, Virginia, New The election of General Washington as its president York and South Carolina, ratified in substantially was made by States.
similar form, viz. : “do in the name and on behalf of The credentials were read. (Jour. 17 to 58.)
the people of each State, ratify, eto." Virginia added, The credentials were from the State legislatures of "hereby announcing that the said Constitution is every State but Rhode Island, which was never present binding upon the said people" (of Virginia) “ according in the convention. They all authorized a conference to an authentic copy hereto annexed, eto."