Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Remedies review in order to detect fraudulent grants or reverse fraudulent judgments without impairing contract obligations. Stephens v. Cherokee Nation, 174 U. S. 478. League v. De Young, 11 How. 202. An act compelling the acceptance of anything but the stipulated payment impairs the obligation of a contract, and where a creditor is entitled to payment in lawful money the legislature can not deprive him of that right. Where existing law permits the recovery of interest on overdue coupons, a subsequent law declaring interest not recoverable upon interest is inapplicable to such existing contracts; but the discretion exercised by the legislature in prescribing what damages, by way of interest, for delay must be allowed in the payment of judgments is based upon reasons of public policy, and is outside the sphere of private contracts. Blount v. Windley, 95 U. S. 179. Koshkonong v. Burton, 104 U. S. 679. Morley v. Lake Shore, etc., R. Co., 146 U. S. 171. See also Wilson v. Standefer, 184 U. S. 409. Bank of Columbia v. Okely, 4 Wheat. 243. Crawford v. Bank of Mobile, 7 How. 282. Ochiltree v. Railroad, 21 Wall. 249. Fourth Nat. Bank v. Francklyn, 120 U. S. 755. Relation of obligation and remedy.-Remedies for the enforcement of a contract existing at the time of its execution enter into, and form a material part of, the obligation of a contract, which the State may not so change as to impair a substantial right. A statute can no more impair the efficacy of a contract by changing the remedy given for its enforcement than by attacking its validity in any other way. Von Hoffman v. Quincy, 4 Wall. 535. See also Gunn v. Barry, 15 Wall. 610. McCracken v. Hayward, 2 How. 612. Kring v. Missouri, 107 U. S. 233. Bronson v. Kinzie, 1 How. 311. Memphis v. U. S., 97 U. S. 295. Woodruff v. Trapnall, 10 How. 190. State statute giving to parishes and municipal corporations an additional and more summary remedy for enforcing against private corporations contract obligations in relation to the paving, repairing, etc., of any street, bridge, etc., does not affect any substantial right of the other party and is not unconstitutional. Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Remedies New Orleans, etc., R. Co. v. Louisiana, 157 U. S. 219. Bradley v. Lightcap, 195 U. S. 1. See also Livingston v. Moore, 7 Pet. 469, and Red River Valley Bank v. Craig, 181 U. S. 548, as to foreclosure of State insolvency laws-In general.-The power of the States to enact insolvency laws is subject to the prohibition against laws impairing the obligation of contracts; such a law purporting to discharge liability on contracts entered into before its passage impairs the obligation of those contracts and is void. In their operation upon residents of the State this is the only restriction upon the power to enact them, and while they can not retroact upon previously contracted debts, such laws providing for discharge from subsequently contracted debts are valid. Sturges v. Crowninshied, 4 Wheat. 196. Ogden v. Saunders, 12 Wheat. 264. Suydam v. Broadnax, 14 Pet. 75. See also Farmers', etc., Bank v. Smith, 6 Wheat. 134. Boyle v. Zacharie, 6 Pet. 635. Cook v. Moffatt, 5 How. 295. Gilman v. Lockwood, 4 Wall. 411. A State bankrupt or insolvency law which discharges a debtor from all liability for any debt contracted before such law was passed on his surrendering his property in the manner it prescribes, is void, as it impairs the contract. Sturges v. Crowninshield, 4 Wheat. 122. Farmers' & Mechanics' Bank v. Smith, 6 Wheat. 131. McMillan v. McNeill, 4 Wheat. 212. Bank of Tennessee v. Horn, 17 How. 157. Insolvent laws are not invalid so far as they discharge the person and after-acquired property of the debtor from liability for any contract made subsequently to their enactment with citizens of the State. Shaw v. Robbins, 12 Wheat. 369, note. Boyle v. Zacharie, 6 Pet. 643. Suydam v. Broadnax, 14 Pet. 74. Cook v. Moffatt. 5 How. 316. Denny v. Bennett, 128 U. S. 489. As to existing debts.-A statute for the relief of insolvent debtors, which discharges a debtor from all liability for debts contracted previous to his discharge on his surrendering his property for the benefit of his creditors, is a law impairing the obligation of contracts, in so far as it attempts to discharge the contract. Farmers', etc., Bank v. Smith, 6 Wheat. 131. Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Remedies As to subsequent debts.-A State bankrupt or insolvency law which discharges the person and the future acquisitions of the debtor from his liability under a contract entered into in that State after the passage of the act does not impair the obligation of such contract. Ogden v. Saunders, 12 Wheat. 254. Baldwin v. Hale, 1 Wall. 228. Administration of estates.-A private State statute which authorizes a court to decree, on the petition of an administrator, a private sale of the real estate of a decedent to pay debts, while the general subject is regulated by a general statute, does not infringe any contract. Florentine v. Barton, 2 Wall. 217. Acts of limitation.-Statutes of limitation affect only the remedy given for the enforcement of contracts and not the merits; they rather establish that certain circumstances shall amount to evidence that a contract has been performed than dispense with its performance. Being part of the remedy, statutes of limitation may be modified by shortening the time prescribed at the will of the legislature, provided a reasonable time is left for the commencement of an action before the bar takes effect. The reasonableness of the time allowed for bringing actions on existing contracts is the true test of the validity of such statutes, and this reasonableness is to be determined in the first instance by the legislature, subject to final determination by the courts whether the legislature has committed palpable error. Brent v. Bank of Washington, 10 Pet. 617. Sturges v. Crowninshield, 4 Wheat. 207. Jackson v. Lamphire, 3 Pet. 290. Terry v. Anderson, 95 U. S. 633. Parmenter v. State, 31 N. E. 1035. See also Townsend v. Jemison, 9 How. 413. Campbell v. Holt, 115 U. S. 626. Hawkins v. Barney, 5 Pet. 468. McCracken v. Hayward, 2 How. 613. Phalen v. Virginia, 8 How. 168. Koshkonong v. Burton, 104 U. S. 675. To give a statute of limitation, declaring generally that no action, or no action of a certain class, shall be brought except within a certain limited time after it shall have accrued, a literal interpretation and a retrospective operation, so that if an action Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Remedies accrued more than the limited time before the statute was passed it would have the effect of absolutely barring such action at once, would render it unconstitutional. Sohn v. Waterson, 17 Wall. 599. See also Mills v. Scott, 99 U. S. 27; Vance v. Vance, 108 U. S. 514; Wheeler v. Jackson, 137 U. S. 245; and . Gilfillan v. Union Canal Co., 109 U. S. 404, as to particular periods of time held reasonable. Exemption laws-In general.-It may be stated as a general rule that laws creating or extending exemptions from attachment or execution impair the obligation of contracts, so far as they relate to debts previously contracted, in that they operate to destroy the remedy. In any case where the exemption is palpably too large and materially affects remedies, it will be declared void. Gunn v. Barry, 15 Wall. 624. Edwards v. Kearzey, 96 U. S. 604. Kener v. La Grange Mills, 231 U. S. 215. A distinction has been drawn between exemptions of real property and exemptions of personal property, and while the original expressions of this distinction were but dicta, it seems now to be established that reasonable exemptions of personal property are valid as to prior debts, the reasonableness of the exemption to be determined by the court in each case. Bronson v. Kinzie, 1 How. 315. In re Owens, 6 Biss. (U. S.) 432. Such laws are parts of contracts.-The established construction of this clause requires that statutes exempting property of the debtor from attachment or execution "shall be construed to be parts of all contracts made when they are in existence, and therefore can not be held to impair their obligation." Denny v. Bennett, 128 U. S. 495. Bronson v. Kinzie, 1 How. 321. Farm implements, mechanics' tools, and furniture.—A statute may "exempt from sale under execution the necessary implements of agriculture, the tools of a mechanic, and articles of necessity in household furniture. *** Regulations of this description have always been considered in every civilized community as properly belonging to the remedy, to be exercised by every sovereignty according to its own views of policy and humanity." Von Hoffman v. Quincy, 4 Wall. 553. An act exempting real property from taxation is not, when a mere gratuity, a contract. West Wisconsin R. Co. v. Trempealeau County, 93 U. S. 595. Welch v. Cook, 97 U. S. 541. Wells v. Savannah, 181 U. S. 531. Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Remedies Stay laws. Stay laws are void, as they change a term of the contract by postponing the time of payment. Edwards v. Kearzey, 96 U. S. 601. Howard v. Bugbee, 24 How. 461. Mortgage and redemption laws.-The right to redeem according to the laws existing at the time a mortgage is executed constitutes part of the mortgage contract and not part of the remedy merely, and it is a right which inheres in the contract as to both mortgagor and mortgagee. Accordingly, a law giving a right of redemption where none previously existed, or extending the period allowed, so alters the remedy of the creditor as to impair the obligation of an existing mortgage. On the other hand, laws abolishing the right to redeem or shortening the period previously allowed can not operate to impair the rights of a mortgagor under an existing mortgage. Brine v. Insurance Co.. 96 U. S. 637. Howard v. Bugbee, 24 How. 464. Barnitz v. Beverly, 163 U. S. 129. Conley v. Barton, 260 U. S. 677. An independent purchaser, having no connection whatever with the mortgage excepting as he becomes such purchaser at the foreclosure sale, can not raise the question in his own behalf in relation to the validity of the legislation as to redemption and rate of interest which existed at the time he made his purchase. Hooker v. Burr, 194 U. S. 426. Essex v. Skinkle, 140 U. S. 334. East Tennessee, etc., R. Co. v. Frazier, 139 U. S. 288. See also Red River Valley Bank v. Craig, 181 U. S. 548, as to legislation affecting remedy merely. Bradley v. Lightcap, 195 U. S. 1, as to mortgagee's right to deed. Where the judgment of a State court that a mortgage foreclosure is valid without reference to a law regulating foreclosure passed after the execution of the mortgage, such law does not impair the obligation of the contract if the decision of the State court is not erroneous. Kennebec Railroad v. Portland Railroad, 14 Wall. 23. The obligations of a contract of the State of California with a purchaser of public land, which gave to the State the right to foreclose for default in payment of the purchase price and to the purchaser the privilege of redemption within 20 days from the entry of the foreclosure decree upon payment of the amount due the State and the costs of suit, were not impaired by the enactment of subsequent legislation under which, in case 12703°-S. Doc. 157, 68-1—23 |