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Devereaux v. Marr. 12 W.

which this evidence conduced to prove, the court had no jurisdiction over the cause. This was certainly irregular and improper. The jury were sworn to try the general issue, and the facts involved in it, not to try facts involved in a question of jurisdiction.

The instructions of the court were calculated to lead and divert the attention of the jury from the subjects of inquiry properly before them, to others in no way connected with the issue. For this error, the judgment of the circuit court must be reversed, the cause remanded to the circuit court, with directions to set aside the verdict, and for new proceedings to be had therein, not inconsistent with the judgment of this court.

DEVEREAUX v. MARR.

12 W. 212.

This court cannot take jurisdiction upon a certificate of a question on which the opinions of the judges of the circuit court are opposed, upon some proceeding subsequent to the decis ion of the cause in that court.

In this case, the judges of the circuit court of West Ten

nessee, after a judgment had been rendered in that *court, [* 213 ] divided in opinion upon the question as to the amount of

the security bond, to be given by the party applying for a writ of error, whether the amount of the bond, ought to be sufficient to cover the whole debt, or only for the costs and increased damages on the party failing to prosecute his writ of error with effect. Whereupon the division of opinions was certified to this court, under the 6th section of the act of the 29th April, 1802, (2 Stats. at Large, 159.)

Eaton, for the plaintiff.

White, for the defendant.

THIS COURT was of opinion, that it had no jurisdiction of the question on which the opinions of the judges of the circuit court were opposed, the division of opinions having arisen after the decision of the cause in that court. Certificate, accordingly.

7 H. 185.

Ogden v. Saunders. 12 W.

OGDEN, Plaintiff in Error, v: SAUNDERS, Defendant in Error.

12 W. 213.

An insolvent law of a State does not impair the obligation of future contracts between its citizens. But it cannot affect the rights of creditors who are citizens of other States.

ERROR to the district court of the United States for Louisiana.

This was an action of assumpsit, brought in the court [* 214 ] *below, by the defendant in error, Saunders, a citizen of Kentucky, against the plaintiff in error, Ogden, a citizen of Louisiana. The plaintiff below declared upon certain bills of exchange, drawn on the 30th of September, 1806, by one Jordan, at Lexington, in the State of Kentucky, upon the defendant below, Ogden, in the city of New York, (the defendant then being a citizen and resident of the State of New York,) accepted by him at the city of New York, and protested for non-payment.

The defendant below pleaded several pleas, among which was a certificate of discharge under the act of the legislature of the State of New York, of April 3, 1801, for the relief of insolvent debtors, commonly called the three fourths act.

The jury found the facts in the form of a special verdict, on which the court rendered a judgment for the plaintiff below, and the cause was brought by writ of error before this court. The question which arose under this plea as to the validity of the law of New York as being repugnant to the constitution of the United States, was argued at February term, 1824, by Clay, D. B. Ogden, and Haines, for the plaintiff in error, and by Webster and Wheaton, for the defendant in error, and the cause was continued for advisement until the present term. It was again argued at the present term, (in connection with several other causes standing on the calendar, and involving the general question of the validity of the state bankrupt, or insolvent laws,) by Webster and Wheaton, against the validity, and by the Attorney-General, E. Livingston, D. B. Ogden, Jones, and Sampson, for the validity.

[ * 254 ]

The learned judges delivered their opinions as follows:

WASHINGTON, J. The first and most important point to be decided in this cause, turns essentially upon the question, whether the obligation of a contract is impaired by a State bankrupt or insolvent 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.

Ogden v. Saunders. 12 W.

This question has never before been distinctly presented to the consideration of this court, and decided, although it has been supposed by the judges of a highly respectable state court, that it was decided in the case of M'Millan v. M'Neal, 4 W. 209. That was the case of a debt contracted by two citizens of South Carolina, in that State, the discharge of which had a view to no other State. The debtor afterwards removed to the territory of Louisiana, where he was regularly discharged, as an insolvent, from all his debts, under *an act of the legislature of that State passed prior to the time when the debt in question was contracted. To an action brought by the creditor in the district court of Louisiana, the defendant plead in bar his discharge, under the law of that territory, and it was contended by the counsel for the debtor in this court, that the law under which the debtor was discharged, having passed before the contract was made, it could not be said to impair its obligation. The cause was argued on one side only, and it would seem from the report of the case, that no written opinion was prepared by the court. The chief justice stated that the circumstance of the state law under which the debt was attempted to be discharged having been passed before the debt was contracted, made no difference in the application of the principle which had been asserted by the *court in [*255 ̊ ] the case of Sturges v. Crowninshield, 4 W. 122. The correctness of this position is believed to be incontrovertible. The principle alluded to was, that a state bankrupt law which impairs the obligation of a contract, is unconstitutional in its application to such contract. In that case, it is true, the contract preceded in order of time the act of assembly, under which the debtor was discharged, although it was not thought necessary to notice that circumstance in the opinion which was pronounced. The principle, however, remained, in the opinion of the court delivered in M'Millan v. M'Neal, unaffected by the circumstance that the law of Louisiana preceded a contract made in another State; since that law, having no extraterritorial force, never did at any time govern or affect the obligation of such contract. It could not, therefore, be correctly said to be prior to the contract, in reference to its obligation; since if, upon legal principles, it could affect the contract, that could not happen until the debtor became a citizen of Louisiana, and that was subsequent to the contract. But I hold the principle to be well established, that a discharge under the bankrupt laws of one government does not affect contracts made or to be executed under another, whether the law be prior or subsequent in the date to that of the contract; and this I take to be the only point really decided in the case alluded to. Whether the chief justice was correctly understood by the reporter,

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Ogden v. Saunders. 12 W.

when he is supposed to have said, "that this case was not distinguishable in principle from the preceding case of Sturges v. Crowninshield," it is not material at this time to inquire, because I understand the meaning of these expressions to go no further than to intimate, that there was no distinction between the cases as to the constitutional objection, since it professed to discharge a debt contracted in another State, which, at the time it was contracted, was not within its operation, nor subject to be discharged by it. The case now to be decided, is that of a debt contracted in the State of New York, by a citizen of that State, from which he was discharged, so far as he constitutionally could be, under a bankrupt law of that State, in force at the time when the debt was contracted. It is a case, there

fore, that bears no resemblance to the one just noticed. [* 256] * I come now to the consideration of the question, which, for the first time, has been directly brought before this court for judgment. I approach it with more than ordinary sensibility, not only on account of its importance, which must be acknowledged by all, but of its intrinsic difficulty, which every step I have taken in arriving at a conclusion with which my judgment could in any way be satisfied, has convinced me attends it. I have examined both sides of this great question with the most sedulous care, and the most anxious desire to discover which of them, when adopted, would be most likely to fulfil the intentions of those who framed the constitution of the United States. I am far from asserting that my labors have resulted in entire success. They have led me to the only conclusion by which I can stand with any degree of confidence; and yet, I should be disingenuous were I to declare, from this place, that I embrace it without hesitation, and without a doubt of its correctness. The most that candor will permit me to say upon the subject is, that I see, or think I see, my way more clear on the side which my judgment leads me to adopt, than on the other, and it must remain for others to decide whether the guide I have chosen has been a safe one or not.

It has constantly appeared to me, throughout the different investigations of this question to which it has been my duty to attend, that the error of those who controvert the constitutionality of the bankrupt law under consideration, in its application to this case, if they be in error at all, has arisen from not distinguishing accurately between a law which impairs a contract, and one which impairs its obligation. A contract is defined by all to be an agreement to do or not to do some particular act; and in the construction of this agreement, depending essentially upon the will of the parties between whom it is formed, we seek for their intention with a view to fulfil it. Any law,

Ogden v. Saunders. 12 W.

then, which enlarges, abridges, or in any manner changes this intention, when it is discovered, necessarily impairs the contract itself, which is but the evidence of that intention. The manner or the degree in which this change is effected, can in no respect influence this conclusion; for whether the law affect the validity, the construction, the duration, the mode of discharge, or the [257] evidence of the agreement, it impairs the contract, though

it may not do so to the same extent in all the supposed cases. Thus, a law which declares that no action shall be brought whereby to charge a person upon his agreement to pay the debt of another, or upon an agreement relating to lands, unless the same be reduced to writing, impairs a contract made by parol, whether the law precede or follow the making of such contract; and, if the argument that this law also impairs, in the former case, the obligation of the contract, be sound, it must follow that the statute of frauds, and all other statutes which in any manner meddle with contracts, impair their obligation, and are consequently within the operation of this section and article of the constitution. It will not do to answer that, in the particular case put, and in others of the same nature, there is no contract to impair, since the preëxisting law denies all remedy for its enforcement, or forbids the making of it, since it is impossible to deny that the parties have expressed their will in the form of a contract, notwithstanding the law denies to it any valid obligation.

This leads us to a critical examination of the particular phraseology of that part of the above section which relates to contracts. It is a law which impairs the obligation of contracts, and not the contracts themselves, which is interdicted. It is not to be doubted that this term obligation, when applied to contracts, was well considered and weighed by those who framed the constitution, and was intended to convey a different meaning from what the prohibition would have imported without it. It is this meaning of which we are all in search.

What is it, then, which constitutes the obligation of a contract? The answer is given by the chief justice, in the case of Sturges v. Crowninshield, to which I readily assent now, as I did then; it 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, whether it affect its validity, construction, or discharge.

But the question, which law is referred to in the above 'definition, still remains to be solved. It cannot, for a [* 258 ] moment, be conceded that the mere moral law is intended,

since the obligation which that imposes is altogether of the imperfect

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