OBLIGATION OF CONTRACTS, the legal bond which demands that the contract ing parties shall carry out their agreement, and including the right to enforce the contract by legal procedure. This extension of the word obligation to include the legal effect and remedy is important, and upon the subject the United States supreme court has said that " the laws which exist at the time cud place of making the contract and where it is to be performed enter into and form a part of it. This embraces alike those which affect its validity, construction, discharge, and enforcement." In the United States constitu tion, art. I. sec. 10, is found this provision: "No state shall pass . . . any bill of attainder, ex post facto law, or any law impairing the obligation of contracts." The ques tions at once arise: What are the obligations of a contract; to what contracts does the prohibition apply, and what laws are of such a nature as to violate that prohibition? The first question is answered in time definition given above, and it should be added that the legal bond is derived from those laws only which were in existence at the time of the contract and thus supposed to be in the contemplation of the wiles. As to the second, all contracts are embraced within the meaning of the law, if they respect rights or claims which could be brought. before a court of law or equity, whether they are expressed or implied, executed or executory. Conveyances, statutory grants, and private charters issued by a state undoubtedly come within the prohibition. Against this the states have protested, but in the great Dartmouth college case the supreme court decided that a private charter is a contract between the state and the corporation, and cannot be repealed or impaired by subsequent legislation, and that such collateral stipulations as exemption from taxation are of the essence of the contract. This decision has been many times reaffirmed but is still doubted by many eminent lawyers on the ground that a state cannot sell.by contract its sovereign functions. Municipal corporations have no such immunity as to their charters, as they are political in their nature. The contract of marriage has been held not to be of such a nature as to create obligations in the sense used in the constitution, but on the other hand it has been said that a law creating new grounds for the divorce of parties married before its passage would impair the obligation of the marriage contract and would therefore be unconstitutional. As to remedies for
violation of contract obligations, it is not considered that the state impairs the obliga tion by changing the nature and extent of the relief offered, or by varying the time and mode in which these remedies may be purgued, or by barring all relief after a prescribed time. The case would be different were all remedies to be abolished. The right of the state to pass regulations for preserving public order, health, and morality is not to be restrained by a forced interpretation of the clause of the constitution under discussion. The right of a state legislature to forever exempt from taxation any property, and thus to bind its successors and, as it were, compromise the sovereignty of the state, is not yet fully settled; but the prevailing doctrine seems to be that such exemption may be made for good or valuable consideration, as all property rights are subject to the state powers of taxation and eminent domain. Congress has been given the power of passing general bankrupt laws, but this power is not exclusive; such laws, however, passed in aid of debtors, as stay laws, exemption laws, or statutes of limitation, conflict with the pro hibition of impairment of obligations when they are so framed as to act retrospectively. Licenses, public offices, and permission by statute to do certain acts, as to sue the state, are not in their nature contracts; no consideration exists, and the grant may be repealed without impairing any contract obligation. Thus it has repeatedly been held that license to establish a lottery or to carry on a dangerous manufacture may at any time be revoked. It will be noticed that the constitution does not extend the prohibition of Impairment to congress as well as to the states. and however opposed to common honesty and public policy such an act would be, there is little doubt that congress has the legal power to pass such laws.