This provision, then, of the constitution of the United States, not only implies that certain contracts have an obligation, but it also implies that the people have the right to enter into all such contracts, and have the benefit of them. And any State law, conflicting with either of these implications, is necessarily unconstitutional and void.
Furthermore, the language of this provision of the constitution, to wit: “the obligation [singular] of contracts” [plural], implies that there is one and the same “obligation” to all “contracts” whatsoever, that have any legal obligation at all. And there obviously must be some one principle, that gives validity to all contracts alike, that have any validity.
The law, then, of this whole country, as established by the constitution of the United States, is, that all contracts, in which this one principle of validity or “obligation” is found, shall be held valid; and that the States shall impose no restraints upon the people’s entering into all such contracts.
All, therefore, which courts have to do, in order to determine whether any particular contract, or class of contracts, are valid, and whether the people have a right to enter into them, is simply to determine whether the contracts themselves have, or have not, this one principle of validity, or obligation, which the constitution of the United States declares shall not be impaired.
State legislation can obviously have nothing whatever to do with the solution of this question. It can neither create, nor destroy, that “obligation of contracts,” which the constitution forbids it to impair. It can neither give, nor take away, the right to enter into any contract whatever, that has that “obligation.”
But here a formidable difficulty arises. It is no less a one than this, viz.: that neither legislatures, lawyers, nor courts, know, nor even pretend to know, what “the obligation of contracts” is. That is to say, there is no one principle, known or recognized among them, by reference to which the validity or invalidity of all contracts is determined. Consequently it is not known, in the case of any single contract whatever, that is either enforced or annulled, in a court of justice, whether the adjudication has really been in accordance with “the obligation” of the contract, or not. Startling, and almost terrifying, as this statement is, in view of the number and importance of the contracts, in which men’s rights are involved, and which courts are continually annulling or enforcing, the statement is nevertheless true.
The question—what is “the obligation of contracts?” has been several times before the Supreme Court of the United States; but has never received any satisfactory answer. The last time (so far as I know) that it was brought before that court, was in 1827, in the case of Ogden vs. Saunders (12 Wheaton, 213). Several among the most eminent lawyers in the country, to wit: Webster, Wirt, Wheaton, Livingston, Ogden, Jones, and Sampson, were engaged in the cause. But they all failed to enlighten the court.
The court consisted, at that time, of seven judges. Among these seven judges, four different opinions prevailed as to what “the obligation of contracts” was. Three of the judges said it was one thing; two of them said it was another; one said it was another; and one said it was another. No one opinion commanded the assent even of a majority of the court. And thus the court virtually confessed that, as a court, they did not know what “the obligation of contracts” was.
The reasonable presumption is, that no one of these opinions was correct; for if either had been correct, it would have been likely to secure the assent of the whole court, or at least of a majority.
But, although the court could not agree as to what the obligation of contracts was, four of the justices did agree in declaring that the insolvent law of New York did not impair the obligation of any contracts, that were made, in New York, subsequently to the passage of the law. To appreciate the farcical character of this conclusion, we have only to consider that, among these four justices, three different opinions prevailed as to what “the obligation” was, which they said the law did not impair. And from that time until now, this ridiculous opinion of these four justices, who virtually confessed that they knew nothing of the question they assumed to decide, has stood as law throughout the country, and been received, by legislatures and courts, as sufficient authority for the State legislatures to fix, prescribe, alter, nullify, or impair, at their discretion, the obligation of any and all contracts entered into subsequently to the passage of their laws. This fact is sufficient to show that the ignorance of the Supreme Court of the United States, as to the obligation of contracts, is abundantly participated in by the legislatures and courts of the States.
The writer of this will not attempt, at this time—although he may, perhaps, at some future time—to define this constitutional “obligation of contracts,” any further than to say that it must necessarily be the natural obligation. That is, it must be the obligation, which contracts have, on principles of natural law, and natural right, as distinguished from any arbitrary, partial, or conditional obligation, which legislatures may assume to create, and attach to contracts.
This constitutional prohibition upon any law impairing the obligation of contracts, is analogous to those provisions, in both the State and National constitutions, which forbid any laws infringing “the freedom of speech or the press,” “the free exercise of religion,” and “the right to keep and bear arms.”
“The freedom of speech and the press,” which is here forbidden to be infringed, is not any merely arbitrary freedom, which legislatures may assume to create and define by statute. But it is the natural freedom; or that freedom, to which all mankind are entitled of natural right. In other words, it is such as each and every man can exercise, without invading the rights of others, and consistently with an equal freedom on the part of others.
If “the freedom,” here forbidden to be infringed, were only such freedom as legislatures might, in their pleasure or discretion, see fit to institute, the prohibition, instead of protecting any “freedom of speech or the press,” would of itself imply an authority for the entire destruction of all such “freedom.”
The same is true of “the free exercise of religion,” and “the right to keep and bear arms.” If the rights, which, under these names, are constitutionally protected, instead of being the natural rights, which belong to all mankind, were only such rights as legislatures, in their pleasure or discretion, might assume to create, and grant to the people, the prohibitions themselves would impliedly authorize legislatures to destroy those very rights, which they now are commanded to hold sacred.
So, too, “the obligation of contracts,” which the States are forbidden to impair, is the natural obligation; that obligation, which contracts have of natural right, and in conformity with natural justice; and not any merely arbitrary, fantastic, absurd, or unjust obligation, which ignorant, corrupt, or tyrannical legislatures may assume to create, and attach to contracts. Otherwise this very prohibition against “any law impairing the obligation of contracts,” would allow legislatures, in their pleasure or discretion, to destroy the obligation of all contracts whatsoever.
That this constitutional “obligation of contracts” is the natural obligation, is proved by the language of the provision itself, which, as has already been said, implies that “the obligation [singular] of contracts” [plural] is one and the same obligation for all contracts whatsoever, that have any legal obligation at all. This obligation, which is the same in all obligatory contracts, must necessarily be the natural obligation, and not any artificial one prescribed by legislatures; because it would obviously be impossible for legislatures to create any one obligation, different from the natural one, and prescribe it for, or attach it to, all contracts whatsoever. Certainly no such thing was ever attempted, or thought of.
This obligation, which the States are forbidden to impair, is proved to be the natural one, by still another fact, viz.: that it is, and necessarily must be, the same in every State in the Union; forasmuch as the prohibition mentions but one obligation, which the States are forbidden to impair; and the prohibition to impair that one obligation is imposed alike upon all the States. If this “obligation” were an artificial one, to be created by State legislatures, it would be liable to be different in every State, since the constitution does not authorize any