Thus far, there is nothing to permit a State to * release a debtor from the liability of his subsequently acquired property for his debt And formerly, a great majority of the insolvent laws of the States, conformed to the insolvency system of England, so far as to create, or rather leave, this liability. But it was afterwards held by the Supreme Court of the United States, that an insolvent law which took away this liability, still affected only the remedy, (u)1 Hence the clause of

Bank of United States v. Halstead, 10 Wheat. 51. Exemption of particular persons or property, - Morris v. Eves, 11 Mart. (La.) 730 , Mather v. Bush, 16 Johus. 233, p. 244, note (6). Privilege attached merely to person or territory, - Hinkley v. Morean, 3 Mason, 88. Story, J . "The present suit is to be decided by the law of Massachusetts; and a discharge of the person of the debtor in another State [Maryland in the case before him], which leaves the contract in fall force, has no effect to discharge the person here. No court gives effect to the local laws of another country or State in respect to the forms or force of process." In Melan v. Fitz James, 1 B. & P. 138, a different doctrine was laid down by the majority of the court, contrary to the opinion of Mr. Justico Heath. In Imlay v. Ellefsen, 2 East, 454, Lord Ellenborough expressed his unwillingness to accede to the doctrine of Melan v. Fitz James. The general doctrine of Hinkley v. Morean is recognized in Fenwick v Sears, 1 Cranch, 259; Dixon v. Ramsay, 3 id. 319; Pearsall v. Dwight, 2 Mass. 84; 3 Burge on Col. & For. Law, 1046; Story on Conflict of Laws, § 339; Atwater v. Townsend, 4 Conn. 47; and see Smith v. Healy, id. 49; Smith v. Spinolla, 2 Johns. 198; White v. Canfield, 7 Johns. 117; Titus v. Hobart, 5 Mason, 378; Nash v. Tupper, 1 Caiues, 402; Lodge v. Phelps, 2 Caines, Cas. in Error, 321; Green v. Sarmieuto, 3 Wash. C. C. 17; Golden v. Prince, id. 314. The distinction in cases of this class is well laid down by Parris, J., in Judd v.

Porter, 7 Greenl. 337 • "This distinction is to be found in all the cases, that when the contract is discharged, either by a certificate of bankruptcy or otherwise, the body of the debtor is not thereafter liable to arrest in any jurisdiction for debts existing at the time of the bankruptcy; for, the contract being at an end, there remains nothing upon which the remedial laws of any government can operate. But when the body only of the debtor is discharged, leaving the contract unimpaired, the discharge is effectual only to the extent of the jurisdiction under which it was granted, and extra terratorium has no efficacy." In addition to authority cited above, see the numerous cases cited by Professor Greenteaf, in the argument in Judd v. Porter. A different view was adopted in Millar v. Hall, 1 Dall. 229. The court say, that the defendant was compelled by law to transfer all his property for the benefit of his creditors. " Having done this we must presume that he has fairly done it, and therefore to permit the taking his person here, would be to attempt to compel him to perform an impossibility, that is, to pay a debt after he has been deprived of every means of payment, an attempt which would at least amount to perpetual imprisonment, unless the benevolence of his friends should interfere to discharge the plaintiff's account." Smith v. Brown, 3 Binn. 201; Hilliard v. Greenleaf, 5 id. 336, n.; Boggs v. Teackle, id 332.

(u) It was at one time supposed that this question was passed upon by the Supreme Court in M'Millan v. M'Neill,

1 In Denny v Bennett, 128 U. S. 489, the court held valid a statute of Minnesota providing that whenever the property of a debtor is seized by an attachment or execution against him, he may make an assignment of all his property and estate not exempt by law, for the equal benefit of all his creditors who shall file releases of their debts and claims, and that his property shall be equitably distributed among such creditors; and Mr. Justice Miller, speaking for the court, said (p. 495): " No reason has been suggested why the legislature could not exempt all interests in landed estate from execution and sale under judgments against the owner, and perhaps all his personal property. However this may be, it is very certain that the established construction of the Constitution of the United States against impairing the obligation of contracts requires that statutes of this class shall be construed to be parts of all

* the Constitution, prohibiting the impairing of the obligation of contracts, may be said to permit any insolvent

4 Wheat. 209. That such was not the case, see the remarks of Mr. Justice Washington, 12 Wheat. 254. The point decided in that case was, 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. The case of Ogden v. Saunders, 12 Wheat. 213, is the leading case on this topic. It was a case, as stated by Mr. Justice Washington, delivering his opinion, " 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." The action was brought by a citizen of New Orleans, in the United States District Court. The question, therefore, was directly upon the constitutionality of this bankrupt law, discharging, as it did, not only the person of the debtor, but his subsequently acquired effects, from liability to attachment and levy. And this ques* tion of constitutionality was twofold. 1. As affecting the rights of citizens of the same State. 2. As affecting the rights of citizens of different States. Washington, J., delivering his opinion, drew a distinction between impairing the contract and impairing the obligation of the contract. What is the obligation? Marshall, C.J, in 4 Wheat. 197, says, it is "The law which binds the parties to perform their agreement." What is the law referred to? Not the moral law, not exclusively the universal law of civilized nations (p. 258). It is the municipal law of the State (p. 259) which is a part of the contract, and goes with it wherever the parties are to be found If it forms part of the contract, it is a solecism to say that it impairs the obligation (p. 260). This law no more impairs the obligation of contracts than an agreement, by the terms and at the time of contracting, that in case of the debtor's insolvency and surrender of all his property for the benefit of his creditors, he shonld be discharged from his contract. Nor can it be objected, that if this be so, a repeal of the law in execution, where the contract was formed, could violate the contract. The repeal would only affect subsequent contracts. This may be illustrated by statutes of'usury, construction, fraud, and limitation. In all these the distinction between retrospective and prospective operation is to be observed. Especially an argument might be drawn from the case of limitations. The collocation of the clauses of this Constitution, relating to this subject, formed the basis of an argument. The conclusion reached by Mr. Justice Washington was, that a discharge under these circumstances was a valid bar; the question of the effect between citizens of different States not having yet been argued at the bar. Mr. Justice Johnson, in this case, after vindicating the doctrine of Sturges v. Crowninshield, examines the ethical force of the terms "obligation of contracts," and reaches a conclusion which he admits goes further than the doctrine of Sturges v. Crowninshield, that a law discharging the future effects of the debtor is valid, even as to contracts made prior to the passage of the law, and multo for-tiori, subsequent ones. He repudiates the doctrine that the remedy is ingrafted into the law, but maintains, that inasmuch as a knowledge of the law is imputed to every one who enters into contracts, no one can complain of surprise or want of public faith, in the application of those laws. The right to pass laws of limitation cannot be maintained, if that to pass bankrupt laws of this character is denied. The right to pass such laws has been asserted by every civilized nation (p. 287). Not a sufficient* objection to say, that if the obligation of contracts has relation to all the laws which give or modify the remedy, the obligation is ambulatory and uncertain (p. 288). Nor can a right in the States to pass tender laws be derived from that to pass bankrupt laws, for the former are expressly forbidden. It is urged that this is an arbitrary act, and future acquisitions might he made liable. But in answer, why may it not be urged, that the community has a right to set bounds to the will of contracting parties, for the public good, in this as in many other instances (p. 289) ? Thompson and Trimble JJ., concurred with the above-named judges. From this opinion Story and Duvall, JJ., together with the Chief Justice, dissented; and these were the grounds of their decision, as gathered from the opinion of Marshall, C. J.: 1. That the words of the clause of the Constitution under consideration, taken in their natural and obvious sense, admit of a prospective as well as a retrospective contracts made when they are in existence, and therefore cannot be held to impair their obligation." law which does not expressly discharge the debt itself. And as those of the State laws which discharge the debt, as that of Massachusetts, for example, are made to apply only to debts founded on contracts entered into after the passing of the act, and as the law existing when and where a contract is made forms a part of it, and consequently enters into all contracts made subsequently to the law, it may now be said that a State law, whatever be its *name, which is in fact a bankrupt law in all respects, may be constitutional. In the next place, the municipal law of any State is a part of every contract made in that State, and to be performed therein. If the contract is made elsewhere, but to be performed in that State, we have seen, in our chapter on the Law of Place, that the contract has a kind of twofold law of place. In general, it is said that the place of a contract is that where it is to be performed, because it may be presumed that the parties proposed to be governed by those laws in the performance of the contract (v) Each State has, then, by the present weight of authority, the right to determine for its own citizens, and its own courts, what it will, in respect to a contract which is either made within its sovereignty, or to be performed there. Thus, for instance, the insolvent law of Massachusetts absolutely and wholly discharges the debtor from all debts, proved or provable, and founded upon any contract made by him within the Commonwealth, or to be performed within the same, (w) operation. 2. That an act of the legislature does not enter into the contract, and become one of the conditions stipulated by the parties; nor does it act externally on the agreement unless it have the full force of law. 3. That contracts derive their obligations from the act of the parties, not from the grant of government; and that the right of government to regulate the manner, or to prohibit such as may be against the policy of the State, is entirely consistent with their inviolability after they have been formed. 4. That the obligation of a contract is not identified with the means which government may furnish to enforce it; and that a prohibition to pass any law impairing it, does not imply a prohibition to vary the remedy, nor does a power to vary the remedy imply a power to impair the obligation derived from the act of the parties. So that the first branch of the question of constitutionality was answered in the affirmative. The second branch of the question having been argued, Washington, Thompson, and Trimble, JJ., were of opinion that the same reasons which governed them at the first hearing, applied in this aspect of the question. Johnson, J, who had agreed with them in the view then adopted, was of opinion, that although, "as between citizens of the same State, a discharge of a bankrupt by the laws of that State, is valid as it affects posterior contracts," yet, "that as against creditors, citizens of other States, it is invalid as to all contracts." The other three judges concurred in the opinion. Boyle v. Zacharie, 6 Pet. 348. So the second branch of the question was answered in the negative. Blanchard v. Russell, 13 Mass. 1; Mather v Bush, 16 Johns. 233; Hicks v Hotchkiss, 7 Johns. Ch. 299; Crittenden v. Jones, 5 Hall's L. J. 520; Townsend v. Townsend, Niles' Reg. 15th Sept. 1821; Shaw v. Robbins, 12 Wheat. 369, note (a); Mason v. Haile, 12 Wheat. 370, Washington, J., dissenting.