This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A law in force when a contract is made is part thereof.1 Whatever objections may be made to the validity of such law, it does not impair the obligation of such contracts.2 To be invalid as impairing the obligation of contracts a statute " must be one enacted after the making of the contract, the obligation of which is claimed to be impaired."3 Thus a statute imposing a personal liability upon the stockholders of foreign corporations doing business within the state does not impair the obligation of the contract entered into between the stockholders of a foreign corporation subsequently incorporated for the purpose of doing business in that state.4 So a law providing that an assignment for the benefit of creditors may be made whenever property is seized on execution or attachment and that such assignment shall discharge the lien of such levy or attachment, is valid as applying to debts subsequently incurred.5 So a statute giving a lien on crops to laborers and making it superior to an earlier mortgage is valid as to mortgages executed after such statute.6 A law passed after a contract is made purporting to affect it, may be invalid as impairing the obligation of such contract.7 However breach of a contract entered into by a state may give a right of action, subject to the consent of such state, but the statute or resolution whereby such breach is ordered is not a law impairing the obligation of its contract. Thus a joint resolution of the legislature requiring the treasurer to write off past due bonds is not a law impairing the obligation of a contract.8
27 Charlotte, etc., R. R. v. Gibbs, 142 U. S. 386.
28 New York v. Squire. 145 U. S. 175; affirming People v. Squire. 107 N. Y. 593; 1 Am. St. Rep. 893; 14 N. E. 820. (The statute in question also required such corporations to file maps showing the location of such conductors).
29 Commonwealth v. Mining Co., - Ky. - ; 79 S. W. 287.
1 McCullough v. Virginia, 172 U. S. 102; Denny v. Bennett, 128 U. S. 489; Cravens v. Ins. Co., 148 Mo. 583; 71 Am. St. Rep. 628; 53 L. R. A. 305; 50 S. W. 519; Reed v. Painter, 129 Mo. 674; 31 S. W. 919.
2 Hooker v. Burr. 194 U. S. 415; Blackstone v. Miller, 188 U. S. 189; Pinney v. Nelson, 183 U. S. 144; McCullough v. Virginia, 172 U. S. 102; Galveston, etc., Ry. v. Texas, 170 U. S. 226; Brown v. Smart,
145 U. S. 454; National Bank v. Augusta, etc.. Co., 104 Ga. 403; 30 S. E. 888; Burdick v. People, 149 111. 600, 611; 41 Am. St. Rep. 329; 24 L. R. A. 152; 36 N. E. 948, 952; Robison v. Harrington, 61 111. App. 543; Small v. Hammes, 156 Ind. 556; 60 N. E. 342; Barrett v. Milli-kan, 156 Ind. 510; 83 Am. St. Rep. 220; 60 N. E. 310; Frazee v. Dupre, 51 La. Ann. 411; 25 So. 260; Well-man v. Ry., 83 Mich. 592; 47 N. W. 489; Perkins v. Stewart, 75 Minn. 21; 77 N. W. 434; St. Charles v. Hackman, 133 Mo. 634; 34 S. W. 878; Ellerbe v. Benefit Association, 114 Mo. 501; 21 S. W. 843; Williams v. Donough, 65 O. S. 499; 5C L. R. A. 766; 63 N. E. 84; Mc-Master v. Normal, 162 Pa. St. 260; 29 Atl. 734.
3 Lehigh Water Co. v. Easton. 121 U. S. 388, 391; quoted in Pinney v. Nelson, 183 U. S. 144, 147.