Assuming it now to be proved that the "obligation of contracts," which
the States are forbidden to "impair," is the _natural_ "obligation"; and
that, _constitutionally speaking_, this provision secures to all the
people of the United States the right to enter into, and have the
benefit of, all contracts whatsoever, that have that _one natural_
"obligation," let us look at some of the more important of those State
laws that have either impaired that obligation or prohibited the
exercise of that right.
1. That law, in all the States, by which any, or all, the contracts of
persons, under twenty-one years of age, are either invalidated, or
forbidden to be entered into.
The mental capacity of a person to make reasonable contracts, is the
only criterion, by which to determine his legal capacity to make
obligatory contracts. And his mental capacity to make reasonable
contracts is certainly not to be determined by the fact that he is, or
is not, twenty-one years of age. There would be just as much sense in
saying that it was to be determined by his height or his weight, as
there is in saying that it should be determined by his age.
Nearly all persons, male and female, are mentally competent to make
reasonable contracts, long before they are twenty-one years of age. And
as soon as they are mentally competent to make reasonable contracts,
they have the same natural right to make them, that they ever can have.
And their contracts have the same natural "obligation" that they ever
can have.
If a person's mental capacity to make reasonable contracts be drawn in
question, that is a question of fact, to be ascertained by the same
tribunal that is to ascertain all the other facts involved in the case.
It certainly is not to be determined by any arbitrary legislation, that
shall deprive any one of his natural right to make contracts.
2. All the State laws, that do now forbid, or that have heretofore
forbidden married women to make any or all contracts, that they are, or
were, mentally competent to make reasonably, are violations of their
natural right to make their own contracts.
A married woman has the same natural right to acquire and hold property,
and to make all contracts that she is mentally competent to make
reasonably, as has a married man, or any other man. And any law
invalidating her contracts, or forbidding her to enter into contracts,
on the ground of her being married, are not only absurd and outrageous
in themselves, but are also as plainly violations of that provision of
the constitution, which forbids any State to pass any law impairing the
natural obligation of contracts, as would be laws invalidating or
prohibiting similar contracts by married men.
3. All those State laws, commonly called acts of incorporation, by which
a certain number of persons are licensed to contract debts, without
having their individual properties held liable to pay them, are laws
impairing the natural obligation of their contracts.
On natural principles of law and reason, these persons are simply
partners; and their private properties, like those of any other
partners, should be held liable for their partnership debts. Like any
other partners, they take the profits of their business, if there be any
profits. And they are naturally bound to take all the risks of their
business, as in the case of any other business. For a law to say that,
if they make any profits, they may put them all into their own pockets,
but that, if they make a loss, they may throw it upon their creditors,
is an absurdity and an outrage. Such a law is plainly a law impairing
the natural obligation of their contracts.
4. All State insolvent laws, so-called, that distribute a debtor's
property equally among his creditors, are laws impairing the natural
obligation of his contracts.
If the natural obligation of contracts were known, and recognized as
law, we should have no need of insolvent or bankrupt laws.
The only force, function, or effect of a _legal_ contract is to convey
and bind rights of property. A contract that conveys and binds no right
of property, has no _legal_ force, effect, or obligation whatever.[4]
[4] It may have very weighty moral obligation; but it can have
no legal obligation.
Consequently, the natural obligation of a contract of debt binds the
debtor's property, and nothing more. That is, it gives the creditor a
mortgage upon the debtor's property, and nothing more.
A first debt is a first mortgage; a second debt is a second mortgage; a
third debt is a third mortgage; and so on indefinitely.
The first mortgage must be paid in full, before anything is paid on the
second. The second must be paid in full, before anything is paid on the
third; and so on indefinitely.
When the mortgaged property is exhausted, the debt is cancelled; there
is no other property that the contract binds.
If, therefore, a debtor, at the time his debt becomes due, pays to the
extent of his ability, and has been guilty of no fraud, fault, or
neglect, during the time his debt had to run, he is thenceforth
discharged from all legal obligation.
If this principle were acknowledged, we should have no occasion, and no
use, for insolvent or bankrupt laws.
Of course, persons who have never asked themselves what the _natural_
"obligation of contracts" is, will raise numerous objections to the
principle, that a legal contract binds nothing else than rights of
property. But their objections are all shallow and fallacious.
I have not space here to go into all the arguments that may be necessary
to prove that contracts can have no _legal_ effect, except to bind
rights of property; or to show the truth of that principle in its
application to all contracts whatsoever. To do this would require a
somewhat elaborate treatise. Such a treatise I hope sometime to publish.
For the present, I only assert the principle; and assert that the
ignorance of this truth is at least one of the reasons why courts and
lawyers have never been able to agree as to what "the obligation of
contracts" was.
In all the cases that have now been mentioned,--that is, of minors
(so-called), married women, corporations, insolvents, and in all other
like cases--the tricks, or pretences, by which the courts attempt to
uphold the validity of all laws that forbid persons to exercise their
natural right to make their own contracts, or that annul, or impair, the
_natural_ "obligation" of their contracts, are these:
1. They say that, if a law forbids any particular contract to be made,
such contract, being then an illegal one, can have no "obligation."
Consequently, say they, the law cannot be said to impair it; because the
law cannot impair an "obligation," that has never had an existence.
They say this of all contracts, that are arbitrarily forbidden;
although, naturally and intrinsically, they have as valid an obligation
as any others that men ever enter into, or as any that courts enforce.
By such a naked trick as this, these courts not only strike down men's
natural right to make their own contracts, but even seek to evade that
provision of the constitution, which they are all sworn to support, and
which commands them to hold valid the _natural_ "obligation" of all
men's contracts; "anything in the constitutions or laws of the States to
the contrary notwithstanding."
They might as well have said that, if the constitution had declared that
"no State shall pass any law impairing any man's natural right to life,
liberty, or property"--(that is, his _natural_ right to live, and do
what he will with himself and his property, so long as he infringes the
right of no other person)--this prohibition could be evaded by a State
law declaring that, from and after such a date, no person should have
any natural right to life, liberty, or property; and that, therefore, a
law arbitrarily taking from a man his life, liberty, and property, could
not be said to impair his right to them, because no law could impair a
right that did not exist.
The answer to such an argument as this, would be, that it is a natural
truth that every man, who ever has been, or ever will be, born into the
world, _necessarily has been, and necessarily will be, born with an
inherent right to life, liberty, and property_; and that, in forbidding
this right to be impaired, _the constitution presupposes, implies,
assumes, and asserts that every man has, and will have, such a right_;
and that this _natural_ right is the very right, which the constitution
forbids any State law to impair.
Or the courts might as well have said that, if the constitution had
declared that "no State shall pass any law impairing the obligation of
contracts made for the purchase of food," that provision could have been
evaded by a State law forbidding any contract to be made for the
purchase of food; and then saying that such contract, being illegal,
could have no "obligation," that could be impaired.
The answer to this argument would be that, by forbidding any State law
impairing the obligation of contracts made for the purchase of food, the
constitution presupposes, implies, assumes, and asserts that such
contracts have, and always will have, a _natural_ "obligation"; and
that this _natural_ "obligation" is the very "obligation," which the
constitution forbids any State law to impair.
So in regard to all other contracts. The constitution presupposes,
implies, assumes, and asserts the natural truth, that certain contracts
have, _and always necessarily will have_, a _natural_ "obligation." And
this _natural_ "obligation"--which is the only real obligation that any
contract can have--is the very one that the constitution forbids any
State law to impair, in the case of any contract whatever that has such
obligation.
And yet all the courts hold the direct opposite of this. They hold that,
if a State law forbids any contract to be made, such a contract can then
have no obligation; and that, consequently, no State law can impair an
obligation that never existed.
But if, by forbidding a contract to be made, a State law can prevent the
contract's having any obligation, State laws, by forbidding any
contracts at all to be made, can prevent all contracts, thereafter made,
from having any obligation; and thus utterly destroy all men's natural
rights to make any obligatory contracts at all.
2. A second pretence, by which the courts attempt to evade that
provision of the constitution, which forbids any State to "pass any law
impairing the obligation of contracts," is this: They say that the State
law, that requires, or obliges, a man to fulfil his contracts, _is
itself_ "_the obligation_," which the constitution forbids to be
impaired; and that therefore the constitution only prohibits the
impairing of any law for enforcing such contracts as shall be made under
it.
But this pretence, it will be seen, utterly discards the idea that
contracts have any _natural_ obligation. It implies that contracts have
no obligation, except the laws that are made for enforcing them. But if
contracts have no _natural_ obligation, they have no obligation at all,
_that ought to be enforced_; and the State is a mere usurper, tyrant,
and robber, in passing any law to enforce them.
Plainly a State cannot rightfully enforce any contracts at all, unless
they have a _natural_ obligation.
3. A third pretence, by which the courts attempt to evade this provision
of the constitution, is this: They say that "the law is a part of the
contract" itself; and therefore cannot impair its obligation.
By this they mean that, if a law is standing upon the statute book,
prescribing what obligation certain contracts shall, or shall not, have,
it must then be presumed that, whenever such a contract is made, the
parties intended to make it according to that law; and really to make
the law a part of their contract; _although they themselves say nothing
of the kind_.
This pretence, that the law is a part of the contract, is a mere trick
to cheat people out of their natural right to make their own contracts;
and to compel them to make only such contracts as the lawmakers choose
to permit them to make.
To say that it must be presumed that the parties intended to make their
contracts according to such laws as may be prescribed to them--or, what
is the same thing, to make the laws a part of their contracts--is
equivalent to saying that the parties must be presumed to have given up
all their natural right to make their own contracts; to have
acknowledged themselves imbeciles, incompetent to make reasonable
contracts, and to have authorized the lawmakers to make their contracts
for them; for if the lawmakers can make any part of a man's contract,
and presume his consent to it, they can make a whole one, and presume
his consent to it.
If the lawmakers can make any part of men's contracts, they can make the
whole of them; and can, therefore, buy and sell, borrow and lend, give
and receive men's property of all kinds, according to their (the
lawmakers') own will, pleasure, or discretion; without the consent of
the real owners of the property, and even without their knowledge, until
it is too late. In short, they may take any man's property, and give it,
or sell it, to whom they please, and on such conditions, and at such
prices, as they please; without any regard to the rights of the owner.
They may, in fact, at their pleasure, strip any, or every, man of his
property, and bestow it upon whom they will; and then justify the act
upon the presumption that the owner consented to have his property thus
taken from him and given to others.
This absurd, contemptible, and detestable trick has had a long lease of
life, and has been used as a cover for some of the greatest of crimes.
By means of it, the marriage contract has been perverted into a
contract, on the part of the woman, to make herself a legal non-entity,
or _non compos mentis_; to give up, to her husband, all her personal
property, and the control of all her real estate; and to part with her
natural, inherent, inalienable right, as a human being, to direct her
own labor, control her own earnings, make her own contracts, and provide
for the subsistence of herself and her children.
There would be just as much reason in saying that the lawmakers have a
right to make the entire marriage contract; to marry any man and woman
against their will; dispose of all their personal and property rights;
declare them imbeciles, incapable of making a reasonable marriage
contract; then presume the consent of both the parties; and finally
treat them as criminals, and their children as outcasts, if they presume
to make any contract of their own.
This same trick, of holding that the law is a part of the contract, has
been made to protect the private property of stockholders from liability
for the debts of the corporations, of which they were members; and to
protect the private property of special partners, so-called, or limited
partners, from liability for partnership debts.
This same trick has been employed to justify insolvent and bankrupt
laws, so-called, whereby a first creditor's right to a first mortgage on
the property of his debtor, has been taken from him, and he has been
compelled to take his chances with as many subsequent creditors as the
debtor may succeed in becoming indebted to
All these absurdities and atrocities have been practiced by the
lawmakers of the States, and sustained by the courts, under the pretence
that they (the courts) did not know what the natural "obligation of
contracts" was; or that, if they did know what it was, the constitution
of the United States imposed no restraint upon its unlimited violation
by the State lawmakers.