777. By Contracts, in the sense of the Constitution, are understood:-1st. Every executed agreement, whether between individuals, or between individuals and a State; and 2dly. Every executory agreement which confers a right of action, or creates a binding obligation, in relation to subjects of a valuable nature, and which may be asserted in a Court of Justice. But the term does not comprehend the political relations between a Government and its Citizens.

778. The power possessed by a State Legislature, to which every thing is granted that is not expressly reserved, and the temptations to the abuse of such a power, render express restrictions upon its exercise, in regard to Contracts, useful, if not necessary; but the Legislature of the Union has no power to interfere with Contracts, unless it be expressly granted to them.

779. By the obligation of Contracts, in the meaning of the Constitution, is understood, not the mere moral, but the legal obligation; and in this sense, a system of Bankruptcy impairs the obligation of Contracts when it releases the party from the necessity of performing them. But Congress is expressly invested with this power, with respect to Bankruptcies, as an enumerated, not as an implied power; and in no other form can they impair the obligation of Con

tracts.

780. This prohibition, in regard to the States, extensively and deeply affects their legislative authority, as a compact between two States, or a grant from a State to individuals, is as much protected by this restriction, as a grant from one individual to another; and the State is as much inhibited from impairing its own Contracts, or those to which it is a party, as it is from impairing the obligation of a Contract between two individuals.

781. The words of the prohibition not only comprehend equally executed and executory Contracts, but extend to them whether they are express Contracts, or such as declare on their face the terms of the agreement at the time of making it; or whether they are implied Contracts, or those of which the terms are not declared, but are such as reason and justice dictate from the nature of the transaction.

782. A legislative compact or grant, is a Contract within the meaning of the Constitution; and when a Law in its nature amounts to a Contract, and absolute rights have vested under it, its repeal can neither divest those rights, nor annihilate or impair a title acquired under it; for a grant is a Contract executed ; and in no case, and for no cause, can a party impeach the validity of his own deed.

783. Legislative grants, then, are irrevocable in their nature, and are not held at the mere pleasure of the Government; nor can a Legislature repeal Statutes creating private Corporations, or confirming to them property acquired under the faith of previous Laws, and by such repeal, vest the property in others, without the consent or default of the Corporators.

784. This provision of the Constitution, however, has never been understood to embrace any other Contracts than those which respect property, or some object of value, and confer rights capable of being asserted in a Court of Justice.

785. Where the legal interest in literary or charitable Institutions is vested by Charter in Trustees, in order to promote the objects for which they were incorporated, and donations made to them, they are considered within the protection of the Constitution.

786. A grant to a private Trustee for the benefit

of another person, or for any special, private, or public charity, is within the prohibition; as a grant is not the less a Contract, because the possessor takes nothing under it for his own benefit; nor does a private donation, vested in Trustees for objects of a general nature, thereby become a public trust, which the Government may at its pleasure take from the Trustee.

787. Governments cannot revoke a grant, even of their own funds, when made to a private person, or to a Corporation, for special purposes; and after making such grants, they have no remaining authority to enforce the administration of the Trust, than such as is judicial.

788. All Corporate franchises are deemed legal estates; and all incorporeal hereditaments, as they are . termed in the Law, such as Immunities, Offices, and Franchises, are rights regarded by it as valuable; and whenever they are the subject of a grant or Contract, ⚫ are as much within the protection of the Constitution as any others.

789. The objection to a Law on the ground of its impairing the obligation of Contracts, does not depend on the extent of the change effected; any deviation from the terms of the Contract, by postponing or accelerating the period of performance, imposing conditions not expressed in the Contract, or dispensing with the performance of those which it contains, impairs its obligation.

790. A State Insolvent Law, which discharges a debtor from his Contract to pay a debt by a given time, and releases him without payment, from any future obligation to pay, impairs, because it entirely discharges, the obligation of the Contract, if the same were made anterior to the Law.

791. But the States may constitutionally pass such Insolvent Laws, operating upon future contracts made within the State, and between Citizens of the State; whilst, in regard to Contracts made subsequent to the Law, if made without the State, or within it, if between a Citizen of the State and a Citizen of another State, or an Alien, the State does not possess a jurisdiction co-extensive with the Contract, over the parties; and therefore the Constitution of the United States protects such Contracts from prospectivé, as well as retrospective legislation.

792. If, however, a creditor in any such case voluntarily makes himself a party to the proceedings under an Insolvent Law of a State, which discharges the Contract, he will be bound by his own act, and deemed to have abandoned his extra-territorial immunity.

793. The prohibition in question does not apply to Insolvent Laws, or other Laws impairing the obligation of Contracts, passed before the adoption of the Constitution, and operating upon rights of property vested before that time; and State Insolvent Laws have no operation whatever on Contracts made with the United States, for such Contracts are in nowise subject to State jurisdiction..

794. As the prohibition respecting ex post facto Laws applies only to criminal cases, and that now under consideration is confined to Laws impairing the obligation of Contracts; there remain many Laws of a retrospective character, which, however unjust, oppressive, or impolitic, may yet be constitutionally passed by the State Legislatures.

795. The last absolute prohibition is, that no State "shall grant any title of nobility," the reason of which

is the same as that for the like prohibition on the National Government; viz. the inconsistency of such a power with that perfect equality, which is the basis of the National and State institutions; and it would have been useless to prohibit it to the former, if the latter were left free to exercise it.

796. The qualified prohibitions upon the powers of the States, are those which restrict them from laying "any imposts, or duties on imports or exports, except what may be absolutely necessary for execut ing their inspection Laws;" from laying "any duty on tonnage; keeping troops or ships of war, in time of peace; entering into any agreement or compact with another State, or with a foreign power; or from engaging in war, unless actually invaded, or in such imminent danger as will not admit delay-without the consent of Congress."

797. The prohibition in regard to duties on imports and exports, and on tonnage, is founded on the same reasons which prove the necessity of submitting the regulation of Commerce to the National Government; and upon the further consideration that, from the inequality between different States as to commercial advantages, the interests of all would be best promoted, by submitting the whole subject to the control of Congress.

798. An Act of a State Legislature, requiring all importers of foreign goods, and others selling the same by wholesale, to obtain a license from the State, and to pay a sum of money therefor into the State Treasury, is repugnant to' this provision of the Constitution.

799. An impost, or duty on imports, is a tax levied upon articles brought into the country, and especially