Loophole

“ That legislators do not think the rule one of universal obligation, or that, upon grounds of public policy it should always be applied, is very certain. For, in some statutes, it is said in terms that such contracts are void; in others, that they are not so. In one statute, there is no prohibition expressed, and only a penalty; in another, there is prohibition and penalty, in some of which, contracts in violation of them are void or not, according to the subject-matter and object of the statute ”

“ It is true that a statute, containing a prohibition and a penalty, makes the act which it punishes unlawful, and the same may be implied from a penalty without a prohibition; but it does not follow that the unlawfulness of the act was meant by the legislature to avoid a contract made in contravention of it. When the statute is silent, and contains nothing from which the contrary can be properly inferred, a contract in contravention of it is void. ”

“ We shall advert to parallel considerations in connection with the alleged interference with commerce between the states. The prohibition in this case is not absolute, but is only conditional on the failure to deposit a copy of the plaintiff's charter and to pay a small fee. It is merely incident to a regulation which, but for the contract, unquestionably would be proper, and which is familiar in the laws of the state. It can be avoided by compliance with the regulation. ”

“ Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court. ”

“ Does the act of the legislature creating the monopoly in question abridge the privileges and immunities of the plaintiffs in error as citizens of the United States? Does it deprive them of liberty or property without due process of law, or deny them the equal protection of the laws of the State, they being persons "within its jurisdiction?" ”

“ Can this performance of a legal duty, a duty both to stockholders of the company and to the public, give to plaintiffs a right of action? Can they found such a right on an agreement void for want of corporate authority and forbidden by the policy of the law? To hold that they can, is, in our opinion, to hold that any act performed in executing a void contract makes all its parts valid, and that the more that is done under a contract forbidden by law, the stronger is the claim to its enforcement by the courts. ”

“ If there is in existence a contract, valid in itself, such as the parties had a right to make, not embracing by its terms or by just legal implication the provisions of other laws, then any State law that changes or controls it, or can be so applied by the judicial tribunals of the State as to change or control it, is contrary to the language and intention of the constitutional prohibition, no matter when such law bears date,-no matter whether its operation be prospective or retrospective,-on contracts existing when it was passed, or entered into subsequently. ”

“ The actual repeal of such a statute cannot correctly be regarded as the violation of any vested right, or the impairing of the obligation of a contract, for no one can claim to have a perfect and vested right, through all future time, in the mere capacity to do an act, from the absence of a law forbidding that act. ”

“ We are restricted by the settled limits of our jurisdiction to the specific inquiry whether the statutes themselves, upon which the judgment below rests, impair the obligation of any contract which the company, or its policy-holders, had with the state, or infringe any right secured by the national constitution. ”

“ The right of the company to the remaining odd-numbered sections adjoining the road completed and accepted, not reserved, is equally clear. If the whole of the proposed road has not been completed, any forfeiture consequent thereon can be asserted only by the grantor, the United States, through judicial proceedings, or through the action of congress. Schulenberg v. Harriman, 21 Wall. 45. A third party cannot take upon himself to enforce conditions attached to the grant when the government does not complain of their breach. ”

“ The prohibition, then, is that the lands shall not be 'affected . . . by any obligation of any character,' and, as we have seen, an obligation may arise from a tort as well as from a contract,-from a breach of duty or the violation of a right. Exchange Bank v. Ford, 7 Colo. 314, 316, 3 Pac. 449. If this were not so, a prearranged tort and a judgment confessed would become an easy means of circumventing the policy of the law. ”

“ Certainly, if such was the purpose of the framers in regard to the clause referred to, a like purpose must have been intended with reference to the due faith and credit clause. If a judgment for a penalty in money, rendered in one state, may not be enforced in another, by the same principles a judgment rendered in one state, giving to the party the results of prohibited and criminal acts done in another state, is not entitled to be enforced in the state whose laws have been violated. ”

“ Where a contract is void at law for want of power to make it, a court of equity has no jurisdiction to enforce such contract, or in the absence of fraud, accident, or mistake to so modify it as to make it legal, and then enforce it. ”

“ If the changing or repealing statute leaves the parties a substantial remedy, the legislation does not exceed its authority. Rights and remedies shade one into the other so that it is sometimes difficult to say that a particular act creates a right or merely gives a remedy. So, also, a statute, under the form of taking away or changing a particular remedy, may take away an existing property right, or impair the obligation of a contract. ”

“ It is within the undoubted power of government to restrain some individuals from all contracts, as well as all individuals from some contracts. It may deny to all the right to contract for the purchase or sale of lottery tickets; to the minor the right to assume any obligations, except for the necessaries of existence; to the common carrier the power to make any contract releasing himself from negligence, and, indeed, may restrain all engaged in any employment from any contract in the course of that employment which is against public policy. ”

“ As the liberty of contract guaranteed by the Constitution is freedom from arbitrary restraint,-not immunity from reasonable regulation to safeguard the public interest,-the question is whether the restrictions of the statute have reasonable relation to a proper purpose. ”

“ The statute-books of the States are full of acts directing the law officers to proceed against corporations, such as banks, insurance companies, and others, in order to have a decree declaring their charters forfeited. Special statutes are also common, ordering suits against such corporations when they have become insolvent, to wind up their business affairs, and to distribute their assets, and prescribing with minuteness the course of procedure which shall be followed and the court in which the suit shall be brought. ”

“ In all matters of contract, as we have said, the ascertained will of the parties prevails. But this means a will both lawful and free. Hence there are limits to the force of the general rule, fixed partly by the law of the land, which is above individual will and interests, partly by the need of Illegality. securing good faith and justice between the parties themselves against fraud or misadventure. Agreements cannot be enforced when their performance would involve an offence against the law. ”

“ Where a contract is outlawed by statute or is otherwise contrary to public policy, the illegality may be set up as a defense to a suit for enforcement despite the absence of a legislative recognition of that defense. ”

“ But, generally speaking, when we speak of the obligation of a contract, we include in the idea some known means acknowledged by the municipal law to enforce it. Where all such means are absolutely denied, the obligation of the contract is understood to be impaired, though it may not be completely annihilated. Rights may, indeed, exist without any present adequate correspondent remedies between private persons. Thus, a state may refuse to allow imprisonment for debt; and the debtor may have no property. ”

“ When the highest court in the nation decided that the legal tender act was ultro-active in its operations, that court decided, in effect, that under the constitution congress possessed the power to annul contracts made between private citizens, that one might legally take from another a part of his property without compensation. While that court has uniformly decided that bonds obtained from counties, cities, and towns fraudulently, and without consideration, must be paid, it decides that a retroactive statute may be passed which takes a man's property without consideration ”

“ But exactly the same things, if done by two or more persons, firms, corporations, or associations of persons who shall have combined their capital, skill, or acts, in respect of their property, merchandise, or commodities held for sale or exchange, is made by the statute a public offense, and every principal, manager, director, agent, servant, or employee knowingly carrying out the purposes, stipulations, and orders of such combination is punishable by a fine of not less than $2,000 nor more than $5,000. ”

“ In modern societies every part is related so organically to every other that what affects any portion must be felt more or less by all the rest. Therefore, unless everything is to be forbidden and legislation is to come to a stop, it is not enough to show that, in the working of a statute, there is some tendency, logically discernible, to interfere with commerce or existing contracts. ”

“ It does violence to the rule contended for by counsel for the companies,-that words are to be considered in their ordinary signification, and every part of the statute, if practicable, given meaning in harmony with its other provisions upon the subject. It is urged that the words 'as made or amended' must have reference to the future, and were intended to give a prospective operation to the act, and to read into all contracts thereafter to be made, as well as theretofore made, a right to use the streets without the consent of the city for the extended period. ”

“ In the present instance, however, as before explained, the extent and operation of the prohibitory law being regarded as forbidding any transfer whatever, and, if it takes place, as barring every kind of remedy on the note, the decisive question may be repeated, How can this happen without injury to the plaintiff's contracts? When every form of redress on a contract is taken away, it will be difficult to see how the obligation of it is not impaired. ”

“ It arises out of the contract stated in the bill, and there is no act of Congress providing for or regulating contracts of this kind. The rights of the parties depend altogether upon common law and equity principles. The object of the bill is to have this contract set aside and declared to be forfeited; and the prayer is, 'that the appellant's reinvestiture of title to the license granted to the appellees, by reason of the forfeiture of the contract, may be sanctioned by the court,' and for an injunction. ”

“ In modes of proceeding and forms to enforce the contract the legislature has the control, and may enlarge, limit, or alter them, provided it does not deny a remedy or so embarrass it with conditions or restrictions as seriously to impair the value of the right. Bronson v. Kinzie, 1 How. 311; Von Hoffman v. City of Quincy, supra; Tennessee v. Sneed, supra.
The result of the decisions of this court above quoted is that the abolition of imprisonment for debt is not of itself such a change in the remedy as impairs the obligation of the contract. ”

“ A common informer sues for a penalty, or a revenue officer makes a seizure under a promise that on conviction the recovery shall be shared, and yet the State discharges the forfeiture, or prevents the recovery by a repeal of the law, violating thereby no vested right nor impairing the obligation of any contract. ”

“ When a right has arisen upon a contract, or a transaction in the nature of a contract authorized by statute, and has been so far perfected that nothing remains to be done by the party asserting it, the repeal of the statute does not affect it, or an action for its enforcement. ”

“ In determining whether the requisite jurisdictional amount is in controversy, where it does not appear that the complainant is deprived of its license or is prevented by the regulation from prosecuting its business, the question is not the value or net worth of the business, but the value of the right to be free from the regulation, and this may be measured by the loss, if any, that would follow the enforcement of the rule prescribed. ”

“ A pretension like this would forestall and prevent legislation upon every subject. A wholly different state of things would have existed had the assignment to the plaintiffs been made anterior to the repeal of the statute, for then the rights of these parties would have been vested and complete; but the assignment was in this instance subsequent, by more than a year, to the passage of the repealing statute, was a new and separate contract, and entered into with necessary knowledge of its provisions, and made apparently in defiance thereof. ”

“ Further, under that view, every individual owner of property in a state may, upon like general grounds, by an original suit, irrespective of any direct or special injury to him, invoke the original jurisdiction of a circuit court of the United States, to restrain and prevent violations of the anti-trust act of Congress. ”