Annotation 54 - Article I
''Law'' Defined .--The term comprises statutes, constitutional provisions, 1846 municipal ordinances, 1847 and administrative regulations having the force and operation of statutes. 1848 But are judicial decisions within the clause? The abstract principle of the separation of powers, at least until recently, forbade the idea that the courts ''make'' law and the word ''pass'' in the above clause seemed to confine it to the formal and acknowledged methods of exercise of the law-making function. Accordingly, the Court has frequently said that the clause does not cover judicial decisions, however erroneous, or whatever their effect on existing contract rights. 1849 Nevertheless, there are important exceptions to this rule that are hereinafter set forth.
Status of Judicial Decision .--While the highest state court usually has final authority in determining the construction as well as the validity of contracts entered into under the laws of the State, and the national courts will be bound by their decision of such matters, nevertheless, for reasons that are fairly obvious, this rule does not hold when the contract is one whose obligation is alleged to have been impaired by state law. 1850 Otherwise, the chal lenged state authority could be vindicated through the simple device of a modification or outright nullification by the state court of the contract rights in issue. Similarly, the highest state court usually has final authority in construing state statutes and determining their validity in relation to the state constitution. But this rule too has had to bend to some extent to the Supreme Court's interpretation of the obligation of contracts clause. 1851
Suppose the following situation: (1) a municipality, acting under authority conferred by a state statute, has issued bonds in aid of a railway company; (2) the validity of this statute has been sustained by the highest state court; (3) later the state legislature passes an act to repeal certain taxes to meet the bonds; (4) it is sustained in doing so by a decision of the highest state court holding that the statute authorizing the bonds was unconstitutional ab initio. In such a case the Supreme Court would take an appeal from the state court and would reverse the latter's decision of unconstitutionality because of its effect in rendering operative the act to repeal the tax. 1852
Suppose further, however, that the state court has reversed itself on the question of the constitutionality of the bonds in a suit by a creditor for payment without there having been an act of repeal. In this situation, the Supreme Court would still afford relief if the case is one between citizens of different States, which reaches it via a lower federal court. 1853 This is because in cases of this nature the Court formerly felt free to determine questions of fundamental justice for itself. Indeed, in such a case, the Court has apparently in the past regarded itself as free to pass upon the constitutionality of the state law authorizing the bonds even though there has been no prior decision by the highest state court sustaining them, the idea being that contracts entered into simply on the faith of the presumed constitutionality of a state statute are entitled to this protection. 1854
In other words, in cases of which it has jurisdiction because of diversity of citizenship, the Court has held that the obligation of contracts is capable of impairment by subsequent judicial decisions no less than by subsequent statutes and that it is able to prevent such impairment. In cases, on the other hand, of which it obtains jurisdiction only on the constitutional ground and by appeal from a state court, it has always adhered in terms to the doctrine that the word ''laws'' as used in Article I, Sec. 10, does not comprehend judicial decisions. Yet even in these cases, it will intervene to protect contracts entered into on the faith of existing decisions from an impairment that is the direct result of a reversal of such decisions, but there must be in the offing, as it were, a statute of some kind--one possibly many years older than the contract rights involved--on which to pin its decision. 1855
In 1922, Congress, through an amendment to the Judicial Code, endeavored to extend the reviewing power of the Supreme Court to suits involving ''. . . the validity of a contract wherein it is claimed that a change in the rule of law or construction of statutes by the highest court of a State applicable to such contract would be repugnant to the Constitution of the United States. . . .'' This appeared to be an invitation to the Court to say frankly that the obligation of a contract can be impaired as well by a subsequent decision as by a subsequent statute. The Court, however, declined the invitation in an opinion by Chief Justice Taft that reviewed many of the cases covered in the preceding paragraphs.
Dealing with Gelpcke and adherent decisions, Chief Justice Taft said: ''These cases were not writs of error to the Supreme Court of a State. They were appeals or writs of error to federal courts where recovery was sought upon municipal or county bonds or some other form of contracts, the validity of which had been sustained by decisions of the Supreme Court of a State prior to their execution, and had been denied by the same court after their issue or making. In such cases the federal courts exercising jurisdiction between citizens of different States held themselves free to decide what the state law was, and to enforce it as laid down by the state Supreme Court before the contracts were made rather than in later decisions. They did not base this conclusion on Article I, Sec. 10, of the Federal Constitution, but on the state law as they determined it, which, in diverse citizenship cases, under the third Article of the Federal Constitution they were empowered to do. Burgess v. Seligman, 107 U.S. 20 (1883).'' 1856 While doubtless this was an available explanation in 1924, the decision in 1938 in Erie Railroad Co. v. Tompkins, 1857 so cut down the power of the federal courts to decide diversity of citizenship cases according to their own notions of ''general principles of common law'' as to raise the question whether the Court will not be required eventually to put Gelpcke and its companions and descendants squarely on the obligation of contracts clause or else abandon them.
''Obligation'' Defined .--A contract is analyzable into two elements: the agreement, which comes from the parties, and the obligation, which comes from the law and makes the agreement binding on the parties. The concept of obligation is an importation from the Civil Law and its appearance in the contracts clause is supposed to have been due to James Wilson, a graduate of Scottish universities and a Civilian. Actually, the term as used in the contracts clause has been rendered more or less superfluous by the doctrine that the law in force when a contract is made enters into and comprises a part of the contract itself. 1858 Hence, the Court sometimes recognizes the term in its decisions applying the clause, sometimes ignores it. In Sturges v. Crowninshield, 1859 Marshall defined ''obligation of contract'' as ''the law which binds the parties to perform their agreement;'' but a little later the same year he sets forth the points presented for consideration in Dartmouth College v. Woodward, 1860 to be: ''1. Is this contract protected by the Constitution of the United States? 2. Is it impaired by the acts under which the defendant holds?'' 1861 The word ''obligation'' undoubtedly does carry the implication that the Constitution was intended to protect only executory contracts--i.e., contracts still awaiting performance, but this implication was early rejected for a certain class of contracts, with immensely important result for the clause.
''Impair'' Defined .--''The obligations of a contract,'' says Chief Justice Hughes for the Court in Home Building & Loan Assn. v. Blaisdell, 1862 ''are impaired by a law which renders them in valid, or releases or extinguishes them . . ., and impairment . . . has been predicated upon laws which without destroying contracts derogate from substantial contractual rights.'' 1863 But he adds: ''Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worthwhile,--a government which retains adequate authority to secure the peace and good order of society. This principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court.'' 1864 In short, the law from which the obligation stems must be understood to include constitutional law and, moreover a ''progressive'' constitutional law. 1865
Vested Rights Not Included .--The term ''contracts'' is used in the contracts clause in its popular sense of an agreement of minds. The clause therefore does not protect vested rights that are not referable to such an agreement between the State and an individual, such as the right of recovery under a judgment. The individual in question may have a case under the Fourteenth Amendment, but not one under Article I, Sec. 10. 1866
Public Grants That Are Not ''Contracts'' .--Not all grants by a State constitute ''contracts'' within the sense of Article I, Sec. 10. In his Dartmouth College decision, Chief Justice Marshall conceded that ''if the act of incorporation be a grant of political power, if it creates a civil institution, to be employed in the administration of the government . . . the subject is one in which the legislature of the State may act according to its own judgment,'' unrestrained by the Constitution 1867 --thereby drawing a line between ''public'' and ''private'' corporations that remained undisturbed for more than half a century. 1868
It has been subsequently held many times that municipal corporations are mere instrumentalities of the State for the more convenient administration of local governments, whose powers may be enlarged, abridged, or entirely withdrawn at the pleasure of the legislature. 1869 The same principle applies, moreover, to the property rights which the municipality derives either directly or indirectly from the State. This was first held as to the grant of a franchise to a municipality to operate a ferry and has since then been recognized as the universal rule. 1870 It was stated in a case decided in 1923 that the distinction between the municipality as an agent of the State for governmental purposes and as an organization to care for local needs in a private or proprietary capacity, while it limited the legal liability of municipalities for the negligent acts or omissions of its officers or agents, did not, on the other hand, furnish ground for the application of constitutional restraints against the State in favor of its own municipalities. 1871 Thus, no contract rights were impaired by a statute relocating a county seat, even though the former location was by law to be ''permanent'' and the citizens of the community had donated land and furnished bonds for the erection of public buildings. 1872 Similarly, a statute changing the boundaries of a school district, giving to the new district the property within its limits that had belonged to the former district, and requiring the new district to assume the debts of the old district, did not impair the obligation of contracts. 1873 Nor was the contracts clause violated by state legislation authorizing state control over insolvent communities through a Municipal Finance Commission. 1874
On the same ground of public agency, neither appointment nor election to public office creates a contract in the sense of Article I, Sec. 10, whether as to tenure, or salary, or duties, all of which remain, so far as the Constitution of the United States is concerned, subject to legislative modification or outright repeal. 1875 Indeed, there can be no such thing in this country as property in office, although the common law sustained a different view that sometimes found reflection in early cases. 1876 When, however, services have once been rendered, there arises an implied contract that they shall be compensated at the rate in force at the time they were rendered. 1877 Also, an express contract between the State and an individual for the performance of specific services falls within the protection of the Constitution. Thus, a contract made by the governor pursuant to a statute authorizing the appointment of a commissioner to conduct, over a period of years, a geological, mineralogical, and agricultural survey of the State, for which a definite sum had been authorized, was held to have been impaired by repeal of the statute. 1878 But a resolution of a local board of education reducing teachers' salaries for the school year 1933-1934, pursuant to an act of the legislature authorizing such action, was held not to impair the contract of a teacher who, having served three years, was by earlier legislation exempt from having his salary reduced except for inefficiency or misconduct. 1879 Similarly, it was held that an Illinois statute that reduced the annuity payable to retired teachers under an earlier act did not violate the contracts clause, since it had not been the intention of the earlier act to propose a contract but only to put into effect a general policy. 1880 On the other hand, the right of one, who had become a 'permanent teacher'' under the Indiana Teachers Tenure Act of 1927, to continued employment was held to be contractual and to have been impaired by the repeal in 1933 of the earlier act. 1881
Tax Exemptions: When Not ''Contracts'' .--From a different point of view, the Court has sought to distinguish between grants of privileges, whether to individuals or to corporations, which are contracts and those which are mere revocable licenses, although on account of the doctrine of presumed consideration mentioned earlier, this has not always been easy to do. In pursuance of the precedent set in New Jersey v. Wilson, 1882 the legislature of a State ''may exempt particular parcels of property or the property of particular persons or corporations from taxation, either for a specified period or perpetually, or may limit the amount or rate of taxation, to which such property shall be subjected,'' and such an exemption is frequently a contract within the sense of the Constitution. Indeed this is always so when the immunity is conferred upon a corporation by the clear terms of its charter. 1883 When, on the other hand, an immunity of this sort springs from general law, its precise nature is more open to doubt, as a comparison of decisions will serve to illustrate.
In State Bank of Ohio v. Knoop, 1884 a closely divided Court held that a general banking law of Ohio, which provided that companies complying therewith and their stockholders should be exempt from all but certain taxes, was, as to a bank organized under it and its stockholders, a contract within the meaning of Article I, Sec. 10. The provision was not, the Court said, ''a legislative command nor a rule of taxation until changed, but a contract stipulating against any change, from the nature of the language used and the circumstances under which it was adopted.'' 1885 When, however, the State of Michigan pledged itself, by a general legislative act, not to tax any corporation, company, or individual undertaking to manufacture salt in the State from water there obtained by boring on property used for this purpose and, furthermore, to pay a bounty on the salt so manufactured, it was held not to have engaged itself within the constitutional sense. ''General encouragements,'' said the Court, ''held out to all persons indiscriminately, to engage in a particular trade or manufacture, whether such encouragement be in the shape of bounties or drawbacks, or other advantage, are always under the legislative control, and may be discontinued at any time.'' 1886 So far as exemption from taxation is concerned the difference between these two cases is obviously slight, but the later one is unquestionable authority for the proposition that legislative bounties are repealable at will.
Furthermore, exemptions from taxation have in certain cases been treated as gratuities repealable at will, even when conferred by specific legislative enactments. This would seem always to be the case when the beneficiaries were already in existence when the exemption was created and did nothing of a more positive nature to qualify for it than to continue in existence. 1887 Yet the cases are not always easy to explain in relation to each other, except in light of the fact that the Court's point of view has altered from time to time. 1888
''Contracts'' Include Public Contracts and Corporate Charters .-- The question, which was settled very early, was whether the clause was intended to be applied solely in protection of private contracts or in the protection also of public grants, or, more broadly, in protection of public contracts, in short, those to which a State is a party. 1889 Support for the affirmative answer accorded this question could be derived from the following sources. For one thing, the clause departed from the comparable provision in the Northwest Ordinance (1787) in two respects: first, in the presence of the word ''obligation;'' secondly, in the absence of the word ''private.'' There is good reason for believing that Wilson may have been responsible for both alterations, inasmuch as two years earlier he had denounced a current proposal to repeal the Bank of North America's Pennsylvania charter in the following words: ''If the act for incorporating the subscribers to the Bank of North America shall be repealed in this manner, every precedent will be established for repealing, in the same manner, every other legisla tive charter in Pennsylvania. A pretence, as specious as any that can be alleged on this occasion, will never be wanting on any future occasion. Those acts of the state, which have hitherto been considered as the sure anchors of privilege and of property, will become the sport of every varying gust of politicks, and will float wildly backwards and forwards on the irregular and impetuous tides of party and faction.'' 1890
Furthermore, in its first important constitutional case, that of Chisholm v. Georgia, 1891 the Court ruled that its original jurisdiction extended to an action in assumpsit brought by a citizen of South Carolina against the State of Georgia. This construction of the federal judicial power was, to be sure, promptly repealed by the Eleventh Amendment, but without affecting the implication that the contracts protected by the Constitution included public contracts.
One important source of this diversity of opinion is to be found in that ever welling spring of constitutional doctrine in early days, the prevalence of natural law notions and the resulting vague significance of the term ''law.'' In Sturges v. Crowninshield, Marshall defined the obligation of contracts as ''the law which binds the parties to perform their undertaking.'' Whence, however, comes this law? If it comes from the State alone, which Marshall was later to deny even as to private contracts, 1892 then it is hardly possible to hold that the States' own contracts are covered by the clause, which manifestly does not create an obligation for contracts but only protects such obligation as already exists. But, if, on the other hand, the law furnishing the obligation of contracts comprises Natural Law and kindred principles, as well as law which springs from state authority, then, inasmuch as the State itself is presumably bound by such principles, the State's own obligations, so far as harmonious with them, are covered by the clause.
Fletcher v. Peck, 1893 has the double claim to fame in that it was the first case in which the Supreme Court held a state enactment to be in conflict with the Constitution, and also the first case to hold that the contracts clause protected public grants. By an act passed on January 7, 1795, the Georgia Legislature directed the sale to four land companies of public lands comprising most of what are now the States of Alabama and Mississippi. As soon became known, the passage of the measure had been secured by open and wholesale bribery. So when a new legislature took over in the winter of 1795-1796, almost its first act was to revoke the sale made the previous year.
Meantime, however, the land companies had disposed of several millions of acres of their holdings to speculators and prospective settlers, and following the rescinding act some of these took counsel with Alexander Hamilton as to their rights. In an opinion which was undoubtedly known to the Court when it decided Fletcher v. Peck, Hamilton characterized the repeal as contravening ''the first principles of natural justice and social policy,'' especially so far as it was made ''to the prejudice . . . of third persons . . . innocent of the alleged fraud or corruption; . . . moreover,'' he added, ''the Constitution of the United States, article first, section tenth, declares that no State shall pass a law impairing the obligations of contract. This must be equivalent to saying no State shall pass a law revoking, invalidating, or altering a contract. Every grant from one to another, whether the grantor be a State or an individual, is virtually a contract that the grantee shall hold and enjoy the thing granted against the grantor, and his representatives. It, therefore, appears to me that taking the terms of the Constitution in their large sense, and giving them effect according to the general spirit and policy of the provisions, the revocation of the grant by the act of the legislature of Georgia may justly be considered as contrary to the Constitution of the United States, and, therefore null. And that the courts of the United States, in cases within their jurisdiction, will be likely to pronounce it so.'' 1894 In the debate to which the ''Yazoo Land Frauds,'' as they were contemporaneously known, gave rise in Congress, Hamilton's views were quoted frequently.
So far as it invoked the obligation of contracts clause, Marshall's opinion in Fletcher v. Peck performed two creative acts. He recognized that an obligatory contract was one still to be performed--in other words, was an executory contract, also that a grant of land was an executed contract--a conveyance. But, he asserted, every grant is attended by ''an implied contract'' on the part of the grantor not to claim again the thing granted. Thus, grants are brought within the category of contracts having continuing obligation and so within Article I, Sec. 10. But the question still remained of the nature of this obligation. Marshall's answer to this can only be inferred from his statement at the end of his opinion. The State of Georgia, he says, ''was restrained'' from the passing of the rescinding act ''either by general principles which are common to our free institutions, or by particular provisions of the Constitution of the United States.'' 1895
The protection thus thrown about land grants was presently extended, in the case of New Jersey v. Wilson, 1896 to a grant of immunity from taxation that the State of New Jersey had accorded certain Indian lands, and several years after that, in the Dartmouth College case, 1897 to the charter privileges of an eleemosynary corporation.
In City of El Paso v. Simmons, 1898 the Court held, over a vigorous dissent by Justice Black, that Texas had not violated this clause when it amended its laws governing the sale of public lands so as to restrict the previously unlimited right of a delinquent to reinstate himself upon forfeited land by a single payment of all past interest due.
[Footnote 1846] Dodge v. Woolsey, 59 U.S. (18 How.) 331 (1856); Ohio & M. R. Co. v. McClure, 77 U.S. (10 Wall.) 511 (1871); New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650 (1885); Bier v. McGehee, 148 U.S. 137, 140 (1893).
[Footnote 1847] New Orleans Water-Works Co. v. Rivers, 115 U.S. 674 (1885); City of Walla Walla v. Walla Walla Water Co., 172 U.S. 1 (1898); City of Vicksburg v. Waterworks Co., 202 U.S. 453 (1906); Atlantic Coast Line v. City of Goldsboro, 232 U.S. 548 (1914); Cuyahoga Power Co. v. City of Akron, 240 U.S. 462 (1916).
[Footnote 1849] Central Land Company v. Laidley, 159 U.S. 103 (1895). See also N.O. Water-Works Co. v. La. Sugar Co., 125 U.S. 18 (1888); Hanford v. Davies, 163 U.S. 273 (1896); Ross v. Oregon, 227 U.S. 150 (1913); Detroit United Ry. v. Michigan, 242 U.S. 238 (1916); Long Sault Development Co. v. Call, 242, U.S. 272, (1916); McCoy v. Union Elevated R. Co., 247 U.S. 354 (1918); Columbia G. & E. Ry. v. South Carolina, 261 U.S. 236 (1923); Tidal Oil Co. v. Flannagan, 263 U.S. 444 (1924).
[Footnote 1850] Jefferson Branch Bank v. Skelly, 66 U.S. (1 Bl.) 436, 443 (1862); Bridge Proprietors v. Hoboken Co., 68 U.S. (1 Wall.) 116, 145 (1863); Wright v. Nagle, 101 U.S. 791, 793 (1880); McGahey v. Virginia, 135 U.S. 662, 667 (1890); Scott v. McNeal, 154 U.S. 34, 35 (1894); Stearns v. Minnesota, 179 U.S. 223, 232 -233 (1900); Coombes v. Getz, 285 U.S. 434, 441 (1932); Atlantic Coast Line R. Co. v. Phillips, 332 U.S. 168, 170 (1947).
[Footnote 1851] McCullough v. Virginia, 172 U.S. 102 (1898); Houston & Texas Central R. Co. v. Texas, 177 U.S. 66, 76 , 77 (1900); Hubert v. New Orleans, 215 U.S. 170, 175 (1909); Carondelet Canal Co. v. Louisiana, 233 U.S. 362, 376 (1914); Louisiana Ry. & Nav. Co. v. New Orleans, 235 U.S. 164, 171 (1914).
[Footnote 1852] State Bank of Ohio v. Knoop, 57 U.S. (16 How.) 369 (1854), and Ohio Life Insurance and Trust Co. v. Debolt, 57 U.S. (16 How.) 416 (1854) are the leading cases. See also Jefferson Branch Bank v. Skelly, 66 U.S. (1 Bl.) 436 (1862); Louisiana v. Pilsbury, 105 U.S. 278 (1882); McGahey v. Virginia, 135 U.S. 662 (1890); Mobile & Ohio Railroad v. Tennessee, 153 U.S. 486 (1894); Bacon v. Texas, 163 U.S. 207 (1896); McCullough v. Virginia, 172 U.S. 102 (1898).
[Footnote 1853] Gelpcke v. Dubuque, 68 U.S. (1 Wall.) 175, 206 (1865); Havemayer v. Iowa County, 70 U.S. (3 Wall.) 294 (1866); Thomson v. Lee County, 70 U.S. (3 Wall.) 327 (1866); The City v. Lamson, 76 U.S. (9 Wall.) 477 (1870); Olcott v. The Supervisors, 83 U.S. (16 Wall.) 678 (1873); Taylor v. Ypsilanti, 105 U.S. 60 (1882); Anderson v. Santa Anna, 116 U.S. 356 (1886); Wilkes County v. Coler, 180 U.S. 506 (1901).
[Footnote 1861] Id., 627.
[Footnote 1863] Id., 431.
[Footnote 1865] ''The Blaisdell decision represented a realistic appreciation of the fact that ours is an evolving society and that the general words of the contract clause were not intended to reduce the legislative branch of government to helpless impotency.'' Justice Black, in Wood v. Lovett, 313 U.S. 362, 383 (1941).
[Footnote 1866] Crane v. Hahlo, 258 U.S. 142, 145 -146 (1922); Louisiana ex rel. Folsom v. Mayor of New Orleans, 109 U.S. 285, 288 (1883); Morley v. Lake Shore Railway Co., 146 U.S. 162, 169 (1892). That the obligation of contracts clause did not protect vested rights merely as such was stated by the Court as early as Satterlee v. Matthewson, 27 U.S. (2 Pet.) 380, 413 (1829); and again in Charles River Bridge v. Warren Bridge, 36 U.S. (11 Pet.) 420, 539 -540 (1837).
[Footnote 1868] In Munn v. Illinois, 94 U.S. 113 (1877) a category of ''business affected with a public interest'' and whose property is ''impressed with a public use'' was recognized. A corporation engaged in such a business becomes a ''quasi-public'' corporation, the power of the State to regulate which is larger than in the case of a purely private corporation. Inasmuch as most corporations receiving public franchises are of this character, the final result of Munn was to enlarge the police power of the State in the case of the most important beneficiaries of the Dartmouth College decision.
[Footnote 1875] Butler v. Pennsylvania, 51 U.S. (10 How.) 402 (1850); Fisk v. Jefferson Policy Jury, 116 U.S. 131 (1885); Dodge v. Board of Education, 302 U.S. 74 (1937); Mississippi ex rel. Robertson v. Miller, 276 U.S. 174 (1928).
[Footnote 1876] Butler v. Pennsylvania, 51 U.S. (10 How.) 420 (1850). Cf. Marbury v. Madison, 5 U.S. (1 Cr.) 137 (1803); Hoke v. Henderson, 154 N.C. (4 Dev.) 1 (1833). See also United States v. Fisher, 109 U.S. 143 (1883); United States v. Mitchell, 109 U.S. 146 (1883); Crenshaw v. United States, 134 U.S. 99 (1890).
[Footnote 1883] The Delaware Railroad Tax, 85 U.S. (18 Wall.) 206, 225 (1874); Pacific Railroad Company v. Maguire, 87 U.S. (20 Wall.) 36, 43 (1874); Humphrey v. Pegues, 83 U.S. (16 Wall.) 244, 249 (1873); Home of the Friendless v. Rouse, 75 U.S. (8 Wall.) 430, 438 (1869).
[Footnote 1885] Id., 382-383.
[Footnote 1886] Salt Company v. East Saginaw, 80 U.S. (13 Wall.) 373, 379 (1872). See also Welch v. Cook, 97 U.S. 541 (1879); Grand Lodge v. New Orleans, 166 U.S. 143 (1897); Wisconsin & Michigan Ry. Co. v. Powers, 191 U.S. 379 (1903). Cf. Ettor v. Tacoma, 228 U.S. 148 (1913), in which it was held that the repeal of a statute providing for consequential damages caused by changes of grades of streets could not constitutionally affect an already accrued right to compensation.
[Footnote 1888] Compare the above cases with Home of the Friendless v. Rouse, 75 U.S. (8 Wall.) 430, 437 (1869); Illinois Central Railroad v. Decatur, 147 U.S. 190 (1893), with Wisconsin & Michigan Ry. Co. v. Powers, 191 U.S. 379 (1903).
[Footnote 1889] According to Benjamin F. Wright, throughout the first century of government under the Constitution ''the contract clause had been considered in almost forty per cent of all cases involving the validity of State legislation,'' and of these the vast proportion involved legislative grants of one type or other, the most important category being charters of incorporation. However, the numerical prominence of such grants in the cases does not overrate their relative importance from the point of view of public interest. B. Wright, The Contract Clause of the Constitution, (Boston: 1938), 95.
[Footnote 1894] B. Wright, The Contract Clause of the Constitution (Boston: 1938), 22. Professor Wright dates Hamilton's pamphlet, 1796.
[Footnote 1895] 10 U.S. (6 Cr.) 87, 139 (1810). Justice Johnson, in his concurring opinion, relied exclusively on general principles. ''I do not hesitate to declare, that a State does not possess the power of revoking its own grants. But I do it, on a general principle, on the reason and nature of things; a principle which will impose laws even on the Deity.'' Id., 143.
[Footnote 1896] 11 U.S. (7 Cr.) 164 (1812). The exemption from taxation which was involved in this case was held in 1886 to have lapsed through the acquiescence for sixty years by the owners of the lands in the imposition of taxes upon these. Given v. Wright, 117 U.S. 648 (1886).