Henry Austin v. Edmund Andrews, Administrator, 1 Dallam 447

BAYLOK, Justice. In this case the appellant, Austin, obtained an injunction enjoining an execution sued out against his property on a twelve months’ bond, as it is commonly called. On a motion to dissolve the injunction for want of equity, the facts agreed on by the counsel of the parties are as follows: “The original judgment in the court below of Andrews, administrator, etc., v. Austin, was founded on a note bearing date the 24th of November, A.

D. 1836, and it was admitted at that time, and also at the maturity of the note, there could be no forced sale by a creditor of the property of his debtor for less than two-thirds of its appraised valuation.

The property of Austin was levied on and offered for sale, but not selling for two-thirds of its valuation, it was sold on a credit of twelve months, under the act of Congress of January 26, 1839, and was bought in by Austin’s agent; bond was given pursuant to the act of Congress above mentioned; at the maturity of the twelve months’ bond, the money not being paid, execution was sued out on it, and an injunction was obtained enjoining this execution. “The district judge sustained the motion to dissolve the injunction, and decreed that the complainant, Austin, should ,pay the costs,” etc.

From this decree Austin appealed, and assigns for error: 1. That the law in force at the time the contract was made, as to its enforcement, constituted the obligation of the contract. 2. That at the time this contract was entered into, the maker of the note was bound to pay the money or to let his property be sold under execution for the amount, provided that it should not be sold for less than two-thirds of its appraised value. 3. The act of Congress directing a sale on a credit of twelve months ought not to be construed to have a retrospective action, so as to embrace prior contracts.

The only question presented for our consideration by the assignment of errors we think may be narrowed down to a single point—and that is, how far does the law which was in force at the time the contract was made and fell due, as to its enforcement, constitute the obligation of the contract? It may be well to observe, before we proceed to dispose of this question, that the note sued on was executed and became due after the adoption of the Constitution. This consideration will enable us to decide this matter with all the light thrown on it by the adjudications of the courts in the United States.

The clause contained in our Constitution which prohibits Congress from passing any law impairing the obligation of contracts is also found in the Constitution of the mother country; and it may be added there is not a single clause of the Constitution of that country which has given rise to more acute and vehement controversy, and the nature and extent of whose prohibitory force has called forth more ingenious speculation and more animated juridical discussion. What is a contract ? What is the obligation of a contract ? What is impairing a contract? To what classes of laws does the prohibition apply?

These and many other questions of no small nicety and intricacy have vexed the legislative halls as well as the judicial tribunals of that country with an uncounted variety and frequency of litigation and speculation. The learned judge, Mr.

Justice Story, from whom many of the foregoing observations are taken, in his commentaries upon these various questions, remarks as to the impairing of the obligation of contracts: “Although there is,” says he, “a distinction between the obligation of a contract and a remedy upon it, yet if there are certain remedies existing at the time when it is made, all of which are extinguished by new laws, -so that there remain no means of enforcing its obligation and no redress, such an abolition of all remedies, operating in presentí, is also an impairing of the obligation of such contract.

But every change or modification of the remedy does not involve such a consequence. No one will doubt that the Legislature may vary the nature and extent of remedies, so always that some substantive remedy be in fact left. Nor can it be doubted that the Legislature may prescribe the time and modes in which remedies may be pursued. The obligation to perform a contract is coeval with the undertaking to perform it. It originates with the contract itself and operates anterior to the time of performance.

The remedy acts upon the broken contract and enforces a pre-existing obligation, and a State Legislature may discharge a party from imprisonment upon a judgment in a civil case of contract, without impairing the Constitution; for this is but a modification of the remedy, and does not impair the obligation of the contract.” If these principles be correct, of which we have no doubt, they are decisive of the point under consideration. The Act of January 26, 1839, operated only as a modification, or change of the remedy, and this it was competent for Congress to do.

The complaint, however, in this instance comes from the debtor, Austin; but we see no good reason why the principles here established should not embrace the debtor as well as the creditor. The act of Congress of 1839 was, as to him, but a modification or change of the remedy upon his broken contract, which we have already said was competent for that body to do. This evil, if indeed it be one, he might easily have averted by the payment of a just debt. It is therefore ordered, adjudged and decreed, that the judgment of the district court be affirmed with costs.