ment. In W. U. T. Co. v. Pendleton,' the question was as to the validity of a statute of Indiana, which undertook to regulate the delivery in other states of messages transmitted from places in the state of Indiana, by requiring under certain conditions a delivery of the messages to the person addressed by special messenger, and the court held the statute void as an interstate regulation of commerce, so far as regarded its intended extra-territorial effect. It may, therefore, be regarded as settled, that the trasmission of messages by telegraph is, within the meaning of the Constitution,"commerce;" and that as interstate commerce, it is subject to congressional regulation and exempt from state control or interference.

56. The Indian tribes are not foreign, but domestic and dependent nations; their relation to the United States resembles that of a ward to his guardian; and they are completely under the sovereignty and dominion. of the United States. They, therefore, cannot sue in the courts of the United States as foreign states. The reg

1 122 U. S. 347.

2 Waite, C. J., said in Telegraph Co. v. Texas, 105 U. S. 460, 464, "a telegraph company occupies the same relation to commerce as a carrier of messages, that a railroad company does as a carrier of goods. Both companies are instruments of commerce, and their business is commerce itself. They do their transpor ation in different ways, and their liabilities are in some respects different, but they are both indispensable to those engaged to any considerable extent in commercial pursuits." In W. U. T. Co. v. Pendleton, 122 U. S. 356, Field, J., said, “although intercourse by telegraphic messages between the states is thus held to be interstate commerce, it differs in material particulars from that portion of commerce with foreign countries and between the states which consists in the carriage of persons and the transportation and exchange of commodities. . . . . It differs not only in the subjects which it transmits, but in the means of transmission. Other commerce deals only with persons, or with visible and tangible things. But the telegraph transports nothing visible and tangible; it carries only ideas, wishes, orders, and intelligence. Other commerce requires the constant attention and supervision of the carrier for the safety of the persons and property carried. The message of the telegraph passes at once beyond the control of the sender, and reaches the office to which it is sent instantaneously."

3 Cherokee Nation v. Georgia, 5 Pet. 1; Worcester v. Same, 6 id. 515.

ulation of the relation between the several states and the Indian tribes is exclusively vested in the United States, and state laws cannot operate within an Indian reservation.1 Congress, under the power to regulate commerce with the Indian tribes, may constitutionally forbid the sale of spirituous liquors to all persons belonging to Indian tribes within the territorial limits of a state, even outside the bounds of an Indian reservation, and it is competent for the United States, in the exercise of the treaty-making power, to stipulate in a treaty with an Indian tribe, that the introduction and sale of spirituous liquors shall be prohibited within certain territories ceded by the tribe to the United States, and such stipulation operates proprio vigore, and is binding though the ceded territory be within the limits of an organized county of one of the United States.3

1 Worcester v. Georgia, 6 Pet. 515.

2 United States v. Holliday; Same v. Haas, 3 Wall. 407.

3 U. S. v. 43 gallons of whisky, 93 U. S. 188. As to the term "Indian country," see Ex parte Crow Dog, 109 U. S. 556; U. S. v. Le Bois, 121 id. 278. The subject of the exercise by the states of their powers of taxation, and of police regulation, as affecting commerce, is more fully treated in other chapters of this book.

CHAPTER V.

THE IMPAIRMENT OF THE OBLIGATION OF CONTRACTS.

57. The prohibition affects only laws passed by states.

58. The term "law" defined.

59. Judgments of state courts not conclusive either as to the non-existence, or non impairment, of contracts.

60. The obligation of a contract defined.

61. Legislation as to remedies.

62. The term "contracts" defined.

63. State insolvent laws.

64. Judgments as contracts.

65. Municipal taxation.

66. History of the prohibition.

67. State grants.

68. Express contracts of exemption from taxation.

69. Express grants of peculiar privileges.

70. Contracts between a state and its political subdivisions.

71. Implied contracts in charters of incorporation.

72. Implied corporate exemption from taxation.

73. Implied grants of peculiar privileges.

74. Implied exemption from the operation of the police power.

75. Implied contracts as to matters of public concern.

76. The withdrawal by a state of its consent to be sued.

77. The force and effect of the prohibition as construed by the Supreme Court.

57. Section 10 of article I of the Constitution declares that "no state shall . . pass any . . . law impairing the obligation of contracts." This prohibition does not in terms affect the exercise of legislative power by the government of the United States, and not only is there not in the Constitution any similar prohibition with regard to the United States, but by the grant of power to Congress, "to establish. uniform laws on the subject of bankruptcies throughout the United

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States," 1 authority is expressly conferred to impair the obligation of contracts between debtors and creditors; 2 and under the doctrine of the implied powers, as construed by the court, Congress may impair the obligation of contracts by authorizing the issue of notes which shall be a legal tender in satisfaction of antecedently contracted debts. The constitutional prohibition is likewise inoperative with regard to the acts of any political organization, which at the time of the adoption of the act in question, is not one of the United States; thus, the Constitution having, under the resolution of the Convention of 1787 and the Act of Congress of February, 1788, gone into effect on the first Wednesday of March, 1789, a statute enacted by the state of Virginia in 1788 was not affected by the constitutional prohibition. So, also, a statute enacted by the republic of Texas before its admission into the United States as the state of Texas could not be held to be void for repugnancy to this clause of the Constitution.5

58. The prohibition of the passage by a state of any "law impairing the obligation of contracts." would, if strictly construed, include under the word "law" only statutes enacted by state legislatures, but it has been determined that the word "law" comprehends, in addition to acts of legislation, state constitutions and constitutional amendments; judicial decisions of state

1 Article I, Section 9.

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2 Sturges v. Crowninshield, 4 Wheat. 122, 194.

3 Supra, Chapter II.

* Owings &. Speed. 5 Wheat. 420.

5 League v. De Young, 11 How. 185, 203. See also Scott v. Jones, 5 How. 343, 378.

6 O. & M. R. R v. McClure, 10 Wall. 511; White v. Hart, 13 id. 646 ; Osborn v. Nicholson, ibid. 654; Gunn v. Barry, 15 id. 610; County of Moultrie v. Rockingham T. C. S. Bank, 92 U. S. 631; Edward v. Kerzey, 96 id. 595; Keith v. Clark, 97 id. 454; N. O. Gas Co. v. Louisiana Light Co., 115 id. 650; Fisk v. Jefferson Police Jury, 116 id. 631.

courts of last resort, rendered subsequently to the making of the contract in question, and antecedently to the suit in which the court determines the invalidity of the contract, and altering by construction the Constitution and statutes of the state in force when the contract was made; and, in general, any act or order, from whatever source emanating, to which a state, by its enforcement thereof, gives the force of a law; as, for instance, a statute enacted by the congress of the Confe leracy and enforced during the war of the rebellion by a court of a state within the insurgent lines.2 Obviously the law, which is alleged to have impaired the obligation of the contract must have been enacted subsequently to the making of the contract, for a law enacted antecedently to the making of the contract can be said to have entered into, and become part of, the contract. The judgment of the state court in the cause, determining the particular contract to be invalid, cannot be said to be a law impairing the obligation of the contract, for otherwise the federal court of last resort would be called upon to "re-examine the judgments of the state courts in every case involving the enforcement of contracts." As Harlan, J., said in Lehigh Water

3

1 Gelpcke v. Dubuque, 1 Wall. 175; Olcott v The Supervisors, ibid. 678; Chicago v. Sheldon, 9 id. 50; The City v. Lamson, ibid. 477; Douglass v. The County of Pike, 101 U. S. 677; County of Rolls v. Douglass, 105 id. 728; Havemeyer v. Iowa County, 3 Wall. 29. This doctrine was first suggested by Taney, C. J., who said in Ohio L. I. & T. Co. v. Debolt, 16 How. 432, “the sound and true rule is, that if the contract when made was valid by the laws of the state, as then expounded by all the departments of its government and administered in its courts of justice, its validity and obligation cannot be impaired by any subsequent act of the legislature of the state. or decision of its courts, altering the construction of the law;" and in Gelpcke v. Dubuque, 1 Wall. 206, Swayne, J, quoted the dictum of Taney, C. J., and declared it to be "the law of this court."

2 Williams v. Bruffy, 96 U. S. 176; Stevens v. Griffith, 111 U. S. 48; Ford v. Surget, 97 U. S. 594.

3 L. W Co. v. Easton, 121 U. S. 388, 391.

REFSERARY

UNIVERSITY

CALIFORNIA