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Thus also, as proper police measures, the States are permitted to impose special restrictions and liabilities upon railway corporations. Special modifications of the common-law doctrine of employers' liability with reference to them have been upheld, as have laws placing the presumption of negligence upon them when cattle have been killed by their trains, and laws making them responsible for fires kindled by sparks from their locomotives, though they may have taken every possible precaution to avoid such fires, 15

However, in Gulf, etc., Ry. Co. v. Ellis16 a State law was held void which imposed an attorney's fee in addition to costs upon railway companies which should fail to pay certain claims within a certain time after presentation. Here the court held that there was no reasonable relation between the burden imposed and the peculiar character of the business done.

In Missouri v. Lewis 17 the important principle was laid down that the equal protection clause of the Fourteenth Amendment does not prevent the application by a State of different laws and different systems of judicature, to its various local subdivisions.

Equal protection requires similar but not the same privileges Where similar or substantially similar conveniences and

15 St. Louis, etc., Co. v. Mathews, 165 U. S. 1; 17 Sup. Ct. Rep. 243; 41 L. ed. 611; Mo. Pacific Ry. Co. v. Mackey, 127 U. S. 205; 8 Sup. Ct. Rep. 1161; 32 L. ed. 107.

16 165 U. S. 150; 17 Sup. Ct. Rep. 255; 41 L. ed. 666. See, also, Connolly v. Union Sewer Pipe Co., 184 U. S. 540; 22 Sup. Ct. Rep. 431; 46 L. ed. 679; Magoun v. Illinois T. & S. Bank, 170 U. S. 283; 18 Sup. Ct. Rep. 594; 42 L. ed. 1037. As to classifications of property for purposes of taxation, see Bell's Gap, etc., v. Pennsylvania, 134 U. S. 232; 10 Sup. Ct. Rep. 533; 33 L. ed. 892; Plumber v. Coler, 178 U. S. 115; 20 Sup. Ct. Rep. 829; 44 L. ed. 998.

17 101 U. S. 22; 25 L. ed. 989.

comforts are offered, transportation companies, inns, theatres, and other public service companies may by law be permitted or required to provide separate accommodations to the different races, colored, Mongolian or white.

In Plessy v. Ferguson 18 the court say: "The object of the Amendment was undoubtedly to enforce the absolute equality of the two races before the law; and in the nature of things it could not have been intended to abolish distinctions based on color, or to enforce social, as distinguished from political equality, or a commingling of the two races upon terms unsatisfactory to either. Laws permitting, or even requiring their separation where they are liable to be brought into contact, do not necessarily imply the inferiority of either race to the other, and have been generally, if not universally, recognized as within the competency of State legislatures in the exercise of their police powers. The most common instance of this is connected with the establishment of separate schools for white and colored children, which has been held to be a valid exercise of the police power; even by courts of States where the political rights of the colored race have been longest and most earnestly enforced."

18 163 U. S. 537; 16 Sup. Ct. Rep. 1138; 41 L. ed. 256.

CHAPTER XXXVIII

THE OBLIGATION OF CONTRACTS

The obligation of contract clause

In addition to being prohibited by the Fourteenth Amendment from depriving any person of life, liberty or property, without due process of law, the States are, by § X, Art. I of the Constitution, expressly denied the power to pass any law impairing the obligation of contracts. This provision, the general intent of which is sufficiently plain, has in its application given rise to a multitude of cases requiring adjudication in the courts. The purpose of this treatise will not require us, however, to examine these cases in detail. Elsewhere in this treatise, certain specific applications of the prohibition are considered. In this chapter the aim will be, as it was the aim in the chapter dealing with due process of law, to ascertain the broad and underlying principles which have governed the Federal courts in the enforcement of the prohibition.

As has been already seen, the due process of law clause of the Fourteenth Amendment protects the individual in his right to enter into contracts not contrary to public policy. The provision under consideration protects from impairment the obligation of the contract when entered into.

So far as this provision is concerned, a State law divesting vested rights is not invalid, unless these rights are

1 Chapter XLV, Suits Against the States.

founded upon contracts, and the effect of the law is thus to impair or nullify their force.2

The obligation of a contract is not impaired by a law which changes the legal or equitable means for its enforcement, existing at the time it was entered into, provided an adequate though not so convenient a remedy is retained. or substituted therefor. The principle in this effect is thus similar to that discussed in connection with the due process of law clause.

Laws which operate to remedy or cure technical defects so as to give validity to otherwise invalid contracts are constitutional, their effect being to confirm rather than to impair the obligation of contracts.3

Elsewhere in this treatise it is pointed out that, to a certain extent, the States' right of taxation may, in return for a substantial consideration, be parted with. When thus parted with, the undertaking not to exercise the right in the manner specified constitutes a contract, the obligation of which is impaired by a subsequent law authorizing its exercise. The clause thus operates as a limitation upon the taxing power of the States. As to the police power of the State, as will be presently shown, the rule is otherwise. No State, it has been held, may validly contract not to exercise in the future a power which is necessary to the health, safety, comfort or morality of its citizens.

The contracts, the obligation of which is secured from impairment by the States, include agreements between the States and between a State and an individual or individuals, as well as those between individuals. In other words, the State when contracting does so upon the same terms as a private individual or corporation, and may not plead

2 Satterlee v. Matthewson, 2 Pet. 380; 7 L. ed. 458; Bronson v. Kinzie, 1 How. 311; 11 L. ed. 143.

3 Watson v. Mercer, 8 Pet. 88; 8 L. ed. 876.

its sovereignty as justifying subsequent action upon its part impairing the contractual obligations which it has assumed. Its non-amenability to suit may, however, enable a State to avoid the performance of an agreement which it has undertaken to perform. This branch of the subject is more fully discussed in the chapter of this treatise dealing with the suability of the State.

What constitutes a contract

Election or appointment to a public office does not create a contract between the State and the one so appointed.a Marriage, though in some respects properly describable as a contract, is not a contract in the sense that its obligation is protected from impairment by the State.5

A license granted by a State, or by one of its political sub-divisions, is not a contract within the meaning of the prohibition. It is nothing more than the grant of a privilege which, so far as the Federal prohibition regarding the impairment of the obligation of contracts is concerned, may be revoked at any time at the will of the grantor, or its continued enjoyment made dependent upon new and more onerous conditions. This principle is so well settled that a citation of authorities is scarcely needed. The only difficulty lies in determining in specific cases whether the grant of authority by the State is in the nature of a license or of a franchise, which is to be construed as a contract. However, the presumption is always against the existence of a contract. "A contract binding the State is only created by clear language and not to be extended by implication beyond the terms of the statute." 6

Generally speaking, the right of a foreign corporation

4 Butler v. Pennsylvania, 10 How. 402; 13 L. ed. 472.

5 Maynard v. Hill, 125 U. S. 190; 8 Sup. Ct. Rep. 723; 31 L. ed. 654. 6 Williams v. Wingo, 177 U. S. 601; 20 Sup. Ct. Rep. 793; 44 L. ed.

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