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After finally agreeing on many issues to form a central platform, the Fathers inked their ideas into articles that were to be the very foundation of not only the Constitution, but America as well. The dead men who ratified this Constitution felt that not only should it be a supreme legal document whose laws would be of the highest authority, but also more importantly, the words of the Constitution should be able to withstand the advent of time. What the Fathers did not foresee, and therefore did not ink, was that as time changes, so do the interests of society. The country we live in today far differs from the life of eighteenth-century America. Because of this slow, yet radical and drastic change, some of the words of the Constitution are being challenge by its citizens because the Articles and Amendments are either too vague or do not really conform to today’s environment. One of the clauses that has been frequently attacked in the Supreme Court is the so-called contract clause. In Section 10 of Article I, the Constitution states, “No State shall…pass any Law impairing the Obligation of Contracts.” In layman’s terms, a state’s legislature has no power to pass any law that would affect contracts. The initial problem of the contract clause the Supreme Court had to face was that they had to define what contracts – private, public, or both- were to be protected by the Constitution, but as the interests and health of citizens began to shift, the Justices’ definition and the words of the contract clause had to be bent and reinterpreted to better serve the public. Although the Court dealt with many cases involving the above clause, from Fletcher v. Peck to People v. Marx, I feel that for the sake of this essay, a comparison should be made between Trustees v. Dartmouth and Home Building and Loan Association v. Blaisdell because the Court’s decisions in both cases lie at opposite ends of a spectrum. The contrasting decisions also display the Court’s declining dependency on the exact words of the contract clause. In 1769, Dartmouth College was chartered by the English Crown, which authorized a twelve-member board of trustees to run the college and for them to appoint their successors. However, in 1816, the state legislature of New Hampshire passed a law completely reorganizing the government of the college and changing the name to Dartmouth University. The new state legislature increased the size of the board of trustees to twenty-one, established a board of overseers, and gave the governor the power to appoint new trustees and overseers. The old trustees of the college challenged the validity of the new law and sued William Woodward, the treasurer, to recover corporate property that was entrusted to him under the new legislation. When the matter was brought to the State court, they upheld the legislation. The incumbent trustees then brought the case to the Supreme Court. In deciding the matter, the Supreme Court’s first issue they had to contend with was that if the original charter was indeed a contract, was it a contract protected by the Constitution of the United States? The Court found that the original charter was a contract because its purpose was for the security and disposition of property and because of these reasons, it was a contract within the letter of the Constitution. After finding the English Charter to be a contract, the second question the Court had to answer was: does the act of 1816 impair the original charter? The Court decided that the act of 1816 gave the college a new status, increased the number of trustees, and therefore in essence impaired the original contract of the college. The New Hampshire legislature was found to violate the Constitution and the act was void. In delivering the opinion of the Court, Chief Justice Marshall states: Neither the founders of the college nor the youth for whose benefit it was founded, complain of the alteration made in its charter, or think themselves injured by it…It is not enough to say that this particular case was not in the mind of the convention when the article was framed, nor of the American people when it was adopted…had this case been suggested, the language would have been so varied…the case being within the words of the rule, must be in operation likewise. (Vol. II: Constitutional Law and Politics, pg. 229-230) Although the college could have benefited from the new legislation, Chief Justice Marshall felt that since the old charter was protected by the contract clause of the Constitution, the state itself could not change the words of the charter. It can be easily seen that Supreme Court of the Marshall era literally used the words of the Constitution to decide their cases, but over the next decades, their dependence on the contract clause would decline. One hundred and fifteen years after the Marshall Court expansively read the contract clause to protect the interests in a corporate charter granted by the English Crown, the state of Minnesota passed the Minnesota Moratorium Act of 1934. In response to the social pressures arising from the Great Depression in the 1930’s, the state legislature provided that one who is unable to pay or retire a mortgage at the date of redemption can be granted a moratorium to prevent the foreclosures of homeowners and farmers. Under the new legislation, John Blaisdell sought an extension of time on the payment of his mortgage to Home Building and Loan Association and was awarded the extension by the state court of Minnesota. Soon after, the Association appealed to the Supreme Court because they felt that the moratorium violated the constitutionality of their contract. When the case was handed to the Supreme Court, the Court immediately acknowledged the fact that the mortgage itself was a contract that was to be protected by the Constitution. The Court also concluded that although Minnesota’s moratorium act may have altered the contract somewhat, it did not violate its constitutionality for numerous reasons. Before the Court announced their decision, they found it to be imperative to discuss the matter as to why Minnesota’s legislature enacted the moratorium law. In Chief Justice Hughes’ opinion for the court, he states: While emergency does not create power, emergency may furnish the occasion for the exercise of power…the constitutional question presented in the light of an emergency is whether the power possessed embraces the particular exercise of it in response to particular conditions. Thus, the war power of the Federal Government is not created by the emergency of war, but it is a power given to meet that emergency. (Vol. II: Constitutional Law and Politics, pg. 241) Chief Justice Hughes believed that the words in the Constitution were written to prevent the government, both state and federal, from invading the rights of its citizens, but there comes a time, the Great Depression in this case, when the government must enact laws for the whole of society, even if it means to interfere directly with public and private sectors of the community. After debating the importance of Minnesota’s moratorium act in context with the present situation, the Court concluded that the state legislature properly used its “reserved power of the State to protect the vital interests of the community” and that “the legislation was not for the mere advantage of particular individuals but for the protection of a basic interest of society” (244). The decision of the Hughes Court of the mid 20th century was a large contrast to the Marshallian era of the early 1800s. In comparing the two cases with one another, the similarities are easily apparent and numerous. Both the Marshall Court and the Hughes Court dealt with the contract clause being violated by new laws that were passed by state legislatures. Both courts knew the state laws were altering the contracts that were in question, but it was the distinct ideologies of each court that caused the difference of the outcomes in the two cases. In the Court that decided against the New Hampshire legislature, it brought the Marshallian view of separating the private and public, with more favoritism towards the private sector. The Marshallian ideology also heavily depended on the words of the Constitution and felt that if there were any exceptions, it would have been written by the Founding Fathers. Over a hundred years later, the Hughes Court would represent something different compared to the Marshall Court. The Hughes Court would usher in the idea of legal realism and political fairness. They believed that the private and public sectors of society were not necessarily distinct and that a state can sometimes interfere if they act rationally and conceive a legitimate end. If the two courts switched cases, the twelve trustees at Dartmouth would be sitting with nine new coworkers and John Blaisdell would be found homeless because not only did the Courts differ in opinion, but also because of the new time period they would be in. The Court’s reliance and enforcement of the contract clause diminished in the late nineteenth and twentieth centuries because when the Constitution was finally ratified, the government emphasized the contract clause during the late 1700’s so that the states would not impede the growth of young businesses. This protection from state control helped the nation in its formative years and was business’s leading defense against legislative interference. In the 1900’s, with the occurrence of the Great Depression, Congress responded to the social and economic pressure and the Court began to move towards the power of state legislation to accommodate the health of its citizens. The narrow decision of Blaisdell became a sign of how the Supreme Court changed its stance in relation to the Constitution and its ever-changing society. Bibliography: Word Count: 1681
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