Sturges v. Crowninshield 4 Wheaton 122 (1819)

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STURGES v. CROWNINSHIELD 4 Wheaton 122 (1819)

This was the first of the very rare contract clause cases decided by the Supreme Court involving private executory contracts. The case arose during a depression, when many states had enacted bankruptcy or insolvency statutes. Chief Justice john marshall, for a unanimous Court, agreed that the states possessed a concurrent power to enact such statutes in the absence of the exercise by Congress of its power to establish uniform bankruptcy laws but held that New York's act violated the contract clause. Crowninshield had declared his bankruptcy under that state's act to protect himself from paying a debt contracted before its passing. The doctrine of the case is that a state act cannot operate retroactively on previously existing contracts; a statute that relieves the debtor from imprisonment is valid but not one that cancels the obligation of his contract. The case left uncertain the constitutionality of bankruptcy acts that operate prospectively on contracts formed after their enactment.

(See ogden v. saunders.)

Leonard W. Levy