Opinion
June Term, 1842
W. H. Rogers, Ridgely and Gilpin, for plaintiffs.
Frame, (with whom was J. M. Clayton,) for defendants.
QUESTIONS reserved by the Superior Court for hearing before all the judges, on a case stated.
The first of these suits was an action of debt brought under Sec. 1, of the "Act concerning lotteries," (9 Del. Laws, 425,) to recover for the benefit of the school fund, the sum of ten dollars for each drawing of a lottery by the defendants; and the second suit was by the managers of the Georgetown lottery to recover fifty dollars for each drawing, under the second section of said law.
The case agreed referred to the Georgetown lottery act, (7 Del. Laws, 131,) authorizing the plaintiffs in the second suit to raise $10,000, clear of all charges and expenses by lottery, and stated a sale by them of the lottery privileges granted by that act to defendants in consideration of $1, and of the further sum of $10,000, to be paid in ten equal semi-annual instalments; that defendants had paid $6,000; that they gave bond as required by the law; that defendants have drawn said lottery in sundry classes, before and since the act of 1841, and have neglected and refused to pay the sum of $10, required to be paid by the first section of said act on the said classes drawn since the passing of said act; or the sum of $50, required to be paid by the second section of said act.
The question reserved in both cases was, whether the act of 1841 is contrary and repugnant to the constitution of the United States, as impairing the obligation of a contract: and, in the first case, whether the said act is contrary and repugnant to the constitution of the State of Delaware.
The contract between the managers and defendants was dated 14th January, 1839. It recited the act of 18.27, and in consideration of one dollar paid, and for the further consideration of $10,000 to be paid in ten equal semi-annual payments at specified times, granted, sold, assigned, c., to defendants the said lottery, for the term of five years from the 1st of March, 1839, "and all the power, right and authority, given and granted by the said recited act of assembly to us as managers;" and it provided that "if James Phalen and Daniel Paine or their assigns, should be prevented by judicial or legislative interference from drawing said lottery in the State of Delaware, during the said term of five years, then this contract, if they so elect, to be void and of no effect, otherwise to remain in fall force and virtue."
(Extract from the act of 1827, 7 Del. Laws 131.)
"Sec. 1. It shall be lawful to institute, carry on and draw a lottery, in one or more classes, for the purpose of raising, clear of all charges and expenses, ten thousand dollars, to be paid to the managers hereafter named, or to the majority of them or the survivors of them, or a majority of the survivors, or any other person whom they shall appoint to receive the same, to be applied by such managers to the building an academy and masonic hall in the town aforesaid, and the balance, if any, to the finishing St. Paul's Episcopal church in said town.
Sec. 2. That Jehu Stockley, Thomas Robinson, sen'r., and Philip Short, Esquires, he and are hereby appointed managers of said lottery; and they, or a majority of them, or the survivors of them, or a majority of the survivors, shall have power and authority to conduct and draw said lottery, and the different classes thereof, to devise and determine the scheme thereof, to appoint any agent or agents for the sale of tickets or otherwise, and to do all acts requisite for effecting the premises.
Sec. 3. That the managers aforesaid, or a majority of them, or the survivors of them, or a majority of the survivors, shall have power and authority to sell or dispose of said lottery, or any class or classes thereof: and the person or persons to whom any such sale or disposal shall be made, may exercise in relation to the said lottery, or the class or classes thereof so sold or disposed of, the power and authority herein-before conferred."
(Extract from the act of 1841, 9 Del. Laws 425-6.)
"Whereas, the drawing of lotteries now under contract, and authorized by acts of the legislature of this State, cannot at present be prohibited, but may be, and it is expedient should be, regulated:
Sec. 1. Be it enacted, c., That from and after the fifteenth day of March next, the contractor or contractors for any lottery authorized by any law of this State, or drawn within this State, whether acting as manager or managers, or as agent or agents for any manager or managers, shall immediately upon the drawing of each and every scheme or class of such lottery, or within ten days thereafter, pay the sum of ten dollars, for each and every scheme or class so drawn, to the trustee of the school fund, to be applied to and for the benefit of "The fund for establishing schools in the State of Delaware." "And in case of the neglect or refusal of such contractor or contractors, to make such payment or payments as aforesaid, it shall be the duty of the trustee of the school fund, and he is hereby authorized and required, to recover the same, by an action of debt to be instituted in the name of the State, either before some justice of the peace of the county where such drawing shall have been made, or before the Superior Court; and in such action, full costs of suit shall be recovered; any law to the contrary notwithstanding. And such contractor or contractors so neglecting or refusing, are hereby prohibited from setting up or drawing thereafter any further or other scheme or class of such lottery as aforesaid, under a fine of five hundred dollars, for each scheme or class drawn contrary to this prohibition; to be recovered, c."
"Sec. 2. And be it enacted, That from and after the fifteenth day of March next, the contractor or contractors for any lottery authorized by any law of this State, whether acting as manager or managers, or as agent or agents for any manager or managers, shall, immediately upon the drawing of each and every scheme or class of such lottery, or within ten days thereafter pay, clear of all commismissions, costs, charges and expenses whatsoever, the sum of fifty dollars, on each and every scheme or class so drawn, to the person or persons authorized to receive the fund to be raised by such lottery; and shall be applied by such person or persons towards payment of the sum to be raised by such lottery, and to the sum or sums stipulated to be paid by such contractor or contractors."
Rogers and Ridgely, for the State, contended that the law of 1841 was constitutional. The State has an unlimited power of taxation over the persons and property within its jurisdiction, except where it is restrained by the constitution of the United States, or its own constitution. The power in reference to this matter is not interfered with by the constitution of the United States, nor by the constitution of Delaware, unless by Sec. 14, Art. 1. Const. Del. (8 Del. Laws, p. 8,) which directs that no matter or clause whatever, not immediately relating to and necessary for raising revenue, shall be in any manner blended with or annexed to a bill for raising revenue. This has reference more to the mode of exercising the taxing power than to the power itself. The objection is, that this is a bill for raising revenue, and that matters are blended with it not relating to that subject. If this be a revenue bill because money is raised by it, then it is exclusively a revenue bill, and there is no other matter mixed with it. In this respect, all lottery grants are bills for raising money either for the State or for objects of the State's bounty. If such acts are to be regarded as revenue bills, the principle must apply to many other laws; such as the act imposing duties on retailers of foreign goods, wares and merchandise; and the law requiring pedlars to take out licenses. The criminal code itself raises money for the State in the shape of fines and forfeitures. The act imposing a tax on commissions of civil officers; all charters of banking companies, railroads, c., raise revenue incidentally, without being revenue bills in the constitutional meaning of that term. (4 Peters' Rep. 514; 3 Peters' Dig. 620.) In all these cases if the fact that money is raised for the State, or a tax laid by the State, makes them revenue bills, they are unconstitutional and void, for mingling other matters not immediately relating to or necessary for raising revenue.
Does the act of 1841 violate the constitution of the United States (10 Sec. 1 Art.,) by impairing the obligation of a contract?
A contract implies mutual obligation. It transfers some right and raises some duty. This act raises no contract between the State and managers. It is a grant, without any consideration, of the bounty of the State to a particular object; and these persons are selected as the agents of the State to perform a certain service. They acquire no individual interest from the law, and there can be no contract between the State and them. There is perhaps an executory contract without consideration between the State and the beneficiaries (the Masonic hall and the church;) but the question now is between the State and its agents, or those who stand in the same condition, and not between the State and the object of its bounty. The act authorizes these agents to sell the lottery privileges, and this, if it stood alone, might be claimed to be an authority to make a contract for the State with the purchasers of the lottery. But the act goes on to define the rights and powers of the purchasers within the same limits as those of the lottery managers themselves. A lottery grant is not a contract between the State and the grantees or managers, but a mere delegation of a part of the political power of the State, to be used by the managers as the agents of the State, and who are responsible to the State. Such grant is always subject to the control of the legislature, to modify, change, restrain, or annul at its pleasure. (4 Miss. Rep. 123.)
If this be a contract it is without obligation; it is an executory contract without a consideration; a grant by the State of a bounty which may be intercepted at any time. (13 Conn. Rep. 87; 1 Harr. Rep. 470; 12 Wheat. 40, 53; 4 Miss. Rep. 123-5, Rawle on Const.) An act disturbing vested rights is not unconstitutional, unless it also impair the obligation of a contract. (12 Wheat. Rep. 40; 11 Pet. Rep. 539.)
But taking this to be a contract between the managers and defendants, in its terms it implies the power of the legislature to interfere with or annul the lottery grant, and provides that the contract shall cease, if the legislature shall so interfere. This is under seal and the defendants are estopped from denying what their own contract admits.
This case has wider influences and bearings in relation to the powers of the legislature. If the grant of lottery privileges without limitation of time, liable as it is to great abuse, be not subject to any further interference by the legislature, it leaves the State and the people liable to the greatest evils, without the possibility of redress. Where such is the consequence, the court will require the strongest possible case before it will regard the legislature as having absolutely-tied its own hands, and prevented itself from restraining its own beneficiaries and agents from doing mischief indefinitely. Such grants are from necessity, and on the highest policy, subject to further legislation and control. The object of this act of 1841, was to restrain the too frequent drawing of these lotteries, which had become so frequent as six times or more in a week.
Frame, for defendants. — The immorality or evil tendency of lotteries can have no influence in the decision of this case. That was for the legislature to consider; and the question for this court is not whether these acts granting lottery privileges are inexpedient, but whether they are binding, and whether subsequent acts violating contracts under them, are constitutional. Much less will the court decide this case on any grounds of State necessity, for the preservation of public morals. This is a doctrine that has no application in free governments, acting under a written constitution; a doctrine which is the favorite resort of tyranny, and the admission of which as a ground of legal judgment, would be more dangerous than any evil it could possibly correct. The case presents the high principle of the inviolability of contracts, a principle more important to civil government and freedom than any question of the immorality of lotteries.
The law of 1827 has been treated as a mere delegation of political power to agents of the State, for raising money by lottery, and with power in these agents to substitute others. If this be so, what becomes of a law that imposes a tax or fine on these agents, agents without compensation and without interest, for every act done in the very business which they were appointed to do. The act of 1841 imposes a tax for every drawing of the lottery, which these agents were authorized and directed by the act of 1827, to draw in one or more schemes. I grant the power of the State to impose taxes in the widest extent; but it necessarily has some limits." A tax implies objects of taxation, property, persons, occupations; but to say that the State shall create an agency to do a certain act for it and in its stead, and then tax that agency, is not only revolting to justice, but absurd in itself. It is the legislature taxing its own will — the power of the State taxing the power of the State.
But there is a contract under the act of 1827 — 1st. Between the State and the managers. It was a grant by the State, executed so far as the State is concerned, accepted by the grantees, acted upon and transferred to others under the provisions of the grant; and this is an executed contract to the extent of the lottery grant which the State could not repeal. 2d. There is a contract between the managers under that lottery grant and Phalen Co.; a contract founded upon a bona fide and valuable consideration to a large amount, partly paid down; a contract conferring rights and imposing obligations; made strictly in conformity with the act of 1827; and not in violation of any other law. The State by that act authorized this contract to be made, and to that extent is a party to it. It fully sells to the defendants for five years the whole interest in this lottery, with power to conduct and draw, in as many classes as they please, and for the consideration of $10,000, and no more. This interest is a vested interest, a valuable interest; the vendees have a property in the tiling; a right to realize the profits resulting from the privileges which they have bought under the authority of the law. The contract not only confers rights on the vendees, but it creates duties. They are bound by the law and the contract, and their bond, to pay all the prizes drawn to the holders of tickets, as well as the $10,-000 to the managers. A grant is a contract. (3 Story's Com. 241, 256-7.) Legislative grants equally such, though no beneficial interest accrues to the grantee. ( Ib. 259-60.) Any deviation from the terms of a contract, accelerating payment or dispensing with its conditions, impairs the obligation of a contract. (3 Story's Com. 250; 1 Kent's Com. 319.) And it does not matter how much or how little the contract is varied.
The act of 1841 "concerning lotteries" impairs the obligation of this contract, and is, therefore, unconstitutional and void under the 10th Sec. of Art. 1st of the constitution of the United States, which prohibits any State from passing any ex post facto law, or law impairing the obligation of contracts. It requires these defendants to pay to the trustee of the school fund $10, and $50 to the managers, within ten clays after each drawing; the $50 being deducted from the sum to be paid to the managers, according to the contract, and the $10 being in addition to any payment, duty or obligation imposed on them by the contract. Both of these vary the contract and violate its obligation. The payment to the managers is at a different time and manner from that contracted for; and the payment to the school fund is an added obligation which might within the five years amount to a. larger sum than the $10,000, which the contract secured; for the defendants have the right to draw six times in each week or more.
Gilpin. — The authority is to raise $10,000, clear of all charges and expenses. The $10 on each drawing is a part of the charges and may be raised in addition to the $10,000.
Frame. — Still this violates the contract. The defendant bought all the lottery privileges under the law of 1827 for five years, for a specific sum of $10,000, and no more. They pay this absolutely, whether they make any thing or not, and they have no right to draw any longer to make up any deficiency of gain or to cover any additional charge. The charges implied by the law of 1827, are those contained in that law; the charges incident to the drawing; and not charges imposed by subsequent laws. But the contract itself raises for the managers the full lottery privileges; the $10,000 granted by the law, and this exhausts the grant. How then can the contract open and allow the defendants to draw any longer to remunerate them for this superadded charge?
If this be the effect of the act of 1841 it is void, unless it can be shown that the legislature have the constitutional power of so interfering with a contract. What are the grounds upon which the power is claimed for the legislature? 1st. They say the act of 1841 is an act to regulate the drawing of lotteries. Where do the legislature get the power to regulate lotteries already under contract so as to violate the obligation of such contracts? That is the very point in issue. I need not deny the power to regulate the whole subject of lotteries prospectively, nor the power to regulate, for some purposes, lotteries already under contract; to require them to be conducted fairly; to punish frauds, c.; but I deny the power to regulate such lotteries in such way as to violate existing contracts. 3d. That the law is a constitutional exercise of the taxing power. They dare not place it on this power alone, or they would make this a revenue bill, and expose it to another constitutional objection. As a revenue bill it violates the fourteenth section of the second article of the constitution of Delaware, by blending with its object other matters not immediately relating to or necessary for raising revenue. It is in truth a revenue bill, whatever it professes in the preamble; its object was to place money in the treasury, and that is its direct and not its incidental effect. That which is produced by taxation for public use is revenue. ( Rawle on Const. 71; 1 Blac. Com. 170.) 3d. The third ground of support for this law resorted to on the other side, is the proviso at the end of this contract, that if the defendants should be prevented by judicial or legislative interference from drawing the lottery, the contract should at their election be void. This is not the kind of interference which the legislature has attempted. The stipulation in the contract is for the case of prevention by judicial or legislative interference from drawing the lottery; the act of 1841 does not attempt any such thing, but on its face declares that the legislature have not the power to prevent it. The case then provided for by the contract has not arisen.
Gilpin, Attorney-general, in reply. — The act professes to regulate lotteries. That was its object and that will be its effect if sustained. That is the great purpose manifest on the whole act, and the revenue is a mere incident. Mr. Frame admits the power in the legislature to regulate lotteries. Does this act do so. and is that its object? The payment of $10, for each drawing was to prevent too frequent drawings and not to raise revenue. The object was the regulation of the lotteries: and the means used was the imposition of a penalty or tax on each drawing. This penalty is not properly a tax, nor can it be called revenue. It goes not into the treasury of the State for paying the expenses of government, but goes into a separate fund for supporting schools. This view is supported by the authority cited. ( Rawle on Const. 71.) The act has no feature of a revenue bill. The revenue laws are the various laws for assessing, levying, collection and return of State or county rates and levies; the laws whose object is the raising of revenue for the support of government; and not where such revenue is a mere incident.
But take this to be a revenue bill, what is the matter mixed up with it, that is to vitiate it? The counsel referred to the third section repealing all lottery grants, as the only incongruous matter. Admit it, and what is the consequence; not that the whole act is void, but that this improper matter is void. An act may be constitutional in part, and unconstitutional in part. That which is good remains; that which is bad is void.
The general power of taxation is not denied. The State may tax to any extent all the persons and property in the State: and the imposition of a tax does not impair a contract. The contract remains with all its obligation; the parties may enforce it as much as ever; though liable as all are to the State's power of taxation. The State has the power to tax the business of drawing lotteries. The argument against it has been that if conceded, the citizens engaged in this business might be ruined; thus arguing from the possible abuse of power its non-existence. The State has power to tax a bank, though the charter of that bank is a contract between the State and the corporators. The power to tax exists without reference to the amount of the tax which may possibly be laid. ( Prov. Bank vs. Billings, 4 Pet. Rep. 514.) The tax imposed by the act of 1841, is not imposed on individuals or classes, but upon a business; that of drawing lotteries; and to be paid out of the very fund to be raised by the lottery. It is regulated in amount as it ought to be by the extent of the business done. It is to be paid as a part of the charges and expenses of the lottery, which was to be drawn until the whole grant of $10,000 is raised, clear of all charges and expenses. These defendants, therefore, pay none of this tax without compensation. They made their contract in reference to the law which authorized the raising the whole sum, clear of charges, c.
But the act of 1827 created no contract, nor has any contract within the meaning of the constitution of the United States been made under it. Who are the contracting parties? The State appointed certain persons its agents to draw a lottery for a particular purpose. They were not bound to accept the appointment; they derived no interest under it. There was no contract with them, and no consideration for any contract. If a part of the political power of the State be devolved on agents, though through the medium of an act of incorporation, which is a contract, the State has the power to repeal such grant and reclaim the delegated power. (9 Gill Johns. 390.) But it is said that a contract has intervened under the authority of the law, by the sale of this lottery grant to Phalen Paine. Now what was the effect of this sale? to convey to Phalen Paine all the authority of these managers and nothing more. Was it not competent for the legislature to have repealed the act of 1827, at any time before this sale to defendants? This cannot be doubted. What then prevents the repeal afterwards? The sale could give Phalen Co. no rights or powers which the managers had not, nor bind the State to any thing to which it was not bound to the managers. These had nothing more than a mere privilege to raise $10,000 by lottery, and when this was done the law expired of itself; they had no right or power to sell to Phalen Co. any thing more. And even this would be subject, necessarily so, to the power of repeal in the legislature. The authority ceased on the expiration of the grant, or on the repeal of the law. The sale, therefore, for five years was not authorized by the act of 1837. If the. managers had the right to sell lottery powers for five years, they could sell for any number of years; and if they could tie up the hands of the legislature from repeal for the shorter period, they could for the longer. If this is to be the consequence of the recognition of this agreement as a contract, then the State is at the mercy of the managers in any lottery grant however small; and this moral incubus may be fastened on the State in all time to come, by the act of a mere agent of the legislature, appointed for a specific and temporary purpose, and who himself it can hardly be doubted, would be always subject to the control of the legislature, whose creature he is.
As to the proviso in the end of the contract with Phalen Co., its plain meaning is that in just such cases as has occurred, Phalen Co. should have the option to throw up the contract and consider it void, or continue it subject to any interference on the part either of the legislature or the judiciary. It is true that they speak of a prevention of the drawing, but they obviously did not mean to confine it to the case of an entire prevention, or they would not have reserved to Phalen Co. the election whether to avoid the contract or not. If they had meant a total prevention from drawing, the consequence would have been stated at once to be an avoiding the contract. There could be no election to continue that which could not be continued. This clause concludes this cause, contract or not; binding on the legislature or not; the parties have agreed that the action of the legislature should put an end to it, or leave it in the election of the defendants to avoid it.
The chancellor delivered the opinion of a majority of the court; judge Layton dissenting, and chief justice Booth not sitting.
The first question submitted for our consideration and decision relates to the constitutionality of the act of 1841, regarding the contract of 1839 under the protection of the tenth section of the first article of the constitution of the United States, which in the latter clause declares that no State shall pass "any law impairing the obligation of contracts." Without intending to impugn the legislative power of the State in all matters of revenue, police and other subjects within their appropriate and legitimate action, it becomes our duty to consider the case before us as disconnected and clearly distinguishable therefrom. The defendants insist upon their rights as derived from and exercised under a written contract, executed as they contend under the express sanction of a legislative act. It is against the right or power of the legislature to vary or impair vested rights thus acquired and for a valuable consideration purchased, that they rely upon the clause in the tenth section of the constitution of the United States as their shield and defence. It has been insisted on the part of the plaintiffs, that there exists no contract, or that if there is, it recognizes by a proviso the right of legislative interference. From the course of argument adopted it may be necessary to inquire whether the transaction acquired the character of a legal contract by the written instrument executed in 1839; and if so, what was the legal effect and design of the proviso. If we advert to the recital of the act of the 20th of February, 1841, it is apparent that the legislature by which that act was enacted, expressly recognize the existence of contracts under which lotteries were then drawing, and in consequence of the existence of such contracts, declare that the drawing cannot be prohibited but may be regulated. This legislative construction of their own powers and the admitted inability to prohibit in consequence of the existence of a contract, would seem fully to establish beyond all question, that the written instrument executed in 1839 is a contract. Hence we discover, in strict accordance with this opinion of their own powers, by the third and last section of the act of 1841, the legislature repeal all acts granting or authorizing lotteries in this State, which have not been drawn, or all not being drawn, and respecting which no contract has been made and executed for the drawing thereof.
Having thus deduced from the legislative act of 1841, what appears to have been the opinion of those who made that law, concerning their own powers, we shall now proceed to consider the subject independent thereof, and give to you an opinion upon the case judicially. We all agree that the act of 1827 authorizing the lottery to be drawn, is neither a grant nor a contract. It is a bare delegation of authority by which the drawing of the lottery is sanctioned, until a certain amount or sum shall be raised for a certain purpose. If the act had confined the authority to the simple agency of the managers on behalf of the State, the question now presented might not have occurred. But in the act we find the managers are empowered to raise the sum of $10,000, either by drawing the lottery themselves or through their agents, or by a sale of the powers granted in the lottery act. Hence, although we regard the act as making no grant or contract with the managers, we cannot disregard the authority granted to them to make a contract with others for a valuable consideration, which would be binding on the State. While the authority or power delegated remained in the hands of the managers or agents of the legislature, it was subject to the control of the legislature, either to repeal, modify or change. As a mere letter of attorney, it could be revoked. But from the time when a contract was made under the authority conferred by the act to make a sale, a. new state of things took place: an authorized contract between the managers and third persons, for a valuable consideration, conferred new rights and imposed new obligations. The contract having been made in pursuance of the powers contained in the letter of attorney, and in strict conformity therewith, as also to give effect to the purpose therein intended, must be obligatory upon the principal; nor under such circumstances can it be competent for the principal, even should he revoke the letter of attorney, to annul or even impair the contract: its obligation rests upon him as strongly as if he had himself primarily made it and received the consideration paid. Regarding, therefore, the legislature as the principal, under whose authority the contract of 1839, was made, we do consider they had no right to violate this contract, or so revoke or modify the contract as to impair its obligation. But the act of 1841 does not assume to revoke its authority, but to modify by regulating the exercise of the powers delegated, after the same had become the property of third persons as purchasers by sale: that act recognizing the existence of certain lottery grants as under contract, and affirming that with respect to such they had no right to prohibit.
The question then recurs, was the modification of the lottery grant by act of 1841, being under contract at the time, an unconstitutional interference with the contract of 1839? The managers had by that contract for the consideration of $10,000, payable in semi-annual instalments of $1,000 for five years, sold and transferred to Phalen Co., the defendants, all the power, rights and privileges to draw the lottery as authorized by the act of 1827, during the period of five years, the act having authorized the managers to make $10,000, either by drawing or sale, clear of charges and expenses. It may be proper here to remark, that while the authority existed in the hands of the managers, it was unaffected by the lapse of time; it did not terminate until they realised the sum of $10,000, clear of all charges and expenses. But the purchasers by the contract of 1839 received all the rights subject to a different limitation; they bought the exercise of them expressly for a limited period, and agreed to pay the sum of $10,000 for the same or the right to enjoy the same as then existing for five years. The contract when considered in reference to the interests of the contracting parties and the mutuality of obligation, evidently secures to the vendors the payment of $10,-000, clear of all charges and expenses in five years, and to the purchasers all existing rights and privileges under the act of 1827, for and during a period of five years; and each party contracting becomes bound or subject to the obligation of the contract as the consequence of their own agreement, containing and expressing their own stipulations, and ascertaining clearly their respective equivalents. Upon such a contract and the rights vested and exercised under it after the lapse of two years from its execution, the legislature by the act of 1841, declare that all persons drawing lotteries should pay to the school fund $10 for each drawing, and $50 to the parties entitled to the purchase money to be credited on account thereof. The simple question we have to settle in the present case is, does this addition of $10 on each drawing and variation of the time of payment of the instalment of the purchase money by requiring $50 thereof to be paid at each drawing, interfere with the contract made with Phalen Co., in the year 1839, so as to impair the obligation thereof? It has been said that this was no additional charge impairing the contract, because it would come in as a charge, and the defendants would have the right to draw on to realize the additional sum. We entertain a very different opinion: the parties by their contract agreed to no such thing. The defendants agreed to pay $10,000 for the privileges of the lottery act of 18.27, with the then existing charges. If the legislature could add $10 on each drawing, they might add $1,000; it is a question of power and not of amount. So as to the imposition of $50; if they can vary the time of payment of a part of the purchase money, why not the whole; but we consider it our duty to say the legislature had no right thus to add to or vary the contract of 1839; and that such addition and variation thereof, as it increases the amount which the defendants agreed in five years to pay for the exercise of a privilege during five years, and also varies the mode and time of payment of the sum agreed to be paid, it necessarily has the effect of impairing the obligation of the contract. Independent of the constitution of the United States the act, although clearly contrary to right and incapable of being sustained, yet as the act of a sovereign power, might be valid; for it is not always that power regards right; experience teaches that power unlimited, often tramples upon and disregards private right. But when we turn to the clause in the constitution of the United States, which appears there inserted as a shield and defence against all legislative action by a State impairing the obligation of contracts, we feel authorized to say, not only that the legislature had no right, but they had no power to regulate in the manner attempted by the act of 1841, the existing contract of 1839.
In the argument of this case our attention has been drawn to the case of the Charleston Bridge Co. vs. The Warren Bridge. It does not appear to us analogous, or that the conclusion we have arrived at in reference to the questions submitted conflict with the decision in that case. It only establishes that where the legislature had made a grant out of one of the great powers of government for the purpose of authorizing a bridge to be made with the franchise of toll, it had not exhausted the power so as to prohibit it from granting a similar power to another company for the erection of another bridge (and a free bridge,) over the same stream, although such grant might in effect prejudice or destroy the first bridge. The case before us is not the question whether the power of making other lottery acts still remains in the legislature after this was sold to defendants; nor whether such additional act, though to the injury of the defendants, would be unconstitutional; but it is whether the power still exists in the legislature by direct action, to burthen and impair the contract made and transferred under a subsisting act. The question in the case cited was whether a contract and sale of a certain legislative power or privilege to build a bridge was a monopoly, and restrained the legislature from granting a similar power to others. The question here is, whether the legislature could directly add to or vary a contract made under its authority.
With respect to the question arising out of the suggestion that the taxing power authorized the legislature thus to regulate lotteries, it is sufficient for us to remark, that we do not consider the taxing power as having in this case been called into action; the act of 1841 is no revenue bill, but a bill to regulate lotteries under contract.
It only remains for me now to remark, that the proviso in the contract does not vary the case. It was no doubt inserted to protect the purchaser in case he should be interfered with by the legitimate action of the legislature; and the right of election excludes the presumption that the parties were to abandon on any interference of the legislature, especially when they reserved moreover the right to have a judicial sanction to this interference.
Hence we are of opinion that the act of the legislature of the State of Delaware, passed February 20, 1841, entitled "An act to regulate lotteries," so far as the same affects the contract of the defendants made in 1839, purchasing the rights and privileges of drawing a lottery under the act of 1827, is a violation of the latter clause of the tenth section of the first article of the constitution of the United States, and therefore we adjudge and declare the same in relation to said contract void and of no effect.