Ogden v. Saunders - 25 U.S. (12 Wheat.) 213 (1827)

Rule:

A bankrupt law, which operates prospectively, or in so far as it does so operate, does not violate the U.S. Const. It is there stated that, until the power to pass uniform laws on the subject of bankruptcies be exercised by Congress, the States are not forbidden to pass a bankrupt law, provided it contain no principle which violates the U.S. Const. art. I, § 10.

Facts:

Plaintiff sued defendant for breach of contract. Defendant contended that his obligation under the contract was discharged because of a state bankruptcy law. The trial court found for plaintiff.

Issue:

Was the obligation of the contract impaired by a state bankruptcy law which discharged the debtor from his liability under the contract entered into after the passage of the law?

Answer:

No.

Conclusion:

The court reversed, holding that the bankruptcy law, which operated prospectively, did not violate the U.S. Const. art. I, § 10.