Municipal bond contracts are particularly noteworthy. While a city is in one respect only an emanation of the sovereignty of the government and an agent of the government, when it borrows money, it is considered to be acting in an entrepreneurial or private capacity and is therefore justifiable under its contracts. In addition, as in the main case of the United States, ex rel. By Hoffman v. Quincy,2195 “If a state has authorized a local authority to enter into contracts and exercise local tax power to the extent necessary to fulfill its obligations, the authority so granted cannot be revoked until the contract is fulfilled. In this case, the court issued a mandamus that required municipal officials to collect taxes to satisfy a judgment on their obligations under the law in force at the time the bonds were issued.2196 In addition, a state that shares a municipality in debt, among other things, may allow it to evade its obligations. Blame follows the territory, and the duty to estimate and collect taxes in order to satisfy them passes to subsequent companies and their managers.2197 But where a municipal organization has practically ceased to exist by taking leave of its offices, and the function of government is again exercised directly by the state, the court has so far found itself powerless, To thwart a rejection program.2198 There is no reason for the state to implement the role of the particeps criminis in order to free its municipalities from the obligation to pay their honest debts. Thus, in 1931, during the Great Depression, New Jersey created a Municipal Finance Commission with the power to take control of its insolvent communities. In response to the complaint of some duty holders that this legislation affects the contractual obligations of their debtors, the court emphasized in its speech by Frankfurter J. that the practical value of an unsecured claim against a city is “the effectiveness of the city`s tax authority” that the revised legislation should preserve.2199 Defined “Obligation.”—A contract can be analyzed in two elements: the agreement that comes from the parties and the obligation that comes from the law and makes the agreement binding on the parties.
The concept of obligation is an import of civil law and its appearance in the contractual clause would be due to James Wilson, a graduate of Scottish universities and civilians. Indeed, the term used in the contractual term has been made more or less superfluous by the doctrine that `[t]he laws which exist at the time and place of the conclusion of a contract and where it is to be performed occur and form part of it`. 2087 Consequently, the Court sometimes recognises and sometimes ignores the concept in its decisions in which it applies the clause. In Sturges v. Crowninshield,2088 Marshall C.J. defined “contractual obligation” as the law requiring a party to “discharge its obligation,” but later that year in Dartmouth College v. Woodward, he outlined the points under consideration: “1. Is this treaty protected by the U.S. Constitution? 2. Is he affected by the acts suffered by the defendant? 2089 The word “obligation” undoubtedly implies that the Constitution should only protect executable treaties – that is, treaties that are still awaiting execution – but this implication was rejected very early on for a particular category of contracts, with an extremely important result for the clause. 6.
Civil Code “1643. INTERPRETATION IN FAVOUR OF THE TREATY. A contract must be interpreted in such a way that it can be lawful, effective, final, reasonable and effective where possible without prejudice to the intention of the parties. Of course, the term private contract is not global. A judgment, although issued in favour of a creditor, is not a contract within the meaning of the Constitution,21FootnoteMorley v. Lake Shore Ry., 146 U.S. 162 (1892); New Orleans vs. New Orleans Water-Works Co., 142 U.S.
79 (1891); Missouri & Ark. L. & M. Co.c. Sebastian County, 249 United States 170 (1919). But see Livingston`s Lessee v. Moore, 32 U.S. (7 pet.) 469, 549 (1833); and Garrison v. New York, 88 U.S. (21 wall) 196, 203 (1875), suggesting that, in the case of judgments in culpable acts, a different view was previously adopted.
22FootnoteMaynard v. Hill, 125 U.S. 190 (1888); Dartmouth College v Woodward, 17 U.S. (4 wheat) 518, 629 (1819). See Andrews v. Andrews, 188 U.S. 14 (1903). The question of whether a woman`s rights to community property were contractual under California law was raised in moffit v.
Kelly, 218 U.S. 400 (1910). And whether a particular agreement is a valid contract is a matter for the courts and, possibly, the Supreme Court when the protection of the contractual term is invoked.23FootnoteNew Orleans v. New Orleans Water-Works Co., 142 U.S. 79 (1891); Zane v. Hamilton County, 189 U.S. 370, 381 (1903). 3. Civil Code (`) 1638. INTENT TO BE DETERMINED FROM LANGUAGE. The wording of a contract is supposed to govern its interpretation if the wording is clear and explicit and does not imply absurdity. .
