DIVISION THIRD. PART I. OBLIGATIONS IN GENERAL. II. CONTRACTS. III. OBLIGATIONS IMPOSED BY LAW. IV. OBLIGATIONS ARISING FROM PARTICU LAR TRANSACTIONS. PART I. OBLIGATIONS IN GENERAL. TITLE I. DEFINITION OF OBLIGATIONS. IV. EXTINCTION OF OBLIGATIONS. TITLE I. DEFINITION OF OBLIGATIONS. SECTION 1427. Obligation, what. 1428. How created. 1427. An obligation is a legal duty, by which a obligation, person is bound to do or not to do a certain thing. NOTE. For general definitions of the term obligation, see Bouv. Inst., pp. 3, 14; Coke Litt., p. 172; Comyns Digest, Obligation (A.); 2 Serg. & R. Penn., p. 502; 1 Blackf. Ind., p. 241; 6 Vt., p. 40; Harp. So. C., p. 434; 1 Bald. C. C., p. 129. The Federal and State Constitutions (U. S. Const., Art. I, Sec. 10, and State Const., Art. I, Sec. 16,) contain clauses prohibiting the passage by a State of any law "impairing the obligation of contracts."-See Dewey vs. Lambier, 7 Cal., p. 347. This, however, does not affect the power of Congress to pass cuch laws.-Evans vs. Eaton, Pet. C. C., p. 322. The question as to the meaning of the term "obligation" has been much discussed. What does the term obligation, in the clause referred to, include? Says Parsons, in his work on Contracts (p. what. * 555,): "The importance of the question rests mainly on the distinction which has been drawn between the laws of a State which were in force at the time the contract was made, and those which are subsequently enacted. The latter may certainly impair this 'obligation,' while the former, it is contended, certainly cannot, because all existing laws enter into contracts made under them, and define and determine that contract." Thus insolvent laws of a State affect only contracts made after the passage of the law. It is generally settled that these clauses cannot limit or affect the power of the State to enact general police regulations for the preservation of public health or morals, and such general laws are not within the prohibition of the Constitution.-Parsons on Contracts, p. 556. "A contract is an agreement in which a party undertakes to do or not to do a particular thing. The law binds him to perform his undertaking, and this is, of course, the obligation of his contract."-Sturges vs. Crownin shield, 4 Wheat., p. 122. In case of Ogden vs. Saunders, 12 Wheat., pp. 257, 259, Justice Washington, citing the above extract, says: What is it, then, which constitutes the obligation of a contract? * It is the law which binds the parties to perform their agreement. The law, then, which has this binding obligation, must govern and control the contract in every shape in which it is intended to bear upon it, whether it affects its validity, construction, or discharge. It is, then, the municipal law of the State, whether written or unwritten, which is emphatically the law of the contract made within the State, and must govern it throughout, wherever its performance is sought to be enforced." Justice Thompson, in the same case, citing the extract from Sturges vs. Crowninshield, says: "That is as I understand it; the law of the contract forms its obligation; and if that is so, the contract is fulfilled and its obligation is discharged by complying with whatever the existing law required in relation to such contract." And Trimble, Justice, in same case, also says: "The obligation of the contract consists in the power and efficiency of the law which applies to and enforces performance of the contracts, or the payment of an equivalent for non-performance. The obligation does not inhere and subsist in the contract itself, proprio vigore, but in the law applicable to the contract. This is the sense, I think, in which the Constitution uses the term obligation." "The legal obligation of a contract consists in the remedy given by law to enforce its performance or to make compensation for the failure to perform it.”— Johnson vs. Higgins, 3 Met. (Ky.), p. 566. "Right and obligation are considered by all ethical writers as correlative terms. Whatever I, by my contract, give another a right to require of me, I, by that act, lay myself under an obligation to bestow. The obligation of every contract will, then, consist of that right or power over my will or actions which I, by my contract, confer on another."-12 Wheat., p. 281, per Johnson, J. "Contracts have consequently an intrinsic obligation. No State shall pass any law impairing the obligation of contracts.' These words seem to us to import that the obligation is intrinsic; that it is created by the contract itself; not that it is dependent on the laws made to enforce it."-12 Wheat., pp. 350-3, per Marshall, C. J. It is well settled that the contracts designed to be protected are contracts by which perfect rights-certain definite, fixed private rights of property-are vested.-Sedgwick on Stat. and Const. Law, p. 618; Butler vs. Pennsylvania, 10 How., p. 416. And these are rights, distinguished from engagements undertaken by the State Government for the benefit of all, and which may be varied or discontinued as the public good may require.-Id., and cases there cited. It has been held that the provision of the Constitution, that no law shall be passed impairing the obligation of contracts, refers only to obligations between individuals, and that it does not refer to contracts between individuals and the State.-Myers vs. English, 9 Cal., p. 341; and in Cohen vs. Wright, 22 Cal., p. 320, it is held that "contracts between the State and individuals in public offices are not within the constitutional provision prohibiting the passage of a law impairing the obligation of contracts." Probably this is not now the law. In the case of McCauley vs. Brooks, 16 Cal., p. 30, the question is fully argued and the conclusion arrived at is, "that a State has no more power to impair an obligation into which she herself has entered than she can the contracts of individuals." This overrules the case of Myers vs. English, 9 Cal., p. 341, and it is probable that the portion of the decision in the case of Cohen vs. Wright, above cited (22 Cal. p. 320), was a mistake of the Justice delivering the opinion.— See Beaudry vs. Valdez, 32 Cal., p. 278, commenting on case of McCauley vs. Brooks. Says Mr. Smith, in his Commentaries on Statute and Constitutional Law, Sec. 252: "It is immaterial whether the contract be one |