Morley v. Lake Shore & Mich. Sou. Ry. Co. - 146 U.S. 162 (1892)
U.S. Supreme Court
Morley v. Lake Shore & Mich. Sou. Ry. Co., 146 U.S. 162 (1892)
Morley v. Lake Shore and Michigan Southern Railway Company
Argued October 14, 17, 1892
Decided November 14, 1892
146 U.S. 162
The Court of Appeals of the New York having held that a judgment obtained before the passage of the Act of the legislature of that State of June 20, 1879, reducing the rate of interest (Sess.Laws 1879, 598, c. 538), is not a "contract or obligation" excepted from its operation under the provisions of § 1, this Court accepts that construction as binding here.
The provision in § 10 of Art. 1, of the Constitution of the United States that "no state shall . . . pass any . . . law impairing the obligation of contracts" does not forbid a state from legislating, within its discretion, to reduce the rate of interest upon judgments previously obtained in its courts; as the judgment creditor has no contract whatever in that respect with the judgment debtor, and as the former's right to receive, and the latter's obligation to pay exists only as to synch an amount of interest as the state chooses to prescribe as a penalty or liquidated damages for the nonpayment of the judgment.
A state statute reducing the rate of interest upon all judgments obtained within the courts of the state does not, when applied to one obtained previous to its passage, deprive the judgment creditor of his property without date process of law in violation of the provisions of § 1 of the Fourteenth Amendment to the Constitution of the United states.