Stone v. Mississippi
"Stone v. Mississippi" is a significant U.S. Supreme Court case that addresses the limitations of contractual agreements in the context of state authority. The case arose when John B. Stone's corporation received a charter to operate a lottery in Mississippi, only for the state to subsequently adopt a constitution that prohibited all lotteries. When the state ordered Stone to cease operations, the Mississippi high court upheld this action, leading to an appeal to the Supreme Court.
In a unanimous decision, the Supreme Court supported Mississippi's stance, emphasizing the state's police power, which cannot be surrendered through contracts. The Court determined that state charters for lotteries should be viewed as licenses or privileges rather than binding contracts. This ruling underscored the principle that while contracts are generally protected, they cannot override a state's inherent authority to regulate for the public welfare. This case illustrates the delicate balance between individual business interests and state regulatory powers in the realm of public policy.
Stone v. Mississippi
Date: May 10, 1880
Citation: 101 U.S. 814
Issue: Contracts clause
Significance: The Supreme Court narrowed the scope of the application of the contracts clause to public contracts.
Early in U.S. history, the Supreme Court determined that both public and private contracts were covered by the Constitution’s ban on the impairment of contracts. This proposition was harder to maintain for public contracts. John B. Stone’s corporation was given a Mississippi charter to operate a lottery, but the next year, Mississippi adopted a constitution banning all lotteries. The state ordered Stone to cease operating his lottery, and the Mississippi high court upheld the order. The Supreme Court unanimously held for Mississippi, distinguishing this abrogation of contract by arguing that a state’s police power controlled lotteries and that no state could contract away its police power, generally following the logic of West River Bridge Co. v. Dix (1848). It also ruled that state charters authorizing lotteries were either licenses or privileges but not contracts. Justice Morrison R. Waite wrote the unanimous opinion for the Court, and Justice Ward Hunt did not participate.
