Sturges v. Crowninshield
Sturges v. Crowninshield is a significant Supreme Court case from 1829 that addressed the limits of state power in relation to debt relief for individuals. Chief Justice John Marshall delivered the unanimous opinion, which struck down a New York statute designed to provide debt relief by allowing debtors to assign their property for the benefit of creditors. While the Court recognized the state's right to legislate on debt relief in the absence of federal regulations, it found that the specific statute in question violated the Constitution's contracts clause by invalidating debts that had been incurred prior to the statute's enactment. This ruling highlighted the ongoing tension between state legislatures attempting to offer relief to struggling debtors and the constitutional protections of contracts. The controversy surrounding debt relief persisted until the establishment of federal bankruptcy laws later in the nineteenth century. This case remains an important reference point in discussions about the balance of state and federal authority in economic matters and the rights of creditors versus debtors.
Sturges v. Crowninshield
Date: February 17, 1819
Citation: 17 U.S. 122
Issues: Contracts clause; bankruptcy law
Significance: The Supreme Court voided a state law that discharged a debt and thereby violated the contracts clause.
Chief Justice John Marshall wrote the unanimous opinion for the Supreme Court, voiding a New York statute that attempted to provide debt relief for debtors who would assign their property for the benefit of creditors. Marshall upheld the state against the challenge that it lacked any authority to enact debt relief legislation, saying that the state could do so absent federal legislation on the issue. However, this particular statute set aside a debt incurred before the statute took effect and therefore was contrary to the Constitution’s contracts clause of Article I, section 10. Debt relief was controversial until federal bankruptcy legislation was passed late in the nineteenth century.
