If a person's mental capacity to make reasonable contracts be drawn in question, that is a question of fact, to be ascertained by the same tribunal that is to ascertain all the other facts involved in the case. It certainly is not to be determined by any arbitrary legislation, that shall deprive any one of his natural right to make contracts.
2. All the State laws, that do now forbid, or that have heretofore forbidden married women to make any or all contracts, that they are, or were, mentally competent to make reasonably, are violations of their natural right to make their own contracts.
A married woman has the same natural right to acquire and hold property, and to make all contracts that she is mentally competent to make reasonably, as has a married man, or any other man. And any law invalidating her contracts, or forbidding her to enter into contracts, on the ground of her being married, are not only absurd and outrageous in themselves, but are also as plainly violations of that provision of the constitution, which forbids any State to pass any law impairing the natural obligation of contracts, as would be laws invalidating or prohibiting similar contracts by married men.
3. All those State laws, commonly called acts of incorporation, by which a certain number of persons are licensed to contract debts, without having their individual properties held liable to pay them, are laws impairing the natural obligation of their contracts.
On natural principles of law and reason, these persons are simply partners; and their private properties, like those of any other partners, should be held liable for their partnership debts. Like any other partners, they take the profits of their business, if there be any profits. And they are naturally bound to take all the risks of their business, as in the case of any other business. For a law to say that, if they make any profits, they may put them all into their own pockets, but that, if they make a loss, they may throw it upon their creditors, is an absurdity and an outrage. Such a law is plainly a law impairing the natural obligation of their contracts.
4. All State insolvent laws, so-called, that distribute a debtor's property equally among his creditors, are laws impairing the natural obligation of his contracts.
If the natural obligation of contracts were known, and recognized as law, we should have no need of insolvent or bankrupt laws.
The only force, function, or effect of a legal contract is to convey and bind rights of property. A contract that conveys and binds no right of property, has no legal force, effect, or obligation whatever.[4]
[4] It may have very weighty moral obligation; but it can have no legal obligation.
Consequently, the natural obligation of a contract of debt binds the debtor's property, and nothing more. That is, it gives the creditor a mortgage upon the debtor's property, and nothing more.