STONE v. MISSISSIPPI
In 1867, the provisional state legislature of Mississippi chartered the Mississippi Agricultural, Educational, and Manufacturing Aid Society. The Society was chartered to run a lottery for the next 25 years; however, in 1868, a new constitution ratified by the people outlawed lotteries in the state. John Stone and others associated with the Society were arrested in 1874 for running a lottery. The Society claimed they were protected by the provisions of their charter while the state declared that the subsequent enforcement legislation had repealed the grant.
Did Mississippi violate the Contract Clause by repealing the Society's grant?
A unanimous Court found that the Mississippi classification of lotteries as outlawed acts was valid. The State legislature do not have the power to bind the decisions of the people and future legislatures. The Court stated that no legislation had the authority to bargain away the public health and morals. The Court viewed the lottery as a vice that threatened the public health and morals. The contracts protected in the Constitution are property rights, not governmental rights. Therefore, one can only obtain temporary suspension of the governmental rights (in this case, the right to outlaw actions) in a charter which can be revoked by the will of the people.