Constitutional History Examination, No. 2, Spring 2010, scheduled for Thursday, March 11th.

 

Part 1: 20 minutes. Identification.  CLOSED BOOK.  I will select four of the following terms, and you will be asked to identify fully TWO of those four of your choice.  Some of these terms come from Newmyer and Nelson.  You should probably write at least a full blue book page for each of the two terms you select (from the list of four).

 

Judiciary Act of 1789                                       Marbury v. Madison

Judiciary Acts of 1801, 1802                            Martin v. Hunter's Lessee

Federalist 10                                                   Cohens v. Virginia

Federalist 23                                                   McCulloch v. Maryland

Federalist 78                                                   Fletcher v. Peck

John Marshall                                                   Dartmouth College v. Woodward

Spencer Roane                                     Judicial Review

Joseph Story                                                    10th Amendment

John Pickering and                                            11th Amendment

   Samuel Chase Impeachment              Burr Treason Trial

 

 

 

Part II: 60 minutes.  Court Opinion: 60 minutes.  OPEN BOOK.  You may bring any book and any notes you wish (except a written out answer).  You are encouraged to study with other students and work out a common approach, and you may prepare an outline together and bring that to class as well. 

 

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Pennypincher v. State Bank of Ohio (1827)

 

            In June 1816, the State of Ohio passes the "Ohio Debtors' Insolvency Act."  The act allows any debtor to provide evidence to a justice of the peace of their assets and liabilities, and if their liabilities exceed their assets, then the justice of the peace can certify that the debtor can invoke the terms of the this act.  Under the act, no court can sentence a debtor to prison for indebtedness.  Moreover, debtors cannot have their real property (land) seized to repay debts; rather, debtors are required to pay the "rents and profits" of the land annually to discharge the debt, but may keep the land itself and reclaim from output/profit basic maintenance costs.  If the debtor has no land, then $150 of the debtor's property is exempt from court order for the repayment of debt.  The debtor's ultimate responsibility to repay a debt in full is in no way changed by this act.

 

            In January 1817, James Pennypincher, a Pennsylvania merchant and land speculator, loans the State Bank of Ohio (chartered in 1810*) $250,000 at 6% interest, which the bank then uses to underwrite loans to settlers in Ohio, Indiana, and Illinois.  In 1819, a financial panic sweeps the United States; numerous farmers go broke, as their crops find no buyers, default on their loans, and invoke the 1816 Insolvency Act to protect their land purchases.  In turn, the State Bank of Ohio, unable to recall its own loans, claims insolvency when James Pennypacker presents his note for payment in November 1819.

 

            In March of 1820, responding to pressure nation wide, the U.S. Congress enacts and the President signs the "National Bankruptcy Law" (under Article I, Section 8, SS4).  The act provides that when a federal magistrate certifies a party to a contract is "bankrupt" and cannot meet his[her] obligation, then before a court can order the sale of real property or tools of trade to satisfy a debt, a period of one year must pass after the creditor has made his [her] claim in court and the court has established the financial status of the debtor.

 

             In June of 1822, unable to reach agreement with the State Bank of Ohio on repayment of his loan, Pennypincher sues in Ohio county court to recover his money.  The State Banks asks the court to invoke the 1816 Debtors' Insolvency Act, which it does, assigning to Pennypacker the "rents and profits" of various properties on which the State Bank holds a mortgage.  Pennypacker appeals the ruling to the Ohio State Supreme Court.  He argues that the state insolvency act is unconstitutional and that the federal act applies to his case; as one year now passed, he asks that he be allowed to seize the assets required to cover the debt.  He notes that the "rents and profits" of the land held by the Bank are virtually worthless.  The State Bank responds that the state act is constitutional and that the federal act cannot be constitutionally applied.  The Ohio Supreme Court rules in favor of the State Bank on all the issues.  Pennypincher appeals to the U.S. Supreme Court.

 

            The Supreme Court grants a hearing under its appellate jurisdiction.  The court hears arguments about the constitutionality of the state act and the constitutionality of the application of the federal act to this case.  The attorney general of the State of Ohio, who has joined the case representing the State of Ohio's interest in the outcome, denies the Supreme Court's jurisdiction.  He argues that the 11th Amendment blocks suits against a state and that Section 25 of the Judiciary Act of 1789 in unconstitutional.  During the oral arguments, Supreme Court Associate Justice, Spencer Roane, who had been elevated from his position on the Virginia Supreme Court by retiring President Jefferson in early 1809, makes clear his sympathy with the views of Ohio's attorney general.

 

            Write an opinion for the Supreme Court in the case of Pennypincher v. State Bank of Ohio; or write a dissenting opinion that Justice Roane might have written if he had been on the court.  Your opinion should deal with both the jurisdictional and substantive issues (which may include contract issues, natural rights issues, the relationship of state to federal power (over bankruptcy)).  You should write an opinion that you think reflects the approach of the federal courts during Marshall's tenure on the Supreme Court (or reflects the republican oppositional position); cite (and quote) appropriate passages from the Marshall Court's opinions (and/or from criticism of his opinions).  You should also back your arguments with the appropriate policy considerations (nationalism, protection of property, economic development, etc) that indicate why you decided as you did.  There is no one right answer to this question.

 

 

*The State Bank of Ohio holds a state charter and is the depository for state tax revenue; its board of directors are appointed by the governor for ten-year terms.  It also holds private deposits and makes loans, under its own authority, to whomever it wishes.