State courts struck down debt-relief statutes to protect investment over indebted farmers

Evidence

The farmers, naturally enough, turned to their legislature for help. The Wisconsin legislature responded; it passed a whole series of laws which tried one scheme after another in an attempt to prevent a wave of foreclosures. One law stripped the notes and mortgages of negotiability. This meant that the farmers, in a foreclosure action, could claim they had been defrauded. Local judges and juries were bound to be supportive. In a line of cases, beginning in 1858, the Wisconsin supreme court declared this and every single relief statute unconstitutional, citing the Dartmouth College doctrine and the court’s own sense of justice and sound economics. Foreclosure was a bitter pill, but not half so bitter as debt-​relief laws that could dry up the money market and choke off investment in the state. — Lawrence M. Friedman, A History of American Law, 2480

Categorization

• XREF: Pays off ch16 (elites feared legislatures as threats to property) and ch24/ch26 on pro-enterprise judicial doctrine and Dartmouth College protections. — connects to: Falling farmer influence and rising business power revived national bankruptcy law — Lawrence M. Friedman, A History of American Law, 3141; Courts rejected maximization of land value as the measure of owners’ rights — Adam Rome, The Bulldozer in the Countryside:…, 950
• SEED: The Wisconsin supreme court invoking Dartmouth College to void every farm-debt relief law is a sharp, concrete case for an essay on how courts used contract doctrine to discipline debtor legislatures.

Broader Connections

• Courts rejected maximization of land value as the measure of owners’ rights #corroborates (0.80) — Adam Rome, The Bulldozer in the Countryside, 950
• Falling farmer influence and rising business power revived national bankruptcy law #expands (0.72) — Lawrence M. Friedman, A History of American Law, 3141