American Constitutional Law by Donald P. Kommers & John E. Finn & Gary J. Jacobsohn

American Constitutional Law by Donald P. Kommers & John E. Finn & Gary J. Jacobsohn

Author:Donald P. Kommers & John E. Finn & Gary J. Jacobsohn
Language: eng
Format: epub
Publisher: Rowman & Littlefield Publishers
Published: 2010-04-16T04:00:00+00:00

Home Building & Loan Association v. Blaisdell

290 U.S. 398, 54 S. Ct. 231, 78 L. Ed. 413 (1934)

In 1933, in the midst of the Great Depression, Minnesota enacted the Mortgage Moratorium Act, which regulated the foreclosure of property mortgaged to financial institutions. The statute authorized courts, upon the application of a debtor, to postpone the foreclosure of mortgages and to extend the period of redemption from a foreclosure sale. Minnesota’s highest court sustained the statute, and the case reached the Supreme Court on appeal. Opinion of the Court: Hughes, Brandeis, Cardozo, Roberts, Stone. Dissenting Opinion: Sutherland, Butler, McReynolds, Van Devanter.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

[We must decide] whether the provision for this temporary and conditional relief exceeds the power of the State by reason of the clause in the Federal Constitution prohibiting impairment of the obligations of contracts. . . .

Emergency does not create power. Emergency does not increase granted power or remove or diminish the restrictions imposed upon power granted or reserved. The Constitution was adopted in a period of grave emergency. Its grants of power to the federal government and its limitations of the power of the States were determined in the light of emergency, and they are not altered by emergency. . . .

While emergency does not create power, emergency may furnish the occasion for the exercise of power. . . . The constitutional question presented in the light of an emergency is whether the power possessed embraces the particular exercise of it in response to particular conditions. Thus, the war power of the federal government is not created by the emergency of war, but it is a power given to meet that emergency. . . . But where constitutional grants and limitations of power are set forth in general clauses, which afford a broad outline, the process of construction is essential to fill in the details. That is true of the contract clause. The necessity of construction is not obviated by the fact that the contract clause is associated in the same section with other and more specific prohibitions. Even the grouping of subjects in the same clause may not require the same application to each of the subjects, regardless of differences in their nature.

In the construction of the contract clause, the debates in the Constitutional Convention are of little aid. But the reasons which led to the adoption of that clause, and of the other prohibitions of Section 10 of Article 1, are not left in doubt, and have frequently been described with eloquent emphasis. The widespread distress following the revolutionary period and the plight of debtors had called forth in the States an ignoble array of legislative schemes for the defeat of creditors and the invasion of contractual obligations. Legislative interferences had been so numerous and extreme that the confidence essential to prosperous trade had been undermined and the utter destruction of credit was threatened. . . . It was necessary to interpose the restraining power of a central authority in order to secure the foundations even of “private faith.



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