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41485484 Case Briefs on Constitutional Law

41485484 Case Briefs on Constitutional Law

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Published by: Yin Huang on Oct 22, 2011
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290 U.S. 398 (1934)


A dispute arose as to the constitutionality of a
moratorium on foreclosures.


The Great Depression had led to widespread de-
faults on mortgages. The Minnesota legislature
tried to stanch the resulting wave of foreclos-
ures by enacting a law that extended the period
during which a defaulting homeowner could re-
cover possession of a foreclosed home. Blais-
dell, whose home had been foreclosed, sought
refuge under the statute. The Home Building &
Loan Association, which had foreclosed the
home, argued that the statute violated the Con-
tracts Clause of the Constitution.


Does the Minnesota statute violate the Con-
tracts Clause?


The statute does not violate the Contracts


Hughes, C.J. Emergencies do not grant to the
federal government or to the states powers they
do not already possess. Rather, existing consti-
tutional grants of power should be interpreted
in light of the circumstances. The Contracts
Clause was added to the Constitution in the
period following the Revolutionary War. At
that time, the states had imposed so many lim-
itations on the collection of debts that the entire
system of credit threatened to collapse. The
Contracts Clause was apparently added to the
Constitution to prevent interference with the
collection of such private debts. The history of
the Clause, however, does not suggest that it
should be read as a categorical prohibition on
state action in relation to the enforcement of
Here, the Minnesota legislature has sought to
ameliorate the effects of a severe economic
downturn by temporarily altering the means by
which contracts may be enforced. Similar legis-
lation has been upheld in the past. The consti-
tutionality of the statute in question cannot be
challenged on ground that the Framers would
have interpreted the Constitution differently.
The Constitution was intended to adapt to the
Sutherland, J., dissenting. The history of
the Commerce Clause reveals that it was inten-
ded to prevent the government from interfering
with the collection of private debts during pre-
cisely the sort of crisis now existing. At that
time, the rampant cancellation of debts through
legislation threatened to destroy the reputation


of the American people in the eyes of their cred-
itors. The circumstances that gave rise to the
Clause cannot now be invoked to prevent it
from taking effect.
Cardozo, J., concurring. The Contracts
Clause was drafted in a time when contracts
were thought to affect only private parties as
opposed to the state. The development of soci-
ety has shown that this assumption is no longer
true. The statute was designed to protect the
stability of society. The Framers would agree
with its constitutionality.

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