Home Building & Loan Association v. Blaisdell

Supreme Court of the United States · 1934 · Property

290 U.S. 398 (1934)

Updated July 23, 2026

PropertyContracts ClauseMortgage foreclosurePolice powerConstitutional lawmortgage moratoriumemergency legislationredemption period

Facts

Appellees mortgaged their Minneapolis homestead to appellant in 1928, defaulted, and appellant foreclosed by advertisement and purchased the property at the foreclosure sale on May 2, 1932, for the full amount of the mortgage debt. Under prior Minnesota law, the redemption period would have expired on May 2, 1933, but appellees sought relief under the 1933 Minnesota Mortgage Moratorium Law. The trial court found the property's rental value was $40 per month, that there was no deficiency after the sale, and that the market value of the property exceeded the amount due. The court extended the redemption period to May 1, 1935, conditioned on appellees' monthly payments of $40 to be applied to taxes, insurance, interest, and mortgage indebtedness.

Issue

Whether the Minnesota Mortgage Moratorium Law, as applied to extend the mortgagors' redemption period after foreclosure and to withhold immediate possession from the mortgagee-purchaser, violated the Contracts Clause of Article I, section 10, or the Due Process or Equal Protection Clauses of the Fourteenth Amendment.

Rule

The Contracts Clause is not an absolute prohibition read with literal exactness. Although emergency does not create power, it may furnish the occasion for a state's exercise of its reserved protective power; thus a temporary and conditional restraint on the enforcement of contracts may be valid when enacted to protect a basic societal interest during a genuine emergency, provided the legislation is addressed to a legitimate end, is reasonable and appropriate to the emergency, imposes reasonable conditions, preserves the integrity of the underlying obligation and essential creditor rights, and is limited in duration to the emergency.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

During a severe statewide banking collapse in Ohio, the legislature authorizes courts to extend redemption periods on existing real-estate foreclosures for up to 12 months. Relief is available only after notice and hearing, only while a declared emergency persists, and only if the homeowner pays the judicially determined rental value to be applied to taxes, insurance, and interest.

If a lender challenges the statute under the Contracts Clause, which is the strongest argument for upholding it?

Explanation. The majority held that the Contracts Clause is not absolute and permits temporary, conditional restraint on enforcing mortgage remedies when there is a genuine emergency, the law serves a legitimate public end, creditor protections remain, and the underlying debt is preserved. The wrong answers overstate emergency power or deny that remedies can implicate contract obligations.