## Facts

- During the Great Depression, Minnesota enacted the Mortgage Moratorium Law (1933) after declaring an economic emergency.
- The law authorized courts to postpone foreclosure sales and extend statutory redemption periods for existing mortgages, subject to judicial findings and conditions.
- Relief was limited to the emergency period and could not extend beyond May 1, 1935.
- Extensions were to be “just and equitable” and conditioned on payments reflecting reasonable property income or rental value, directed to items such as taxes, insurance, interest, and principal.
- Home Building & Loan Association held a mortgage on the Blaisdells’ homestead and foreclosed; the property was within the statutory redemption period.
- The Blaisdells petitioned for relief, and the state court extended the redemption period and required monthly payments of $40 to the lender during the extension.
- The lender argued the statute and extension order impaired the mortgage contract in violation of the Contracts Clause and also violated due process and equal protection.
- The Minnesota Supreme Court upheld the statute, and the lender appealed.

## Issues

1. Whether Minnesota’s Mortgage Moratorium Law, as applied to extend a mortgagor’s redemption period, unconstitutionally impaired the obligation of contracts under U.S. Const. art. I, § 10.
2. Whether the law’s temporary alteration of foreclosure remedies violated the Fourteenth Amendment’s due process or equal protection guarantees.

## Decision

- The Supreme Court affirmed the judgment upholding the statute and the extension order.
- The Court held that the law did not violate the Contracts Clause because it reflected a permissible, temporary exercise of state police power during a genuine emergency.
- The Court treated the statute as a modification of remedy that preserved the mortgagee’s substantial security through court supervision and conditions (including required payments).
- The Court rejected the argument that an emergency creates new constitutional power, but held that an emergency may justify the use of existing police power within constitutional limits.
- The Court found no Fourteenth Amendment violation on these facts.

## Legal Principles

- The Contracts Clause is not applied as a rigid prohibition; it must be construed alongside the state’s reserved police power to protect public welfare.
- An emergency does not expand constitutional power, but it may provide the occasion for the state to exercise existing protective authority.
- A state may modify contractual enforcement remedies without unconstitutional impairment if the modification does not materially destroy substantial rights secured by the contract.
- Contract adjustments are more likely to be sustained when they address a broad public purpose, are reasonably related to that purpose, impose conditions protecting creditor interests, and are temporary and limited in duration.

## Conclusion

The Court sustained Minnesota’s temporary mortgage moratorium as a reasonable, time-limited adjustment to foreclosure remedies during an economic emergency, compatible with the Contracts Clause because it served a public purpose and preserved the creditor’s essential security through judicially imposed conditions.


Home Building & Loan Ass’n v. Blaisdell, 290 U.S. 398 (1934)