El Paso v. Simmons

Appellant
City of El Paso
Appellee
Greenberry Simmons
Appellant's Claim
That the property in question was rightfully returned to the state of Texas after its forfeiture by Greenberry Simmons.
Chief Lawyer for Appellant
William J. Mounce
Chief Lawyer for Appellee
Greenberry Simmons
Justices for the Court
William J. Brennan, Jr., Tom C. Clark, William O. Douglas, Arthur Goldberg, John Marshall Harlan II, Potter Stewart, Earl Warren, Byron R. White (writingfor the Court)
Justices Dissenting
Hugo Lafayette Black
Place
Washington, D.C.
Date of Decision
18 January 1965
Decision
The U.S. Supreme Court reversed the decision of the U.S. Court of Appeals forthe Fifth Circuit.
Significance
The case of El Paso v. Simmons dealt with important constitutional issues concerning the Contract Clause of the Constitution, raising questions involving impairment of contracts, legislation affecting contracts, motives formodifying the obligation of a contract by a state, and the limit or extent ofa state's power to do so.
Case Background
The land in question was originally sold by the state of Texas in 1910, undera State Land Board program that sold public land for one-fortieth of the principal and annual interest and principal payments. The purpose of the publicland sale was to encourage the settlement of Texas and to provide funds for the Permanent Free School Fund. If the interest was not paid according to thecontract, the statute caused the land to be forfeited back to the state for resale. A provision of the statute allowed the purchasers to reclaim their land if they paid the full amount of interest due, as long as no third party hadintervened. In 1941, the state amended some of the provisions, including theone mentioned, so that it now limited the right of reinstatement to only "five years from the date of forfeiture." Then, in 1951, the right was further limited to only the "last purchaser from the State and his vendees or their heirs." On 21 July 1947, the land in question was forfeited and returned to thestate for resale as the interest remained unpaid. A notice about the forfeiture and an explanation of the 1941 act was sent to the last purchaser of theproperty, but it was returned. On 23 July 1952, Greenberry Simmons filed an application for reinstatement, including all of the interest due, which was denied because it was over the five year limit by two days. The land was sold in 1955 to the city of El Paso. Simmons filed suit against the city, but lost.The court of appeals reversed that decision "on the ground that the constitutional prohibition against impairment of contracts forbade application of the1941 statute to the contract in question." The case went on to be heard by the U.S. Supreme Court to consider the possibility that the 1941 amendment mayviolate the Contract Clause of the Constitution.
A Violation of the Contract Clause or a Lawful Remedy?
First, the Court addressed the matter of jurisdiction and dismissed the improper appeal, but granted a writ of certiorari in its place. With this matter now in order, Justice White, writing for the court, noted that the appellant, the city of El Paso, cited three Supreme Court cases including Wilson v. Standefer (1902), Waggoner v. Flack (1903), and Aikins v.Kingsbury (1918) where the Court found that

the state statutes existing when the contracts were made were not to be considered the exclusive remedies available in the event of the purchaser's default since there was no promise, express or implied, on the part of the State not to enlarge theremedy or grant another in case of breach.

The court of appeals had rejected this argument, finding that the 1941 statute constituted "a change in the obligation of a contract" which violated the Contract Clause of the Constitution. The Supreme Court, however, did not address the correctness of the court of appeals, but "assuming the provision for reinstatement after default to be part of the State's obligation, we do not think its modification by a five-year statute of repose contravenes the Contract Clause." While "the power of a State to modify or affect the obligation ofa contract is not without limit," the majority opinion found that "the objects of the Texas Statute make abundantly clear that it impairs no protected right under the Contract Clause."
Justice White continued in the opinion to summarize the history and purpose of the sale of public land in Texas. He also discussed the amendments that Texas sought to halt the abuse of the land laws by some purchasers. The 1941 amendment, requiring that the right of reinstatement be limited to five years after forfeiture, was enacted "to restore confidence in the stability and integrity of land titles and to enable the State to protect and administer its property in a businesslike manner." Thus, the opinion of the majority reversed the decision of the court of appeals.
The only dissenting justice was Justice Black, who objected to the majority opinion, saying that it was a "balancing away" of the Fifth Amendment, throughthe Fourteenth, which says that private property may not be taken away froma person for public use without just compensation (Lynch v. United States [1934], Griggs v. Allegheny County, Contributors to the Pennsylvania Hospital v. City of Philadelphia [1917]). He maintained that the Court attempted to justify changing the terms of the contract because, overall,the land sale had become a "bad bargain," losing millions of dollars for thestate of Texas. According to Justice Black,

if the hope and realization of profit to a contract breaker are hereafter to be given either partial or sufficient weight to cancel out the unequivocal constitutional commandagainst impairing the obligations of contracts, that command will be nullified by what is the most common cause for breaking contracts. I cannot subscribe to such a devitalizing constitutional doctrine.

Impact
The opinions of the case of El Paso v. Simmons have been cited in at least 15 U.S. Supreme Court cases, and three circuit Court cases; many involving the basic constitutional rights according to the Contract Clause of the Constitution. Contractual obligations affect the lives of almost every American, regardless of age or wealth.
Related Cases

• Waggoner v. Flack, 188 U.S. 595 (1903).
  
• Contributors to the Pennsylvania Hospital v. City of Philadelphia,245 U.S. 20 (1917).
  
• Aikins v. Kingsbury, 247 U.S. 484 (1918).
  
• Home Building and Loan Assn. v. Blaisdell, 290 U.S. 398 (1934).
  
• Lynch v. United States, 292 U.S. 571 (1934).
  
• Ferguson v. Skrupa, 372 U.S. 726 (1963).