El Paso v. Simmons

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 the remedy 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 of a 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, through the Fourteenth, which says that private property may not be taken away from a 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 the state 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 command against 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.