Evening star., 1934-01-10
OVERSTRESS SEEN
|NM|NNES0TACASE
Importance of Supreme Court
Decision 70 Program OF
Change Secuted.
BY MARK SULLIVAN.

Because the Supreme Court is looked
upon as the principal bar to those with
in the Roosevelt administration who
have it in mind to bring about funda-
mental change. the decision of the
court in the Minnesota mortgage mora
torium case is being examined with
minute care to find at what point the
court may interpose its power.
Specifically the decision has been
treated in early headlines and com
ment as giving encouragement to the
advocates of change. Accurately seen,
however, the decision, considered apart
from certain dicta in it, does not pear
out any such assumption.
The essential facts are that the Min
neSota Legislature enacted a law post
poning for a fixed period, two years,
but IN no case beyond May l, 1880,
the time when mortgage could take
final possession of a forecloSed prop
erty. Under this act, the owner and
occupier of a house and lot bearing
a mortgage for some $3,700 applied to
the Minnesota courts for an extension.
This extension the highest Minnesota
court granted. On appeal the Supreme
Court of the United States has now
confirmed the extension and sustained
the constitutionality of the Minnesota
statute.
Contracts Often Modified.
The reasons for regarding this decl-
sion as giving little encouragement to
radical departure are many. In the
first place, what the court has done In
this case is analogous to what courts
in America and Great Britain have
done thousands of times, even in the
absence of any statute such as the
Minnesota one. Equity courts habitu-
ally in the ordinary course, ever since
the principle OF equity arose about 1900,
modify a contract when they find that
the literal carrying out of it under ex-
traordinary conditions would be, as
Chief Justice Hughes puts it, such "as
to shock the conscience"
In the second place, the present ac-
ton of the court is not departure.
It is based upon and consistent with
its sustaining of analogous legislation
during the war when several States pro-
vided that leases made before the war
should be continued in effect beyond
the termination of the lease because OF
the scarcity of housing and the rise in
rentals which the war had caused, pro-
tlOcu Lllc SOA1J-AluCQ w pay CAAS
old rent. Parenthetically, extremely
conservative President Coolidge in 1925,
six years after the war ended, fathered
legislation extending this control OF
rents in the District of Columbia and
his action was criticized in public state
ments by some conservatives as de
struction of property rights and OF
sacredness Of contracts"
Want Continued Occupancy.
In the third place, the present deci-
sion and the legislation it sustainS, is
as acceptable to many mortgages as to
mortgagors. In the depression, eviction
of the owner of the property and pos
session by the mortgage is almost the
last thing the mortgage desires. In
surance companies having large guam
titles of mortgages on Western farms
especially, have been embarrassed by
becoming owners of farms which they
Of course could not occupy themselves,
for which there is no sale, and man
agement of which is burden involving
the rapid depreciation which goes with
unoccupancy, as well as payment OF
taxes What mortgages in most cases
greatly prefer is that the owner con-
tihue to occupy the land after explra-
ton of the mortgage, and that he con-
This in substance is just what is done
in the present case. The owner Of the
house is given by the statute and by the
decision the right to hold it until May
1, 1895 He is required to pay ths
mortgage $40 a month, which tho
court finds to be a fair rental value"
and which Is enough to pay taxes, in
terest and small instalments on the
principal 1t may be the loser of this
suit is as satisfied as the winner OF 1t.
Certainly the great insurance COM
panies which have large numbers Of
mortgages must be pleased with a de-
cision which gives statutory validity to
arrangements which they have tried to
policy.
Lessons Imitation Need.
For yet other reasons the decision
Is not radical. 1t is step in the
direction of compromise of debt. Com
promise of debt is one of only two
paths out of the country's troubles,
the present disparity between 1929
debts and 1888 prices of land and goods.
The other way out is imitation. To
the extent that compromise OF deot
is facilitated, pressure for imitation 10
diminished, and also pressure for radi-
cal action generally. In this respect
the decision is what Chief Justice
Hughes speaks of as for the protec--
ton of a basic interest Of society and
"to safeguard the economic structure
upon which the good Of all depends"
Finally, the decision gives no COM
fort to advocates of permanent revo-
lutionary change because of the en-
phasis the decision puts on the emer-
gency nature of the legislation. AS
Chief Justice Hughes puts it: "The
legislation is temporary in operation.
1t is limited to the eXigency which
called it forth. The operation
of the statute itself could not validly
outlast the emergency
Those sentences are the real answer
as to whether the decision is radical.
They go to the heart Of things at
Washington. These sentences seem to
say that the ardent and clever young
tntellectuals in the Roosevelt admins
tration cannot use the excuse of emer- |
gency longer than the emergency ex-
lists, and cannot use the necessities OF !
emergency as leverage with which |
to bring about permanent change of
government, or a social or economic
structure.
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