Court Opinion

ID: 3849010
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:26:29.661191+00
Date Added: 2024-06-11T07:40:50.096678
License: Public Domain

In an opinion handed down on October 5, 1936, in the case ofBeaver County Building  Loan Association v. Winowich, the writer sought to point out the distinction between laws impairing a contractual right and those providing merely for a temporary suspension of the remedies to enforce it. By the great weight of authority both in the Supreme Court of the United States and the state courts of final jurisdiction, even emergency conditions cannot justify an overriding of the constitutional clause prohibiting impairment of the obligation of contracts,4 — a clause uniformly interpreted to invalidate state laws which alter substantive contractual rights or unreasonably cripple judicial processes provided for their vindication. Thus the legislation involved in the Winowich case impaired the rights of mortgage-bond creditors to obtain repayment of their loans as stipulated in their contracts, and, although the act was expressly limited in duration, its effect in the cases in which it actually operated, instead of being confined to the emergency period, was definitive and permanent.
As explained in the Winowich opinion, however, the *Page 139 
courts have consistently upheld reasonable and guardedstay laws when these were called into being by reason of exceptional public conditions. The leading decision on this subject was in the Minnesota Moratorium case,5 where it was held that a limited suspension of remedies is legal when aimed to meet an emergency situation, which may consist of a general economic depression as well as a physical catastrophe such as a flood or earthquake. When such relief is given the creditor suffers merely a delay, but he ultimately obtains, after the emergency is over, a complete realization of his rights as far as legal remedies can accomplish it.
In the present case, as the opinion of the Chief Justice states, the court has rendered a judgment and is not being asked, as by the act condemned in the Winowich decision, to reduce it in amount or to modify it in any manner. All that is requested is moratory relief, — temporary indulgence in the promptness of its enforcement. It is true that such relief, when heretofore sustained, has usually been granted by legislative action, but there is no established principle of law denying to a court the right to grant a stay by virtue of its inherent powers in the case of so grave and unusual an economic emergency. The persuasive facts set forth in the petition of the City of Philadelphia and admitted by the Commissioners of the Sinking Fund — and no bondholder has intervened to challenge them — indicate that if a court has power temporarily to delay the execution of its judgment this is peculiarly a case calling for its exercise. A decision refusing the petition of the City would not afford any needed protection to the holders of its bonds, but would be an example of strained formalism rather than a realistic interpretation of applicable principles.
I therefore concur in the opinion of the Court.
4 Except where the law is justified as an exercise of the police power. See Beaver County Building  Loan Association v.Winowich, 323 Pa. 483, for illustrations and authorities.
5 Home Building and Loan Association v. Blaisdell, 290 U.S. 398. *Page 140