US SUPREME COURT DECISIONS

In 1910, the Texas State Land Board sold some public land by contract calling for a small down payment plus annual interest and principal payments. State law provided for the termination of the contract and forfeiture of the land for nonpayment of interest, and, in such case, the purchaser or his vendee could reinstate his claim on written request and payment of delinquent interest, unless rights of third parties intervened. In 1941, the law was amended limiting reinstatement rights to five years from the forfeiture date. Here, the land was forfeited in 1947, and appellee, who thereafter took quitclaim deeds to the land, filed for reinstatement and tendered payment more than five years later. His application was denied. The State sold the land to the City of El Paso in 1955, and appellee filed this suit to determine title thereto. The District Court granted appellant's motion for summary judgment on the basis of the 1941 statute. The Court of Appeals reversed, ruling that the 1941 law impaired the obligation of contracts in contravention of Art. I, § 10, of the Constitution, but remanded the case to the District Court for consideration of the City's defenses of laches and adverse possession.

Held:

1. Although this appeal was improperly brought under 28 U.S.C. § 1254(2), the Court treats the papers whereon the appeal was filed as a petition for certiorari under 28 U.S.C. § 2103, dismisses the appeal, and grants certiorari. Pp. 379 U. S. 501-503.

2. It is not every modification of a contractual promise that impairs the obligation of a contract, any more than it is every alteration of existing remedies that violates the Contract Clause. The prohibition against impairment of the obligation of contract "is not an absolute one, and is not to be read with literal exactness, like a mathematical formula." Home Building & Loan Assn. v. Blaisdell, 290 U. S. 398, 290 U. S. 428. Pp. 379 U. S. 506-508.

3. The State has reserved power to safeguard the vital interests of its people, which may modify or affect the obligation of contract but not destroy the constitutional limitation; and the reserved power and this limitation must be construed in harmony with each other. Pp. 379 U. S. 508-509. chanrobles.com-red

Page 379 U. S. 498

4. Without affecting the central undertaking of the seller or the primary consideration for the buyer's undertaking, the Texas statute of repose serves significant state objectives: clarification of land titles, elimination of massive litigation over titles, and effective utilization of property. Hence, it impairs no protected right under the Contract Clause. Pp. 379 U. S. 509-517.

Appeal dismissed, and certiorari granted; 320 F.2d 541 reversed.