EL PASO v. SIMMONS
Since the late 19th century, Texas sold land to facilitate settlement in the state and construction of schools. If, however, a purchaser missed an interest payment on the property, the land was immediately forfeited back to the state unless the owner made the payment before the land could be re-sold. Under this program, Greenbury Simmons purchased and then forfeited some land in 1947. Just over five years later he offered to pay the interest to re-acquire the property. The state refused to comply with his wishes citing a 1941 amendment to its law which gave individuals five years to claim their forfeited land. Simmons's land was sold to the City of El Paso in 1955.
Did the 1941 amendment to the Texas law violate the Contract Clause of the Constitution?
Legal provision: Article 1, Section 10, Paragraph 1: Contract Clause
While the Court agreed that the power of a state to modify the obligation of a contract is not limitless, it found that the 1941 amendment was not offensive to the Contract Clause. Justice White resaoned that the amendment was enacted with the intent of restoring "confidence in the stability and integrity of land titles" and to rectify difficulties that mineral speculators were creating for the state as it attempted to implement its land sale program. White argued that the five-year limit provided "purchasers with a bona fide interest in their lands" plenty of time to rescue their property while it served an important state interest of encouraging defaulting purchasers to comply with their contractual obligations to Texas.