On the other hand, repeated efforts to subject tax exemptions to the doctrine of inalienability, even though they were sometimes supported by powerful minorities on the bench, failed.2171 It was not until January 1952 that the Court ruled that the Georgia Railway Company was entitled to seek an injunction from the federal courts against an attempt by the Georgian Tax Commission to force it to pay ad valorem taxes. who violated the terms of their special charter issued in Georgia. 1833. In response to the argument that this was a lawsuit in violation of the Eleventh Amendment, the Court stated that the immunity from federal jurisdiction created by the amendment “does not extend to persons acting as officers without constitutional authority.” 2172 The law also left the mortgage debtor in possession during the renewal period, subject to the requirement that the mortgage debtor pay reasonable rent for the property, as determined by the court. At the same time, however, less carefully drafted laws of Missouri and Arkansas, acts that were not so respectful of creditors` rights, were repealed as a violation of the contractual clause.2216 “A state is free to settle the proceedings in its courts, even with reference to contracts already concluded,” Judge Cardozo said for the court, “and moderate extensions of the time limit for advocacy or procedure are usually included in this fall in reserved power. A different situation arises when enlargements are piled up in such a way that the means become a shadow. What controls our judgment in such moments is the underlying reality, not the form or label. The remedies now challenged as invalid must be considered in combination with the cumulative meaning that each confers on each. Seen this way, they are seen as a depressing and unnecessary destruction of almost every incident that adds attractiveness and value to security. 2217 On the other hand, in the most recent category of cases, the Court accepted an extension of the moratorium legislation by the State of New York. While acknowledging that the terms and conditions had improved, the Court found reason to believe that “the sudden termination of a law that delayed the normal liquidation of these mortgages for more than eight years may well lead to a more acute emergency than the original law was intended to mitigate.” 2218 Evaluation of the clause today.—It should not be concluded that the contractual clause is now completely moribund. Even before recent decisions, it still provided the basis for a certain degree of judicial review of the relevance of the effective justification for a declared exercise of police power by a State legislature, and in the case of legislation concerning creditors` reorganization rights, it still constitutes a solid and tangible obstacle to the erosion of legislation. This is also not surprising given that, as we have seen, these rights came first in the minds of the authors of the clause.
The Court`s attitude towards insolvency laws, takeover laws, exemption laws, review laws and the like has always been that they cannot be prosecuted retroactively,2214 and the general lesson of these earlier cases is confirmed by the Court`s decisions between 1934 and 1945 in some cases involving state moratorium laws. In Home Building & Loan Ass`n v. Blaisdell, 2215, the main case, a tightly divided court upheld the Minnesota Moratorium Act of April 18, 1933, which recited the existence of a severe financial and economic depression for several years and the frequency of sales of mortgage foreclosures at inadequate prices, claiming that these conditions had created an economic emergency, which necessitated the exercise of the state`s police power. authorized its courts to extend the time limit for the withdrawal of attachments by an additional period which they might consider fair and equitable, but in no case beyond 1 May 1935. Private contracts and police power. – (FR) Reference has already been made to the increasing subjection of public subsidies to the police powers of the States. The fact that purely private contracts are in a stronger situation in this respect would of course be extremely abnormal. In fact, the ability of private parties to restrict the power of government by the mere means of reciprocity of treaties, with one exception, is still inferior to that of the state to tie its hands by withdrawing its own powers. Thus, in a first Pennsylvania case, when it was asserted that a law prohibiting the issuance of bank notes by unregistered banking associations violated the contractual clause because of its effect on certain existing contracts of members of such an association, the state Supreme Court replied: “But it is said that the members had entered into a contract with each other, which would be dissolved by the cessation of their activity. What`s next? Is this a violation of the Treaty as prohibited by the United States Constitution? Consider where such a construction would lead.
Suppose there is no law in any of the states against gambling, cockfighting, horse racing or public masquerades and that companies should be created to continue these practices. Would the legislator then be powerless to prohibit them? The answer, of course, was No. 2200 2226 431 U.S. 17-21 (the court was not sure of the value of the impaired interest, but considered it to be an “important security provision”); 438 U.S. 244–47 (The law required the corporation to recalculate contributions that were previously reasonable and in the form of lump sums). In addition, an exemption must also be interpreted strictly in the hands of a taxable person clearly entitled ….
