Selover, Bates Company v. Ella Walsh

Decision Date02 December 1912
Docket NumberNo. 22,22
Citation57 L.Ed. 146,226 U.S. 112,33 S.Ct. 69
PartiesSELOVER, BATES, & COMPANY, Plff. in Err., v. ELLA T. WALSH
CourtU.S. Supreme Court

Mr. Arthur W. Selover for plaintiff in error.

[Argument of Counsel from pages 113-120 intentionally omitted] Messrs. A. B. Choate and George W. Buffington for defendant in error.

Mr. Justice McKenna delivered the opinion of the court:

Error to the supreme court of Minnesota to review a judgment of that court awarding damages to defendant in error for a breach by plaintiff in error of an executory contract for the sale of land situated in the state of Colorado.

The contract was made by one Bates for plaintiff in error at the office of the latter, in the city of Minneapolis, he being one of its officers, with P. D. Walsh, the husband of defendant in error. Walsh, however, actually signed the contract at his residence in South Dakota. He subsequently assigned his interest to her, as Bates did to plaintiff in error.

Plaintiff in error, asserting that Walsh had made default of the terms of the contract, canceled it and subsequently sold the land to other parties. This action was then brought by defendant in error, resulting in a judgment for her which was affirmed by the supreme court. 109 Minn. 136, 123 N. W. 291.

By the contract, Bates, the assignor of plaintiff in error, covenanted to convey the land to Walsh, the assignor of defendant in error, reserving certain mining rights therein. Payments were to be made in instalments at the office of plaintiff in error in Minneapolis, punctually, and it was stipulated 'that time and punctuality' were 'material and essential ingredients' of the contract. It was convenanted that in case of failure to make the payments 'PUNCTUALLY AND UPON THE STRICT TERMS AND times' limited, and upon default thereof or in the strict and literal performance of any other covenant, the contract, at the option of the party of the first part (Bates), should become utterly null and void, and the rights of the party of the second part (Walsh) should, 'at the option of the party of the first part, utterly cease and determine' as if 'the contract had never been made.' There was forfeiture of the sums paid and a reversion of all rights conveyed, including the right to take immediate possession of the land 'without process of law,' and it was covenanted that no court should 'relieve the party of the second part upon failure to comply strictly and literally' with the contract.

The default of Walsh consisted in the failure to pay taxes, and plaintiff in error elected to terminate the contract, and gave notice of such election to him in writing in the state of North Dakota. Against the effect of such default and notice, defendant in error opposed chapter 223, Laws of Minnesota, which provides that a vendor in a contract for the sale of land shall have no right to cancel, terminate, or declare a forfeiture of the contract except upon thirty days' written notice to the vendee, and that the latter shall have thirty days after service of such notice in which to perform the conditions or comply with the provisions upon which default shall have occurred.

The trial court and the supreme court held the statute applicable, and judgment went, as we have said, for defendant in error. This ruling is attacked on the ground that, as so applied, the statute offends against the 14th Amendment of the Constitution of the United States in that it deprives plaintiff in error of its property without due process of law and of the equal protection of the laws.

With the ruling of the court as to the applicability of the statute to the contract we have nothing to do. We are only concerned with the contention that, as so applied, it violates the 14th Amendment. Of this the supreme court said:

'There can be no serious question as to the constitutionality of the statute. It in effect prescribes a period of redemption in contracts of this character, and was within the power and authority of the legislature. Defendants' principal contention on this branch of the case is not so much that the statute is unconstitutional, as that it should not be construed to apply to contracts made in Minnesota for the sale of land in another state. There is force in this contention, but within the rule of the Finnes Case (102 Minn. 334, 113 N. W. 883), which a majority of the court do not feel disposed to reconsider, the action does not involve the title to the land, is purely personal, and the rights of the parties are controlled by the laws of this state. Under the decision in that case, defendants had no right arbitrarily to declare the contract at an end and refuse to perform it, and are liable for such damages as their refusal caused plaintiff. Following the Finnes Case, we have no alternative but to affirm the action of the court below.'

This excerpt clearly presents the ground of the court's decision, and we may put in contrast to it the contention of plaintiff in error. Its contention is that the contract itself provided for the manner of its termination, and made exact punctuality the essence of its obligation, and that the statute of the state, as it exempts from such obligation, deprives plaintiff in error of its property without due process of law. The argument to support the contention is somewhat confused, as it mingles with the right of contract simply a consideration of the state's jurisdiction over the land which was the subject of the contract. As to the contract simply, we have no doubt of the state's power over it, and the law of the state, therefore, constituted part of it. It is elementary that the obligation of a contract is the law under which it was made, and we are not disposed to expend much time to show that the Minnesota statute was a valid exercise of the police power of the state. Chicago, B. & Q. R. Co. v. McGuire, 219 U. S. 549, 55 L. ed. 328, 31 Sup. Ct. Rep. 259; Brodnax v. Missouri, 219 U. S. 285, 55 L. ed. 219, 31 Sup. Ct. Rep. 238. Whether it had extraterritorial effect is another question. The contention is that the statute, as applied, affected the transfer of land situated in another state, and outside of, therefore, the...

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