A black family by the name of Shelley purchased a home in St. Louis, Missouri in 1945 without knowing that there was a racially restrictive covenant on the property. The covenant had been in place since 1911 and barred “people of the Negro or Mongolian Race” from owning the property. Residents of the neighborhood sued to block the Shelley family from taking possession of the property.
With the Shelley decision, the Supreme Court ruled that “private agreements to exclude persons of designated race or color from the use or occupancy of real estate for residential purposes do not violate the Fourteenth Amendment; but it is violative of the equal protection clause of the Fourteenth Amendment for state courts to enforce them.”
Essentially, the Court found that racially-based restrictive covenants are not themselves unconstitutional — private parties may voluntarily adhere to them, but state enforcement of such covenants (including judicial enforcement) would be discriminatory and therefore violate the Equal Protection clause of the 14th Amendment. Despite the ruling of the Court, the widespread practice of racial covenants continued, although it was now legally unenforceable.