"The sound and true rule is, that if a contract when made was valid by the laws of the state, as then expounded by all departments of its government and administered in its courts of justice, its validity and obligation cannot be impaired by any subsequent act of the legislature of the state, or decision of its courts altering the construction of the law." From this Mr. Justice Daniel seems to have dissented. This case came up on writ of error to the Supreme Court of Ohio, whose decision was affirmed. In regard to one of its rulings the above language was used. The principal question was, whether the State of Ohio had entered into a certain contract with the plaintiff, of which a subsequent statute would have been a violation, and it was decided in the negative. 1 Pease v. Peck 1 was a question on a statute of limitations of Michigan. Said Grier, J., after discussing the merits of the question: "The only argument which has been urged which could lead us to doubt the justness of this conclusion is that the Supreme Court of Michigan have, it is said, come to a different decision on this question. We entertain the highest respect for that learned court, and in any question affecting the construction of their own laws, where we entertained any doubt, would be glad to be relieved from doubt and responsibility by reposing on their decision. There are, it is true, many dicta to be found in our decisions averring that the courts of the United States are bound to follow the decisions of the state courts on the construction of their own laws. But although this may be a correct, yet a rather strong, expression of a general rule, it cannot be received as the enunciation of a maxim of universal application. Accordingly, our reports furnish many cases of exceptions to it. In all cases where there is a settled construction of the laws of a state by its highest judicature, established by admitted precedent, it is the practice of the courts of the United States to receive and adopt it without criticism or further inquiry. But when this court have first decided a question arising under state laws, we do not feel bound to surrender our convictions on account of a contrary subsequent decision of a state court, as in the case of Rowan v. Runnels. When the decisions of the state courts are not consistent, we do not feel bound to follow the last, if it is contrary to our own convictions. And much more is this the case where, after a long course of consistent decisions, some new light suddenly springs up, or an excited public opinion has elicited new doctrines subversive of a former safe precedent, &c. Nor do we feel bound in any case in which a point is first raised in the courts of the United States, and has been decided in a circuit court, to reverse that decision, contrary to our own convictions, in order to conform to a state decision made in the mean time. Such decisions have not the character of established precedent declarative of the settled law of a state." And the learned judge goes on to argue that the United States courts must give an independent judgment and do right between the citizens of different states; Daniel and Campbell, JJ., dissenting, the latter on the merits of the case. Jefferson Bank v. Skelly, per Wayne, J.: "This court has repeatedly said . . . that its rule of interpretation has invariably been that the construction given by the courts of the state to state legislation and state constitutions has been conclusive upon this court, with a single exception; and that is, when it has been called upon to interpret the contracts of states, though they have been made in forms of law,' or by the instrumentality of a state's authorized functionaries in conformity with state legislation." And the learned judge proceeds to say that if a state court were to decide the agreement in dispute not to be a contract, and the Supreme Court of the United States were obliged to follow this, the appellate power of the Supreme Court would be of no use to sustain that clause of the United States Constitution which forbids states to pass laws impairing the obligation of contracts; and further argues as to the duty of the Supreme Court to form and announce an opinion on the matter in litigation. We come now to Gelpcke v. The City of Dubuque,2 the typical case. An earlier state decision had held bonds issued by municipalities in aid of railroads to be constitutional. Then came the acquisition of his rights by the plaintiff; then the later state decision overruling the former ones; then recourse to the United States courts. The Supreme Court of the United States, in the principal case, refused to follow the last state decision ; Miller, J., dissenting. The opinion was by Swayne, J., who said inter alia: "It is urged that all these decisions have been overruled by the Supreme Court of the state, &c.; and it is insisted that in a case involving the construction of a state law or constitution this court is bound to follow the latest adjudication of the highest court of the state. Leffingwell v. Warren 3 is relied upon as authority for the proposition. In that case this court said 8 2 Black, 599. 1 1 Black, 443. 2 1 Wall. 175. that it would follow the latest settled adjudications.' Whether the judgment in question can, under the circumstances, be deemed to come within that category, it is not now necessary to determine. It cannot be expected that this court will follow every such oscillation, from whatever cause arising, that may possibly occur. The earlier decisions, we think, are sustained by reason and authority," &c. Giving the rule as laid down in The Trust Co. v. Debolt, the learned judge goes on to say: "The same principle applies where there is a change of judicial decision as to the constitutional power of the legislature to enact the law. To the rule thus enlarged we adhere. It rests upon the plainest principles of justice, &c. To hold otherwise would be as unjust as to hold that rights acquired under a statute may be lost by its repeal.” " For an examination of Shelby v. Guy, Rowan v. Runnels, United States v. Morrison, Green v. Neal, and other cases on this subject, see the dissenting opinion of Mr. Justice Miller, in the principal case. "The question of the constitutionality of the bonds is decided," said counsel, "by the prior opinions upon which the public and the world have acted; and a change of ruling would be the worst of all repudiation, — judicial repudiation.” In Havemeyer v. Iowa County,1 Gelpcke v. The City of Dubuque is affirmed ; and Mr. Justice Swayne says of the rule laid down in that case, that it was established upon the most careful consideration. We think it rests upon a solid foundation, and we feel no disposition to depart from it." The counsel in this case, speaking of the last state decision, permitted himself to use the following language: "How far the departure from precedent was owing to a truer conception of the nature of general and particular laws [the point in dispute was whether a certain law was general or particular], and how far to the fact that the judiciary of Wisconsin was a body elected by popular suffrage at short intervals, and which might have come to the bench suffused with the feelings, ideas, and wishes of a constituency wishing to disown an obligation which it had been found much easier to contract than to pay, was a matter not seen perfectly alike by all sides." Both state decisions were long after the issue of the bonds in question. When the plaintiff acquired his rights does not appear. Upon the merits of the controversy in the state courts the Supreme 13 Wall. 303. Court did not pass. In Thomson v. Lee County,' said Judge Davis: "If the bonds [municipal bonds] in suit had been executed since the last decision in Iowa, they would be controlled by it; but the change in judicial decision cannot be allowed to render invalid contracts which, when made, were held to be lawful. The courts of Iowa, having, when the bonds were issued, construed their constitution and laws so as to give them force and vitality, cannot, by a subsequent and contrary construction, destroy them." The two state decisions related apparently to bonds of the same issue on the part of Lee County. In Larned v. Burlington,2 a municipal bond case, said Clifford, J.: "The court has on two occasions carefully examined the subject, and shown to a demonstration that they [suggestions, viz., to the effect that there had been a change of ruling in the state court] cannot avail where the bonds, at the time they were issued, were valid by the constitution and laws of the state, as expounded by the courts of the state. Discussion upon that topic is unnecessary, as the point is controlled by those decisions."3 In The City v. Lamson, Judge Nelson said: "It is urged, also, that the Supreme Court of Wisconsin has held that the act of the legislature conferring authority upon the city to lend its credit and issue the bonds in question was in violation of the provision of the constitution above referred to. But at the time this loan was made, and these bonds were issued, the decisions of the court of the state favored the validity of the law. The last decision cannot, therefore, be followed." Judge Miller dissenting. Blossburg R.R. v. Tioga R.R.5 In 1845, there had been a state decision holding a plea of the Statute of Limitations to be under certain circumstances good. In 1859 there was an opposite ruling. In the principal case, the court, passing upon rights acquired probably between 1845 and 1859, held the plea bad, following the last state decision, but going, however, into the merits also of the case. Judge Hall, in giving the opinion, cites United States v. Morrison, Green v. Neal, and Leffingwell v. Warren, and says: "It is binding upon this court; and if it be our duty to follow the later of the two decisions of the same court, sitting as a court of last resort within 5 5 Blatch. 395. 3 Gelpcke v. City of Dubuque and Havemeyer v. lowa County. 5 Wall. 485. the state, it is certainly our duty to follow a later decision of the court of last resort, rather than an earlier conflicting decision of a subordinate tribunal. It must nevertheless be conceded that there may be extraordinary and extreme cases in which the Supreme Court of the United States, or even this court, would be justified in disregarding the latest decision of the state court of last resort. This might be done in a case in which the latest decision was in direct conflict with a long series of prior decisions in the same court, and in the highest courts of other states, and clearly repugnant to well-settled principles of law and justice, or in which it was clear and beyond all question that the law of the state had been innocently mistaken or wilfully and corruptly perverted. But these are exceptional cases, like that of Gelpcke v. City of Dubuque, in which the Supreme Court of the United States declared that it would never immolate truth, justice, and law, because a state tribunal had erected the altar and decreed the sacrifice.'' 1 6 Butz v. Muscatine 1 was as follows: The decisions in the state courts had been all one way, and the statute which made against the plaintiff was in existence when he took. The United States Supreme Court overruled the state decisions, Miller, J., and Chase, C. J., dissenting. The charter of Muscatine authorized a levy of not more than one per cent of tax per annum upon the taxable property of the city. The city issued bonds, on some of which the plaintiff sued; and the defendant set up its charter, adding that it had already levied the one per cent, and had no money. Held, that the charter was contrary to the United States Constitution, and invalid, as impairing the obligation of contracts. The reader is referred to the closing passage of Mr. Justice Miller's dissenting opinion. In Tallcott v. Pine Grove, in United States Circuit Court of Michigan,2 Withey, J., lays down these rules: “1. That the United States courts will always respect the decisions of the state courts, and from the time they are made will regard them as conclusive in all cases upon the construction of their own constitution and laws. "2. But the courts of the United States will not give to the decisions of a state court a retroactive effect, and allow them to invalidate contracts entered into with citizens of other states, which, in the judgment of the courts of the United States, were lawfully made; and this principle applies to all contracts which come within the jurisdiction of these courts. Rowan v. Runnels; Ohio Life and Trust Co. v. Debolt. The doctrine of these cases has been frequently reasserted. 1 8 Wall. 578. 3 5 How. 138. 2 Reported in 2 Coler on Municipal Bonds, 117. |