Page:Federal Reporter, 1st Series, Volume 8.djvu/801

 MAESHAL V. TOWK OF ELGIN. 78T �to secure their construction, and not to roads which had been constructed without such aid. Second. The aid is to be rendered by the making o£ a mu- tual agreement betweeu the town and the railroad company, by which the town is legally bound to issue its bonds to or for the use of the company, upon performance by the latter of its part of the agreement, and by the issue of bonds accordingly. Third. Until the mutual agreement is arrived at and perfected, as provided in section 7, no legal liability or obligation whatever is imposed upon or ineurred by the town in the premises. In other words, unless an agreement is arrived at and perfected, as there provided, ali s^^^eps which may have been taken with the intent of arriving at and perfecting one, or looking in that direction, are absolute nullities." �Here was a recognition, in my opinion, of the validity of this law, and a f ull and comprehensive construction of the section. It is true the court did not consider the constitutional question, but the decis- ion did not express a doubt, and at least favored its validity. This decision was rendered January 10, 1879, and at that time the bonds^ with the coupons in suit of the town of Elgin, had been issued and were in the market as commercial securities. The Plainview Eailroad Company had also entered into an agreement with the town of Plain- view, and by the construction of its road was entitled to receive town bonds, when a suit was commenced in the district court of the state, by a tax-payer and citizen of the town, entitled Harrington v. Town of Plainview et al., to enjoin ahd restrain their issue, and a preliminary injunction issued. This suit was subsequently tried, and the action was dismissed by the court and the injunction dissolved, and the town issued. its bonds. An appeal to th$ supreme court of the state was t^ken by Harrington, and among other things it was argued on the hearingthat section 7 of the act was unconstitutional, and it was so declared' by the court. It is insisted that this decision of the highest court of the state is binding and the defendants entitled to judgment. Such is not my opinion. The federal courts, it is true, generally follow the adjudications of the highest courts of the state ^ the construction of its statutes, but exceptions are recognized, and these cases'fall within the rule laid down in The City v. Lamson, 9 Wall. 477, which is, briefly, where a decision of the highest judicial tribunal at the time the bonds issued favors the validity of the law under which they issued, a subsequent decision impairing their validity will not be fol- lowed to the prejudice of hona fide holders. �To the same effect is Douglass v. Pike Co. 101 U. S. 687: "We have no hesitation in saying that the rigbts of the parties are to be determined according to the law as it was judicially construed to be when the bonds in question were put on the market as commercial paper." See collated. authorlties ih Dillon ou Municipal Corporations. , ��� �