Railroad Company v. McClure

ERROR to the Supreme Court of Iowa; the case in its principal features being thus:

The District Court of Washington County, Iowa, on a bill by the county to restrain the collection of taxes for the payment of certain county bonds issued to railroads in June and July, 1858, and where the fact whether, at the time the bonds were issued, the then constitution of the State gave authority to counties to issue such bonds, was one of the issues raised by the pleadings, enjoined the collection; so apparently, in effect, deciding that the bonds were void under the constitution of the State existing when they were issued. The creditors appealed to the Supreme Court of the State. That court affirmed the judgment. The record brought here from it showed that the creditors made the question before that court, 'that the decision of the court below violated that clause in the Constitution of the United States which provides that no State shall pass any law impairing the obligation of contracts; and the decision of this court was against the right set up under such clause of the Constitution.'

The creditors now brought their case here as within the 25th section of the Judiciary Act, which enacts that final judgments in the highest court of a State where is drawn in question the validity of a statute of, or authority exercised under any State on the ground of their being repugnant to the Constitution. . . of the United States, and the decision is in favor of such, their validity, may be re-examined and reversed or affirmed in this court.

The Supreme Court of Iowa, as appeared from its published opinion, considered that the decision of the inferior court, which, it stated, had adjudged the bonds to be unconstitutional, and so null and void ab initio (in other words, had adjudged that there was no contract in the case), was not a decision against the clause of the Constitution of the United States which says 'that no State shall pass any law impairing the obligation of contracts;' and on this ground affirmed it.

Mr. Grant, for the plaintiff in error, referred to cases in the Supreme Court of Iowa to show that at the time when the bonds were issued, the constitution of that State, now construed by its courts in the decision below so as not to authorize the issue by counties of railroad bonds, had been construed so as to authorize such issues; and argued that the later interpretation, adverse to the validity of the bonds, impaired the obligations of a contract; as this court had decided.

Mr. Justice SWAYNE stated the case, and delivered the opinion of the court.