county or state to a railroad company, as we have seen it had, very plainly it could prescribe the mode in which such aid might be extended, as well as the terms and conditions of the extension, and it needed no assistance from a popular vote of the municipality. Such a vote could not have enlarged legislative power. But the act of 1869 was an unconditional bestowal of authority upon the county commissioners to issue the bonds to the railroad company. It re

quired no precedent action of the voters of the

county. It assumed that their assent had been obtained. That prior to 1869 the sanction of approval by a local popular vote had been required for municipal aid to railroad companies, or improvement companies, is quite immaterial. The requisition was but the act of an annual legislature which any subsequent legislature could abrogate or annul.

It must, therefore, be certified to the circuit court, first, that the act of February 15, 1869, is not unconstitutional; and, second, that the county commissioners of Otoe county could lawfully issue the bonds from which the coupons in suit were detached, without any sub678*] misison to a vote of the people of the county of the proposition to approve the bonds, or a tax for the payment thereof.

Let it be certified accordingly.

Mr. Justice Miller:

I am requested to state that Mr. Chief Justice Chase, Mr. Justice Davis and myself, dissent from the opinion in this case.

HORATIO J. OLCOTT, Plff. in Err.,

v.

COUNTY BOARD OF SUPERVISORS
FOND DU LAC COUNTY.

(See S. C. 16 Wall. 678-698.)

the right of eminent domain of the state may be exerted to facilitate its construction, and taxes may

be imposed by the state in furtherance of that use.

6. The legislature can authorize a county to impose taxes to enable it to make a donation in aid of the construction of a railroad.

[No. 55.]

Argued Nov. 21, 22, 1872. Decided Mar. 31, 1873.

Nates for the Eastern District of Wisconsin.

ERROR to the Circuit Court of the United

Suit was brought in the court below by the plaintiff in error upon certain county orders given to aid the construction of a railroad. Judgment having been in favor of the defend ant, the plaintiff sued out this writ of error. The case is sufficiently stated in the opinion of the court.

Messrs. Matt. H. Carpenter and W. P. . Lynde, for plaintiff in error:

The court below in this case held the decision of the state court in Whiting v. Fond du Lac Co. to be binding upon the Federal Courts, and, therefore, held the act void; expressing no opinion, however, as to the correctness in principle of the state court decision.

Two questions are, therefore, presented:

1. Was the decision of the state court binding upon the Federal Court? And,

2. If that decision is not conclusive, is it correct in principle?

The broad principle ought to be declared by this court that no state court decision affecting the validity of a contract made after the contract was entered into is conclusive upon the Federal courts. All the decisions in this court are consistent with this principle, but the principle itself has not been expressly declared. An erroneous decision of a state court subseOF quent to the contract, ought not to deprive a foreign creditor of his just right. And in no way can this be prevented but to plant the doctrine upon its proper foundation and say that decisions of the state courts pronounced subsequently to the contract are not conclusive upon the Federal courts. If they are, the machinery of a double judiciary, state and Federal, is a mockery and a snare.

State decisions, when followed-questions of taxation-subsequent decisions, when cannot invalidate bonds-railroad is for public use -taxation for donations to railroads.

1. This court generally follows the decisions of the highest courts of the states respecting local questions peculiar to themselves, or respecting the construction of their own constitution and laws. 2. The nature of taxation, what uses are public and what are private, and the extent of unrestricted legislatíve power, are matters which, like questions of commercial law, no state court can conclusively determine for this court.

3. If a contract when made was valid under the constitution and laws of a state as they had been previously expounded by its judicial tribunals and as they were understood at the time, no subsequent action by the legislature or the judiciary will be regarded by this court as establishing its invalidity.

4. Where the highest court of the state, before the county orders now in suit were issued, asserted that building a railroad was a public use, and that taxation might be authorized for its aid, this court is not concluded by a decision since made that such public uses are not of a nature to justify the imposition of taxes.

5. A railroad, although constructed and owned by a private corporation, is for a public use, and

NOTE. In what instances United States courts do not follow state decisions-see note to Butz v. City of Muscatine, 19 L. ed. U. S. 490.

Railroads as public purposes for which money may be raised by taxation-see note, 14 L. R. A. 479.

But there is another and, as we believe, a perfectly conclusive reason why the decision of the state court ought not to preclude this question. That decision, Whiting v. Fond du Lac Co., cannot be regarded as the declaration of a principle of local law. No particular provision of the Constitution of Wisconsin is relied upon to invalidate the statute. The power of taxation, by the Constitution of that state, is unlimited as to objects. If the legislature of Wisconsin cannot pass such a statute, then no statute can be passed by any state in the Union, and all the subsidies granted by Congress in aid of railroads are wholly void.

It is only those decisions of a state court which settle some principle of local law that this court has ever felt bound to follow.

In Swift v. Tyson, 16 Pet. 19, this court, by Story, J., speaking of this section of the judiciary act, says:

"And we have not now the slightest difficulty in holding that this section, upon its true intendment and construction, is strictly limited to local statutes and local usages of the charac

ter before stated, and does not extend to con- | considered to settle the constitutionality of this tracts and other instruments of a commercial statute is: whether the building of a railroad nature, the true interpretation and effect through the county of Fond du Lac, connectwhereof are to be sought, not in the decisions ing it with navigation of the Great lakes, is an of the local tribunals, but in the general princi-object in which the public have an interest; or, ples of commercial jurisprudence.'

To the same effect is Yates v. Milwaukee, 10
Wall. 497, 19 L. ed. 984:

"When general principles are asserted by the
state courts as a ground for invalidating con-
tracts previously made, they are adopted or dis-
regarded by the Federal Courts as they deem
them sound or otherwise, and as justice in the
class of cases before them demands. A few of
the leading cases so ruling will be referred to."
Emmons, Circuit Judge, in Walcott v. Pine
Grove.

to put it in the precise language of the court, whether "The absence of all possible public interest" in the completion of such a road is so clear and palpable as to be perceptible to every mind at the first blush.

The supreme court of the state, in Pratt v. Brown, 3 Wis. 612, decided in 1854, said:

"The incorporation of companies for the purpose of constructing railroads or canals affords the best illustration of the delegation of the power to exercise the right of eminent domain, by the condemnation and seizure of private property for public use, upon making just comWil-pensation therefor. It is admitted that the only principle upon which such delegation of power can be justified is: that the property taken by these companies is taken for the public use."

The following cases are also cited: Chicago v. Robbins, 2 Black, 418, 17 L. ed. 298; liamson v. Berry, 8 How. 495; Swift v. Tyson, 16 Pet. 1; Rowan v. Runnels, 5 How. 134; Pease v. Peck, 18 How. 595, 15 L. ed. 518; Bk. v. Knoop, 16 How. 369; Ins. & Trust Co. v. Debolt, 16 How. 432; Dodge v. Woolsey, 18 How. 332, 15 L. ed. 401; Bk. v. Skelly, 1 Black, 436, 17 L. ed. 173; Gelpcke v. Dubuque, 1 Wall. 175, 17 L. ed. 520; Von Hoffman v. Quincy, 4 Wall. 535, 18 L. ed. 403; Meyer v. Muscatine, 1 Wall. 384, 17 L. ed. 564; Havemeyer v. Iowa Co. 3 Wall. 294, 18 L. ed. 38.

This court has repeatedly decided that if a contract be valid by the law of a state as understood and administered by the different departments of the state government at the time the contract was entered into, no subsequent change of decision by the state court can render it invalid. Trust Co. v. Debolt, supra; Gelpcke v. Dubuque, supra; Havemeyer v. Iowa Co. supra.

See, also, Robbins v. R. R. Co. 6 Wis. 641, decided in 1858; Hasbrouck v. Milwaukee, 13 Wis. 42, decided in 1860.

The propositions found in the cases cited, were the law of Wisconsin in 1869, and they do not justify the doctrine of the court in the subsequent case now relied upon, viz. :

A tax, authorized by the legislature for, the purpose of contributing money to aid in the building of a railroad to be owned and operated by a corporation in the usual way, is unconstitutional and void, because the public has no interest in such railroad.

Whiting v. Fond du Lac Co. 25 Wis. 167.

To condense the doctrine of these cases into yet narrower compass, they furnish the following mosaic:

1. The power of taxation cannot be exercised in aid of a railroad, because the public has no interest in it; and,

2. The power of eminent domain may be exercised in favor of a railroad, because the pub

These decisions rest upon the principle (of
morals as well as of law) that a contract is what
the parties understood it to be when they en-
tered into it, and if it was valid and binding
when it was made, it is so at all times thereafter.
Prior to the issue of these securities, no de-lic has an interest in it.
cision of the supreme court of Wisconsin had
been made in regard to the validity of this par-
ticular statute. But that court had, in repeated
cases, declared all the principles necessary to
uphold the statute. And no lawyer who, at
the time these securities were issued, had read
the statute, the Constitution of the state, the
decisions of the state court, the decisions of this
court and of all other courts in America, would
have regarded it as possible that this statute
could be held unconstitutional. On the con-
trary, it is safe to say that, as the doctrine
in relation to the taxing power of the state was
held by the supreme court and understood by
all departments of the state government when
these securities were issued, the statute in ques-
tion was constitutional and the securities valid.
These securities were issued in February,
1869, and the attention of this court is called to
the cases which had been decided and the prin-
ciples which had been enunciated by that court
prior to that time in regard to the power of

This is the logic to which, it is said, this court must yield submission, if not assent.

It is of the highest importance that the railroads of the several states over which our entire land commerce is transported, and which have been aided by an exercise of the right of eminent domain, upon the ground that there were great public works, subject at all times to governmental control like other highways, should not be allowed to slip away from that control, upon the ground that they are private property, and not otherwise amenable to regulation more than a farm or other mere private estate.

taxation.

Soens v. Racine, 10 Wis. 280; Brodhead v.
Milwaukee, 19 Wis. 652.

Now, certainly, after examining these two de-
cisions, the only question that remains to be

In the first place, it is evident that a railroad is either a highway held by the corporation in trust for the public use, or it is a mere private property owned by the stockholders in absolute right. One of these theories must be true; and whichever is held to be true, it will follow that the other is untrue.

Certain conclusions will, necessarily, follow whichever is adopted.

1. If it is a highway, then the legislature can, in its discretion, authorize a county or a town to aid in the construction of such road, and raise money by taxation for that purpose; be

2. If it is not a public highway, then the pub-Draper, 15 N. Y. 532. lic has no other control over it than can be exercised over any mere private estate.

And, considering the extent of our railroad system, the amount of capital invested in railroads, and the intimate relation they sustain to commerce and to all the transactions of life, the importance of settling this question correctly cannot be over-estimated. I ought rather to say, the disastrous consequences to result from unsettling the law upon this subject cannot be over-estimated; for, fortunately, it has been settled for many years and by adjudications of the courts of every state of the Union. Railroads are declared to be public highways by a current of decisions which cannot be resisted, and upon which the decision in Whiting v. Fond du Lac, and a decision in Michigan, have not produced even a ripple.

"The officers of government must be paid, the laws printed, the roads constructed and public buildings erected, but with a view to the general well-being of society, it may also be important that the children of the state should be The legal character of a railroad was fully educated, the people kept from starvation, lossconsidered at the beginning of these great im-es in the public service indemnified, and incenprovements. They could not be built without tives held out to faithful and fearless discharge a resort to the power or right of eminent do- of duty in the future, by the payment of penmain; and it was objected that railroads, to be sions to those who have been faithful public owned and operated by corporations, were pri- servants in the past. There will, therefore, be vate and not public enterprises, and, therefore, necessary expenditures which rest upon considthe right of eminent domain could not be exer-erations of policy alone; and in regard to the cised for their benefit.

The decision of the supreme court of Iowa, See, on this point, the very able opinion of in Hanson v. Vernon, 27 Ia. 28, was read on Chief Justice Dixon, in Curtis v. Whipple, 24 the argument of Whiting v. Fond du Lac, and | Wis. 350; also Sweet v. Hulbert, 51 Barb. 316; probably led to the decision in the latter case. People v. Town Board of Salem, 20 Mich. 452. But the supreme court of Iowa has corrected Although the Constitutions of all the states the error it made in Hanson v. Vernon, and contain liinitations upon legislative power for flatly overruled that decision in the later case the protection of private rights, yet these Conof Stewart v. Polk Co. stitutions do not point out which department of the government should afford relief against unconstitutional legislation.

son v. School Directors, by the same court. Knowlton v. Rock Co. supra.

In Brodhead v. Milwaukee, 19 Wis. 652, the court says: "The legislature cannot create a debt nor levy a tax nor authorize a municipal corporation to do so, in order to raise money for a mere private purpose."

All the cases of taxation cited by our opponents are those where taxes were raised to discharge a burden or obligation resting on the government.

Brodhead v. Milwaukce was a case of raising money to pay soldiers for the defense of the nation.

Soens v. Racine and Hasbrouck v. Milwaukee, were cases of building harbors the title and control of which were in the government; and Thomas v. Leland, was the building of a canal by the state.

If this court had really decided in Brodhead v. Milwaukee, what Mr. Carpenter claimed, it would most effectually end the argument in this case, and it would also end as effectually all distinction between the public use and the private use of money raised by taxation. A tax for one purpose would be as valid as for another.

Perhaps nothing can be added to the conclusive reasoning of the supreme court of Michigan in People v. Town Board of Salem, 20 Mich. 452. The leading opinion in that case was delivered by Cooley, J., who has acquired a national reputation for learning and ability as a constitutional lawyer.

Mr. Justice Strong delivered the opinion of

the court:

peculiar to themselves, or respecting the con-
struction of their own constitutions and laws.
But it must be kept in mind that it is only de-
cisions upon local questions, those which are
peculiar to the several states, or adjudications
upon the meaning of the constitution or stat-
utes of a state, which the Federal courts adopt
as rules for their own judgments. That Whit-
ing v. Railroad Co. was not a determination of
any question of local law is manifest. It is not
claimed to have been that. But it is relied upon
as having given a construction to the Constitu-
tion of the state. Very plainly, however, such
was not its character or effect. The question
considered by the court was not one of inter-
pretation or construction. The meaning of no
provision of the state Constitution was consid-
ered or declared. What was considered was
the uses for which taxation generally, taxation
by any government, might be authorized, and
particularly whether the construction and
maintenance of a railroad, owned by a corpo-
ration, is a matter of public concern.
It was
asserted (what nobody doubts), that the taxing
power of a state extends no further than to
raise money for a public use, as distinguished
from private, or to accomplish some end public
in its nature, and it was decided that building
a railroad, if it be constructed and owned by a
corporation, though built by authority of the
state, is not a matter in which the public has
any interest, of such a nature as to warrant
taxation in its aid. *For this reason it [*690
was held that the state had no power to author-
ize the imposition of taxes to aid in the con-
struction of such a railroad, and therefore that

the statute giving Fond du Lac county power to
extend such aid was invalid. This was a de-
termination of no local question, or question of
statutory or constitutional construction.
was not decided that the legislature had not
general legislative power; or that it might not
impose or authorize the imposition of taxes for

It

The county orders or promissory notes of the county which are the foundation of this suit were all issued on the 15th day of February, 1869, and were made payable to the Sheboygan and Fond du Lac Railroad Company, or bearer. They were issued in pursuance of an act of assembly of the state, approved April 10, 1867, entitled "An Act to Authorize the County of Fond du Lac to Aid the Completion of the She-any public use. Now, whether a use is public or boygan and Fond du Lac Railroad, and Aid the Building of a Railroad from the City of Fond du Lac to the City of Ripon." By that act the officers of the county were authorized to issue the orders to the railroad company, in case a popular vote therein directed should be in favor of railroad aid; and whether this act was a lawful exercise of constitutional power, is the only question in the case.

In the court below, the jury was instructed in substance, that the issue of the orders was unauthorized and void, and that the act of as

sembly, above referred to, was an unconstitu689*] tional exercise of legislative *power. No other question was made at the trial, and no other is now presented to us for our determi

nation.

At the outset we are met by the fact that the supreme court of the state has decided that the act was unauthorized by the Constitution. It was thus ruled in Whiting v. Railroad Co. 25 Wis. 188. If that decision is binding upon the Federal courts, if it has established a rule which we are under obligations to follow, the matter is settled.

It is undoubtedly true in general, that this court does follow the decisions of the highest | courts of the states respecting local questions

private is not a question of constitutional construction. It is a question of general law. It has as much reference to the Constitution of any other state as it has to the state of Wisconsin. Its solution must be sought not in the decisions of any single state tribunal, but in general principles common to all courts. The nature of taxation, what uses are public and what are private, and the extent of unrestricted tions of commercial law, no state court can conlegislative power, are matters which, like quesclusively determine for us. This consideration alone satisfies our minds that Whiting v. Railroad Co. furnishes no rule which should control our judgment, though the case is undoubtedly entitled to great respect.

There is another consideration that leads directly to the same conclusion. This court has always ruled that if a contract when made was valid under the Constitution and laws of a state, as they had been previously expounded by its judicial tribunals, and as they were understood at the time, no subsequent action by the legislature or the judiciary will be regarded by this court as establishing its invalidity. Havemeyer v. Iowa City, 3 Wall. 294, 18 L. ed. 38; Gelpcke v. Dubuque, 1 Wall. 175, 17 L. ed. 520; Ohio L. & T. Co. v. Debolt, 16 How. 432.