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as having held to the contrary, the courts of the United States are not bound to follow its decision as applied to a corporation created by an act of Congress, for national purposes, and for interstate commerce.16 And where the state court has sustained a result which cannot be reached except on what the Federal Supreme Court deems a wrong construction of the charter without relying on unconstitutional legislation, that court cannot decline jurisdiction on writ of error because the state court apparently relied more on the untenable construction than on the unconstitutional statute.17 So the Federal Supreme Court has jurisdiction over a decision of a state court that a statute of the State, compelling the removal of grade crossings on a railroad, is constitutional, and a judgment in accordance therewith enforcing the provisions of the statute.18 Again, under the exception, above noted, that where the law has not been definitely settled in a State it is the right and duty of Federal courts to exercise their own judgment, county bonds issued under state statutes and sections of its code which permit bonds to be issued to aid in the completion of any railroad in which citizens of the county have an interest, are valid notwithstanding the Supreme Court of the State had decided in another action that such bonds were invalid.19 But in Fairfield v. County of Gallatin,20 the court accepted as binding the decision of the Supreme Court of Illinois 21 and subsequent cases, construing a section of the constitution of that State,22 which provided that "no county, city, town, township, or other municipality shall ever become subscriber to the capital stock of any railroad or private corporation, or make any donation to, or loan its credit in aid of,

14 Roberts v. Northern Pacific R. Co., 158 U. S. 1, 39 L. ed. 873, 15 Sup. Ct. 756.

"Terre Haute & Indianapolis R. Co. v. Ketcham, 194 U. S. 579, 48 L. ed. 1124, 24 Sup. Ct. 767 (a case of railroads; control and regulation by a State; new charter; operation and effect of).

18 New York & N. E. R. Co. v. Bristol, 151 U. S. 556, 38 L. ed. 269, 14 Sup. Ct. 437.

S.

19

Stanley County v. Coler, 190 U. 437, 23 Sup. Ct. 811, 47 L. ed. 1126. 20 100 U. S. 47, 25 L. ed. 544. 21 Chicago & Iowa Rd. Co. v. Pinckney, 74 Ill. 277.

22 In force July 2, 1870.

such corporation: Provided, however, that the adoption of this article shall not be construed as affecting the right of any such municipality to make such subscriptions where the same have been authorized, under existing laws, by a vote of the people of such municipalities prior to such adoption," and holding that such previous donations, if sanctioned by a popular vote, under pre-existing laws, were not forbidden, but were, in like manner as subscriptions, excepted by the proviso from the general prohibitory terms of the section.

§ 277. Same Subject-Instances Continued-RevenueTaxation. Whether a statute of a State is or is not a revenue measure and how rights thereunder are affected by a repealing statute depends upon the construction of the statutes, and where no Federal question exists the Federal Supreme Court will lean to an agreement with the state court.23 Nor will that court interfere with the conclusion expressed by the highest court of a State that under the provision of the state constitution a tax is uniform when it is equal upon all persons belonging to the described class upon which it is imposed; and the decision of the highest court of a State that a license tax imposed on certain corporations was exacted from a foreign corporation doing both interstate and domestic business only by virtue of the latter, will not be reviewed in the Federal Supreme Court.24 Nor will that court review a judgment of the highest court of a State refusing to restrain the collection of a tax, the imposition of which is not authorized by any law of such State.25 So the rule, that if the state statute as construed by its highest court is valid under the Federal Constitution the Federal courts are bound by that construction, has been applied in a case wherein the question of the taxation of cars under the New York franchise tax law, and the

23 Flanigan v. Sierra County, 196 U. S. 553, 49 L. ed. 597, 25 Sup. Ct.

314.

24 Armour Packing Co. v. Lacy, 200 U. S. 226, 26 Sup. Ct. 232, 50 L. ed. 451.

25 Savannah, T. & I. of H. Ry. v. Savannah, 198 U. S. 392, 49 L. ed. 1097, 25 Sup. Ct. 690.

26 New York Central & Hudson River Rd. Co. v. Miller, 202 U. S. 584, 50 L. ed. 26 Sup. Ct.

situs of personal property was passed upon.26 And in the State Railroad Tax cases,27 the Supreme Court of the United States adopted the decision of the Supreme Court of the State of Illinois which had construed her statute and had decided that the law complained of in those cases was valid under her constitution. So the decision of a state Supreme Court that a statute in respect to the taxation of national banks does not conflict with the constitution of such State is conclusive upon the Federal Supreme Court.28 But where it appears from the agreed statement of facts in a case that, under the laws of a State, as construed by the highest court of such State, all the elements of value which are embraced in the assessment of shares of stock in national banks are not included in assessing the value of property of state banks and other moneyed corporations, there is discrimination against the shares of national banks, and the state law taxing such shares as so construed violates and is void under that provision of the Revised Statutes which authorizes the taxation by the States of shares of stock of national banks, but exacts that the tax when levied shall be at no greater rate than that imposed on other moneyed capital.29

278. Same Subject-Instances Continued-Exemptions from Taxation-Impairment of Obligation of Contract as to Taxation. The construction by the Supreme Court of & State of its constitution as authorizing exemptions from

*92 U. S. 575, 23 L. ed. 663. "Merchants' & Mfrs. Bank v. Pennsylvania, 167 U. S. 461, 42 L. ed. 236, 17 Sup. Ct. 829. See citations in next following note.

San Francisco Nat. Bank v. Dodge, 197 U. S. 70, 49 L. ed. 25 Sup. Ct. -. Examine People's Nat. Bank v. Marye, 191 U. S. 272, 24 Sup. Ct. 68, 48 L. ed. 180 (a case of taxation; bank stock; deductions; state laws. In this case it was held that the Federal Supreme Court will

follow the ruling of the highest court of a State when it was held that a state statute does not violate the constitution of that state); Jefferson Bank v. Skelly, 1 Black (66 U. S.), 436, 17 L. ed. 173 (franchise grants; construction; waiver of sovereignty; bank charters; tax exemption irrevocable; subsequent constitutional provision; rule as to following state construction not extended to cases where Federal courts called on to interpret contracts of States).

30

taxation, but declaring that such exemptions are repealable, binds the Federal Supreme Court, and therefore a railroad company, incorporated after such decision of the state court, is precluded from claiming an irrepealable exemption in its charter, and being so repealable the question whether it had in fact been repealed is a local and not a Federal question. So, following the decisions of the Supreme Court of North Dakota as to the tax laws of Dakota Territory the Supreme Court of the United States holds that an erroneous decision of an assessor of taxes under those laws in the matter of exemptions does not deprive the tax proceedings of jurisdiction, and, that until such erroneous decision is modified or set aside by the proper tribunal, all officers with subsequent functions may safely act thereon; and that the rule of caveat emptor applies to a purchaser at a tax sale thereunder. It was also held that the county treasurer in making a sale under those laws for the non-payment of taxes acted ministerially and was protected as long as he acted within the statute. It was further decided that, in the case of lands granted to the Northern Pacific Railroad Company, on which the costs of survey had not been paid and for which no patents had been issued, it was his duty to proceed to sell notwithstanding those facts; and that when the title of the purchaser at the tax sale failed, by reason of the lands not being subject to taxation, the county was not liable for the purchase money.31 A State may, through its legislature, make a valid contract as to taxation with a corporation which the latter can enforce; and the Supreme Court of the

30 Gulf & S. I. R. Co. v. Hewes, 183 U. S. 66, 22 Sup. Ct. 26, 46 L. ed. 86.

The Supreme Court of the United States is bound by the construction put by the highest court of the State of Kentucky upon its statutes, relating to exemptions from taxation of property used for "public purposes," however much it may doubt the soundness of the interpretation. Covington v. Kentucky, 173 U. S.

231, 43 L. ed. 679, 19 Sup. Ct. 383 (a case of exemption of "the said reservoir or reservoirs, machinery, pipes, mains and appurtenances, with the land on which they were situated" which the city of Covington was by that act authorized to acquire and construct; also a question of repeal, of contract and charter rights).

31 Stutsman. County v. Wallace, 142 U. S. 293, 12 Sup. Ct. 227, 35 L. ed. 1018.

United States is not, under the rule generally applicable as to the binding effect of decisions of the Supreme Court of the State construing its statutes, concluded by the decisions of that court as to whether such a contract exists, the extent of its terms and whether any subsequent law has impaired its obligation. But where the Supreme Court of the State sustains the validity of the statute from which a contract is claimed, the Federal Supreme Court follows that decision and determines what the contract is.32 When a contract is asserted and the Constitution of the United States is invoked to protect it, all of the elements which are claimed to constitute it are open to examination and review by the Federal Supreme Court; and also all that which is claimed to have taken it away, and the writ of error will not be dismissed.33

§ 279. Same Subject-Instances Continued-Impairment of Obligation of Contract-Fourteenth Amendment. While the Federal Supreme Court is not bound by the construction placed by the state court upon statutes of that State when the impairment of the contract clause of the Constitution is invoked, yet when the true construction of a particular statute is not free from doubt considering former legislation of the State upon the same subject, the Federal court has determined that it will best perform its duty in such case by following the decisions of the state court upon the precise question, although doubts as to its correctness may have been uttered by the same court in some subsequent case.34 It is also decided that although decisions of the highest court of a State are not binding on the Federal Supreme Court in determining whether a contract was made by legislative action of that State which is entitled to protection under the impairment of obligation clause of the Federal constitution, it

"Powers v. Detroit, Grand Haven & M. Ry. Co., 201 U. S. 543, 26 Sup. Ct. 556, 50 L. ed. 860.

"Citizens' Bank v. Parker, 192 U. S. 73, 48 L. ed. 346, 24 Sup. Ct.

181 (taxation; banks; exemption; construction; license taxes; obligation of contracts).

34 Waggoner v. Flack, 188 U. S. 595, 47 L. ed. 609, 23 Sup. Ct. 345.

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