Railroad Company v. McClure - 77 U.S. 511 (1870)
U.S. Supreme Court
Railroad Company v. McClure, 77 U.S. 10 Wall. 511 511 (1870)
Railroad Company v. McClure
77 U.S. (10 Wall.) 511
1. No jurisdiction exists in this Court under the 25th section of the Judiciary Act to review a decision of the highest court of the state maintaining the validity of a law which it has been set up "impairs the obligation of a contract" when the law set up as having this effect was in existence when the alleged contract was made and the highest state court has only decided that there was no contract in the case.
2. A constitution of a state is in this case admitted to be a "law" within the meaning of that clause of the Constitution of the United States which ordains that "No state shall pass any law impairing the obligation of contracts."
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 reexamined 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.