6 S.Ct.

413
116 U.S. 356
29 L.Ed. 633

ANDERSON, Ex'r, etc.,

v.
TOWNSHIP OF SANTA ANNA, IN DE WITT Co., ILLINOIS.
Filed January 4, 1886.

Mr. Justice HARLAN, after stating the facts in the foregoing language,
delivered the opinion of the court:

This is an action to recover from the township of Santa Anna, established under
the general township organization laws of Illinois, the amount of certain
negotiable bonds, with interest coupons attached, signed by its supervisor and
clerk, and purporting to have been issued by it on the first day of October,
1867, 'under and by virtue of a law of the state of Illinois, entitled 'An act to
amend the articles of association of the Danville, Urbana, Bloomington & Pekin
Railroad Company, and to extend the powers of and confer a charter upon the
same,' approved February 28, 1867, and in accordance with the vote of the
electors of said township, at the special election held July 21, 1866, in
accordance with said act.' Each bond also recites that the faith of the township
is 'pledged for the payment of said principal sum and interest.' The circuit court
sustained a demurrer to the declaration, and amended declaration, and gave
judgment for the township.

The act of February 28, 1867, empowered the railroad company to locate and
construct a railroad from Pekin, in Tazewell county, through, or as near as
practicable, certain named towns to the eastern boundary of the state of Illinois.
For the purpose of aiding in its construction, authority was given to
incorporated towns or townships in counties acting under the township organ
zation law, along the route of the road, to subscribe to the capital stock of the
company in any sum not exceeding $250,000. By the thirteenth section of the
act it is provided:

'Sec. 13. No such subscription shall be made until the question has been
submitted to the legal voters of such incorporation, town, or township in which

the subscription is proposed to be made; and the clerk of each of said towns or
townships is hereby required, upon the presentation of a petition signed by at
least ten citizens, who are legal voters and tax-payers of such town or township
for which he is clerk, and in which petition the amount proposed to be
subscribed shall be stated, to post up notices in at least three public places in
each town or township; which notice shall be posted not less than thirty days
before the day of holding such election, notifying the legal voters of such town
or township to meet at the usual place of holding elections in such town or
township, or some other convenient place named in such notice, for the purpose
of voting for or against such subscription: provided, that where elections may
have already been held, and the majority of the legal voters of any township or
incorporated town were in favor of a subscription to said railroad, then and in
that case no other election need be had, and the amount so voted for shall be
subscribed as in this act provided; and such elections are hereby declared to be
legal and valid, as though this act had been in force at the time thereof and all
the provisions hereof had been complied with.'
4

The pleadings allege that on the twenty-first of July, 1866, the township of
Santa Anna, through which the road passed, 'held a special election upon the
question of subscribing the sum of $50,000 to the capital stock of said Danville,
Urbana, Bloomington & Pekin Railroad Company, at which said election a
majority of the legal voters of said township voted for and were in favor of a
subscription to the capital stock of said railroad company, by the said
township,' of the said sum; that, on the first of October, 1867, in pursuance of
said vote, and of said act of February 28, 1867, the then supervisor of the
township subscribed, in its name, the sum of $50,000, receiving from the
railroad company, for the township, proper certificates of stock, and, in
connection with the township clerk, and in payment for such stock, executing
and delivering to the company the bonds and coupons in suit; that the township,
for nine consecutive years, regularly and annually assessed taxes to meet the
interest on said bonds, and paid the same over without objection; that on the
first day of December, 1868, the plaintiff purchased the bonds in suit at their
par value from one Tiernan, to whom they had been sold by the company; that
on the first Monday of Septemeber, 1869, and subsequently, the township, by
its proper officers, participated as a stockholder in sundry meetings of the
company's stockholders; that on the twenty-eighth of October, 1871, its then
supervisor caused the bonds to be registered in the office of the auditor of
public accounts of Illinois, who indorsed on each bond his certificate to the
effect that it had been registered in his office pursuant to the act of April 16,
1869, to fund and provide for paying the railroad debts of counties, townships,
cities, and towns; and that on the first day of July, 1874, the township
exchanged this stock for a like amount of stock in another corporation, the

Indianapolis, Bloomington & Western Railroad Company, which latter stock,

during the time the township has held and owned it, has been worth as much as
50 per cent, of its par value.
5

The record does not disclose the particular ground upon which the circuit court
sustained the demurrer and gave judgment for the township; but we cannot
understand how that result was possible, except upon the hypothesis that the act
of February 28, 1867, legalizing elections previously held, at which a majority
of the legal voters of a township declared in favor of a subscription to the stock
of this company, was unconstitutional. But the constitutionality of that very
statute, in respect of the clause now before us, was directly sustained by this
court in St. Joseph Tp. v. Rogers, 16 Wall. 644, 663. The question there was as
to the validity of bonds issued by a township on the first of October, 1867, to
the Danville, Urbana, Bloomington and Pekin Railroad Company, under the
authority of the before-mentioned act of February 28, 1867, and in accordance
with a popular vote at an election held in August, 1866. It was there contended
that the act was unconstitutional and void, as creating a debt for a municipality
against its will expressed in a legal manner. There, as here, the election referred
to in the bonds was held without authority of law. But the court, speaking by
Mr. Justice CLIFFORD, said that, according to repeated decisions of the
supreme court of Illinois and of this court, defective subscriptions of the kind
there made 'may, in all cases, be ratified where the legislature could have
originally conferred the power;' citing, among other cases, Cowgill v. Long, 15
Ill. 203, and Keithsburg v. Frick, 344 Ill. 405.

In Cowgill v. Long, 15 Ill. 202, it appears that a statute of Illinois authorized the
legal voters of any school-district to meet together at a certain time in any year,
and determine by vote whether a tax should be levied for the support of
common schools, for building and repairing school-houses, or for other school
purposes. The inhabitants of a district held an election and voted a tax for the
purpose of erecting a school-house. The tax was assessed and steps were taken
for its collection; but, as the election was not held at the time directed by the
statute, certain tax-payers, whose property was levied on and was about to be
sold, instituted a suit to enjoin the sale. Pending that suit the legislature passed
an act declaring the vote and tax 'to be good, valid, and effectual in law and in
equity,' and legalized what had been done by the local officers in reference to
the assessment of the tax. The court held that although the tax was voted at a
time not authorized by law, and was not so certified as to become a valid tax, 'it
was clearly competent for the legislature to remedy those defects while the tax
remained uncollected.' 'Laws of this character,' said Chief Justice TREAT,
delivering the unanimous opinion of the court, 'are often passed to secure the
collection of taxes defectively levied, and there can be no serious objections to

their validity.'
7

In Keithsburg v. Frick, 34 Ill. 421, one the questions presented was as to the
validity of an act of 1857, giving a special charter to the town of Keithsburg,
and conferring upon it authority to subscribe stock to a certain railroad
company, and at the same time legalizing and confirming a previous
subscription to the stock of the same corporation by the town while acting
under the general incorporation law for towns and cities. The court, speaking
by Mr. Justice BREESE, said: 'If the subscription was made under the
organization allowed by the general incorporation law of 1849, the seventeenth
section of the act of 1857 legalizes and confirms it. The subscription, therefore,
was good, if made under the act of 1857 as an original subscription under the
second section, or as a subscription made under the act of 1849, confirmed as it
is by the seventeenth section of the act of 1857. The bonds may be regarded as
issued by the old corporation, confirmed by the new act, or as a new issue
under the second section of the act of 1857.' In Schofield v. Walkins, 22 Ill. 66,
73, one of the questions was as to the constitutionality of a statute which
legalized the acts and proceedings of certain school-district trustees in uniting
districts and levying and collecting taxes for building houses, and for the
support of schools therein, and provided that all proceedings may be had in the
same manner as if those proceedings had been strictly regular and legal. The
court said, by WALKER, J., that there could be no doubt that 'the legislature
have the power to form a school-district, or may legalize the acts of officers in
attempting to form a district, so as to render such district legal; * * * and the
power to cure irregularities in the manner of levying a tax is equally undoubted,
and, so far as this tax was levied for the purposes specified in the act, there is
no doubt that the levy is thereby made valid.'

These cases were all determined before the bonds in suit were issued. While
they are not analogous in every respect to the one before us, they seem to rest
upon the principle that the legislature, when not restricted by the constitution,
may, by retroactive statutes, legalize the unauthorized acts and proceedings of
subordinate municipal agencies, where such acts and proceedings would have
been valid if done under legislative sanction previously given. The decision in
St. Joseph Tp. v. Rogers only gave effect to principles announced by the state
court prior to the issuing of the bonds. If, according to the law of Illinois, as
declared by its highest court at the time the bonds in suit were issued, the act of
February 28, 1867, was a valid exercise of legislative power, the rights of the
purchasers or holders could not be affected merely by subsequent change of
decision; for it is the long-established doctrine of this court from which, as said
recently in Green Co. v. Conness, 109 U. S. 105, S. C. 3 Sup. Ct. Rep. 69, we
are not disposed to swervethat, where the liability of a municipal corporation

upon negotiable securities depends upon a local statute, the rights of the parties
are to be determined according to the law as declared by the state courts at the
time such securities were issued. In Douglas v. County of Pike, 101 U. S. 677,
the chief justice said: 'After a statute has been settled by judicial construction,
the construction becomes, so far as contract rights are concerned, as much a
part of the statute as the text itself, and a change of decision is, to all intents and
purposes, the same in effect on contracts as an amendment of the law by means
of a legislative enactment.' See, also, County of Ralls v. Douglas, 105 U. S.
732; Olcott v. Supervisors, 16 Wall. 678; City v. Lamson, 9 Wall. 477, 485;
Boyd v. Alabama, 94 U. S. 645; Taylor v. Ypsilanti, 105 U. S. 71; Thompson v.
Lee Co., 3 Wall. 330; Brown v. Mayor, 63 N. Y. 239, 244; Cooley, Const. Lim.
(4th Ed.) 474, 477; Dill. Mun. Corp. 46.
9

If, however, we are in error in our interpretations of the decisions in Cowgill v.

Long, Schofield v. Walkins, and Keithsburg v. Frick, it results that when the
bonds were executed there was no decision of the state court in reference to the
power of the legislature to enact the statute of February 28, 1867. In that case
the duty of this court is to determine, upon its independent judgment, what was
the law of Illinois when the rights of the parties accrued. In Burgess v.
Seligman, 107 U. S. 33, S. C. 2 Sup. Ct. Rep. 10, the court had occasion to reexamine all its prior adjudications concerning the obligation of the federal
courts to follow the decisions of the state courts upon questions of local law.
Mr. Justice BRADLEY, speaking for the whole court, after observing that the
federal courts had an independent jurisdiction in the administration of state
laws, co-ordinate with and not subordinate to that of the state courts, and are
bound to exercise their own judgment as to the meaning and effect of these
laws, said: 'So, when contracts and transactions have been entered into, and
rights have accrued thereon, under a particular state of the decisions, or where
there has been no decision of the state tribunals, the federal courts properly
claim the right to adopt their own interpretation of the law applicable to the
case, although a different interpretation may be adopted by the state courts after
such rights have accrued. But even in such cases, for the sake of harmony and
to avoid confusion, the federal courts will lean to an agreement of views with
the state courts if the question seems to be balanced with doubt.' Any other rule,
it was further said, would defeat 'the very object of giving to the national courts
jurisdiction to administer the laws of the states in controversies between
citizens of different states.'

10

Assuming, then, for the purposes of this case, that the question of legislative
power as here presented had not, when the bonds in suit were issued, been
finally determined by the state court, we perceive no reason to doubt the
correctness of the decision upon this point in St. Joseph Tp. v. Rogers. It is not

claimed that the constitution of Illinois, in terms, forbade retrospective

legislation. But the statute in question is supposed to be obnoxious to that
clause which provides that 'the corporate authorities of counties, townships,
school-districts, cities, towns, and villages may be vested with power to assess
and collect taxes for corporate purposes.' Numerous decisions of the state court,
to which our attention was called in other cases, construe that provision as
defining, not simply the class of municipal officers upon whom the power of
taxation, for local purposes, may be conferred, but the purposes for which that
power may be exerted. Those decisions are to the effect that, within the
meaning of the constitution, the corporate authorities of a township, like Santa
Anna, are the electors; and that while the construction of a railroad, through or
near the township, would be a corporate purpose within the meaning of that
instrument, a debt for that object could not be imposed upon it without the
consent of its corporate authorities,that is, without the consent of the electors.
These principles fall far short of sustaining the proposition that the curative
clause of the act of February 28, 1867, was unconstitutional; for the legislature
did not, in any just sense, impose a debt upon Santa Anna township against the
will of its corporate authorities, the electors. The act embraces only townships
which, by a majority of their legal voters, at an election previously held, had
declared for a subscription. That such majority was given at an election held by
the township in the customary form is averred in the declaration and is
admitted by the demurrer. The curative act only gave effect to the declared will
of the electors. As the constitution of the state did not provide any particular
mode in which the corporate authorities of a township should manifest their
willingness or desire to incur a municipal debt for railroad purposes, we
perceive no reason why the action of the majority of legal voters, at an election
held in advance of legislative action, might not be recognized by the legislature,
and constitute the basis of its subsequent assent to the creation of such
indebtedness, and its ratification of what had been done. In Grenada Co., etc.,
v. Brogden, 112 U. S. 271, S. C. 5 Sup. Ct. Rep. 125, where somewhat the
same question was involved, we said: 'Since what was done in this case by th
constitutional majority of qualified electors and by the board of supervisors of
the county would have been legal and binding upon the county, had it been
done under legislative authority previously conferred, it is not perceived why
subsequent legislative ratification is not, in the absence of constitutional
restrictions upon such legislation, equivalent to original authority.' See, also,
Thompson v. Perrine, 103 U. S. 815; Ritchie v. Franklin, 22 Wall. 67;
Thompson v. Lee Co., 3 Wall. 327; City v. Lamson, 9 Wall. 477, 485; Campbell
v. City of Kenosha, 5 Wall. 194; Otoe Co. v. Baldwin, 111 U. S. 15; S. C. 4
Sup. Ct. Rep. 265. The same principle was announced by the supreme court of
Illinois in a very recent case, (United States Mortgage Co.. v. Gross, 93 Ill.
494,) involving the constitutionality of a statute of Illinois which was
retrospective in its operation. 'Unless,' said the court in that case, 'there be a

constitutional inhibition, a legislature has power, when it interferes with no

vested right, to enact retrospective statutes to validate invalid contracts or to
ratify and confirm any act it might lawfully have authorized in the first
instance.' It cannot be denied that the legislature could lawfully have authorized
a subscription by Santa Anna township to the stock of this road, upon the
assent, in some proper form, of a majority of its legal voters. The act of 1867
interfered with no vested right of the township; for as an organization entirely
for public purposes, it had no privileges or powers which were not subject,
under the constitution, to legislative control. The statute did nothing more than
to ratify and confirm acts which the legislature might lawfully have authorized
in the first instance.
11

We infer from the arguments before us that the circuit court felt obliged by the
decision in Township of Elmwood v. Marcy, 92 U. S. 289, to hold the act of
February 28, 1867, to be unconstitutional. In that case the main question was as
to the liability of Elmwood township upon bonds issued, in its name, by its
supervisor and town clerk, under the authority, not of that act, but of one passed
April 17, 1869, which legalized and confirmed, and declared to be binding
upon the township, an additional subscription to the stock of the Dixon, Peoria
& Hannibal Railroad Company, pursuant to the vote of a majority of legal
voters of the township at an election held at a time when the town had
exhausted its power to subscribe. The bonds then in suit were issued on the
twenty-seventh of April, 1869. The majority of the court in that case held the
act of April 17, 1869, to be unconstitutional entirely upon the authority of
Harward v. St. Clair Drainage Co., 51 Ill. 130; People v. Mayor, Id. 17;
Hessler v. Drainage Com'rs, 53 Ill. 105; Lovingston v. Wider, Id. 302; Marshall
v. Silliman, 61 Ill. 218; and Wiley v. Silliman, 62 Ill. 170. We have already seen
that St. Joseph v. Rogers, ubi supra, maintained the validity of the very act now
before us, upon the authority, as well of the then existing law of the state as
declared by its highest court, as of our own decisions upon the general question
of the power of the legislature to legalize that which it might have originally
authorized. Although the decision in that case was cited by counsel in Elmwood
v. Marcy, the court, in the latter case, did not refer to it or overrule it, but
applied to the Elmwood bonds the principles announced in the later decisions of
the state court. While the courts of the United States accept and apply the
construction of a state constitution or of a local statute, upon which the rights of
parties depend, which has been fixed by the course of decisions in the state
court, it is the settled doctrine of this court that rights accruing under one
construction will not be lost merely by a change of opinion in the state court;
and where such rights have accrued, before the state court has announced its
construction, the federal courts, although leaning to an agreement with the state
court, must determine the question upon their own independent judgment. If the

decisions of the state court, commencing with Harward v. St. Clair Drainage
Co., would, if applied here, require an affirmance, we cannot depart from the
long-established doctrine which makes it our duty to determine the rights of
parties, where those rights depend upon the local law, according to that law as
judicially declared at the time such rights accrued, or, in the absence of any
such declaration, according to the law as, in our judgment, it then was.
12

We are of opinion that the demurrer should have been overruled. The judgment
is reversed, with directions for further proceedings in conformity with this
opinion.