U.S. Supreme Court
Taylor v. Ypsilanti, 105 U.S. 60 (1881)
Taylor v. Ypsilanti
105 U.S. 60
1. Under a statute of Michigan of March 22, 1869, authorizing cities to pledge their aid "by loan or donation, with or without conditions" in the construction of any railroad by a company organized under the laws of the state, the electors of a city voted to issue its bonds to aid such a company upon certain conditions, touching the eastern terminus of the road, and providing that if any citizen should subscribe and pay for stock in the company, the latter should deliver him such bonds therefor, and that the citizens should, within thirty days, have the right to subscribe for the stock to the amount of aid voted. The bonds were delivered to the company. Held that the conditions were not unauthorized by the statute, and constitute no defense to an action on the bonds.
2. The Court adheres to the ruling in Township of Pine Grove v. Talcott, 19 Wall. 666, and measures the rights and obligations of the parties under the statute in question as it was there enforced and as it was acted upon by all the departments of the state government at and before the time when the company earned the bonds by the performance of the prescribed conditions. The Court therefore declines to accept the subsequent adjudications of the Supreme Court of Michigan declaring the statute to be repugnant to the Constitution of the state.
3. The courts of the United States, in cases within their jurisdiction involving contract obligations and rights depending upon the laws of the state, will conform to the settled construction which the highest court of the state gave to those laws at the time when the rights accrued or the obligations were incurred.
The case is stated in the opinion of the Court.