The constitutional guaranty applies only to legislation subsequent to the contract and not to a state law in force at its inception ; Denny v. Bennett, 128 U. S. 489, 9 Sup. Ct. 134, 32 L. Ed. 491; Powell v. City of Madi son, 107 Ind. 106, 8 N. E. 31; if valid when made, under the constitution and laws of the state, as then declared by its highest court, it cannot subsequently be impaired by any legislative or judicial action. The su preme court has jurisdiction only when the legislation was subsequent and effect has been given to it by the judgment sought to be reviewed ; Louisiana v. New Orleans, 215 U. S. 170, 30 Sup. Ct. 40, 54 L. Ed. 144. This was the principle settled by the much discuss ed case of Gelpcke v. Dubuque, 1 Wall. (U. S.) 175, 17 L. Ed. 520, affirmed and enforced in Havemeyer v. Iowa County, 3 Wall. (U. S.) 294, 18 L. Ed. 38, where it was said that "the rule was established upon the most careful consideration."' What has come to be known as the doc trine of that case was first declared by Taney, C. J., in Ohio Lite Ins. & Trust Co. v. Debolt, 16 How. (U. S.) 416, 14 L. Ed. 997: "The sound and the true rule is that, if the con tract, when made, was valid by the laws of the state, as then expounded by all the de partments of its government and administer ed in its courts of justice its validity and ob ligation cannot be impaired by any subse quent act of the legislature of the state, or decision of its courts, altering the construc tion of the law." That case was decided in 1853. In 1864, the case of Gelpcke v. Dubuque, which pre sented the precise situation described by Taney, C. J., was decided. Municipal bonds had been issued in aid of railroads under acts which had been declared constitutional in seven decisions of the state supreme court, on the faith of which the bonds were pur chased; a later decision of the same court overruled the previous ones and declared the act unconstitutional, and, upon a case origi nating in a federal court, the supreme court declined to follow the Iowa decision and the bonds were held valid, upon the ground that a contrary decision would impair the obliga tion of the contract ; Gelpcke v. Dubuque, 1 Wall. (U. S.) 175, 17 L. Ed. 520.
This decision, the subject of much discus sion both in the courts and by legal writers, has not been construed to have the effect of treating a judicial decision in the state court as "law" within the constitutional inhibition. The doctrine of the case applies only where the state decision, which is considered as impairing the obligation of the contract, is based on the construction of a statute or a determination as to its constitutionality ; Ray v. Gas Co., 138 Pa. 591, 20 Atl. 1065, 12 L. R. A. 290, 21 Am. St. Rep. 922; Boyd v. Alabama, 94 U. S. 645, 24 L. Ed. 302 ; Balls County v. Douglass, 105 U. S. 728, 26 L. Ed. 957 ; Hill v. Hite, 85 Fed. 268, 29 G. C. A. 549, and note. The distinction is thus stated: "After a statute has been settled by judicial construction, the construction becomes, so far as contract rights acquired under it are concerned, as much a part of the statute as the text itself, and a change of decisions is, to all intents and purposes, the same in its effect on contracts as an amendment of the law by means of a legislative enactment;" Douglass v. County of Pike, 101 U. S. 677,
25 L. Ed. 968.
Again in Central Land Co. v:Laidley, 159 U. S. 103, 16 Sup. Ct. 80, 40 L. Ed. 91, it was said: "In order 'to come within the pro vision of the constitution . . . not only must the obligation of a contract have been impaired, but it must have been impaired by some act of the legislative power of the state, and not by a decision of its judicial depart ment only." This case decided that the su preme court would not review on writ of error the decision of a state court on the form of acknowledgment of a married wo man's deed of real estate under the code of that state, which was a re-enactment of the Virginia code. The case clearly expounds what had become well-settled principles, which have been frequently repeated, and it was restated in National Mutual Bldg. & Loan Ass'n v. Brahan, 193 U. S. 635, 24 Sup. Ct. 532, 48 L. Ed. 823.
The judgment of a state court declaring a contract invalid does not impair the obli gation of the contract, unless such judgment gives effect to some provision of the state constitution, or some act which is claimed by the unsuccessful party to impair the ob ligation of the contract in question ; Lehigh Water Co. v. Easton, 121 U. S. 388, 7 Sup. Ct. 916, 30 L Ed.. 1059. In such cases, the supreme court of the United States does not accept as conclusive the judgment of the state court as to the non-impairment of the contract ; Wright v. Nagle, 101 U. S. 791, 25 L. Ed. 921; Louisville & N. R. Co. v. Palmer, 109 U. S. 244, 3 Sup. Ct. 193, 27 L. Ed. 922.
Where the supreme court of the state had affirmed the constitutional validity of a leg islative act to authorize contracts for serv ices to the public, and a contract had been entered into and services performed, the con tractor was entitled to receive his compen sation notwithstanding a subsequent decision that the act was unconstitutional; Thomas v. State, 76 Ohio St. 341, 81 N. E. 437, 10 L R. A. (N. S.) 1112, 118 Am. St. Rep. 884. The decision is based largely on Douglas v. Pike County, 101 U. S. 677, 25 L. Ed. 968 ; which in Central Land Co. v. Laidley, 159 U. S. 103, 16 Sup. Ct. 80, 40 L. Ed. 91, is said to have been based upon the doctrine that in actions originating in the federal courts the United States supreme court will, or at least, may adhere to the earlier decisions of the state court and refuse to adopt later ones when contracts have been entered into be fore the change and relying upon the former.
It is sometimes said that the doctrine thus apparently settled was departed from in what were known as the Elevated Railway Cases of New York, which came before the supreme court in Muhlker v. R. Co., 197 U. S. 544, 25 Sup. Ct. 522, 49 L. Ed. 872 ; and a subsequent case in which the Muhlker Case seemed to be modified, Sauer v. New York, 206 U. S. 536, 27 Sup. Ct. 686, 51 L. Ed. 1176.