VAIL V. ARIZONA, 207 U. S. 201 (1907)

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U.S. Supreme Court

Vail v. Arizona, 207 U.S. 201 (1907)

Vail v. Arizona

No. 67

Argued November 15, 1907

Decided December 2, 1907

207 U.S. 201




Stare decisis is a wholesome doctrine, and, while not of universal application, is especially applicable to decisions affirming the validity of securities authorized by statute. Such decisions should be regarded as conclusive even as to those not strictly parties, so as to prevent wrong to innocent holders who purchased in reliance thereon.

Where bonds of a county have been declared valid in a suit of which the county had knowledge, and was heard although not a party thereto, while the question may not be res judicata as against the county in a subsequent suit in which it is a party, under the doctrine of stare decisis, the question should no longer be considered an open one.

The decisions of this Court in Utter v. Franklin, 172 U. S. 416, and Murphy v. Utter, 186 U. S. 95, adhered to under the doctrine of stare decisis.

85 P. 652 affirmed.

The facts are stated in the opinion.

Page 207 U. S. 203

MR. JUSTICE BREWER delivered the opinion of the Court.

This was an application by the appellee, the Territory of Arizona, for a mandamus to compel the appellants, the supervisors of Pima County, to levy a tax to pay the interest due on certain bonds. The facts are these: in 1883, an act was passed by the territorial legislature (Laws Ariz. 1883, p. 61), directing Pima County to exchange its bonds for those of the Arizona Narrow Gauge Railroad Company. The amount of the bonds and the conditions of exchange were specified in the act. One hundred and fifty thousand dollars of bonds were so exchanged. Pima County denied its liability on the bonds, refused to pay the interest coupons, and an action was brought thereon, which finally reached this Court. Lewis v. Pima County, 155 U. S. 54. The act was held to be in violation of the restrictions imposed upon territorial legislatures by § 1889, Rev.Stat., as amended by the Act of Congress of June 8, 1878, c. 168 (20 Stat. 101), and the bonds were adjudged void. Subsequently, by acts of Congress and the territorial legislature, provision was made for the issue of territorial, in exchange for these, bonds, and for the payment of the principal and interest thereof by the county. The validity of this legislation came before us in Utter v. Franklin, 172 U. S. 416, where the different acts are fully stated. We sustained it, and adjudged that it was the duty of the loan commissioners to

Page 207 U. S. 204

refund the bonds. In Murphy v. Utter, 186 U. S. 95, the ruling was reaffirmed, and it was held that neither a change in the personnel of the loan commission nor an act of the Legislature of Arizona abolishing the commission put an end to the duty of refunding.

The refunding having been made, the territory thereafter called upon Pima County to pay the interest which the territory had paid on the funded bonds. Upon its refusal to pay this, application was made to the supreme court of the territory, and it granted a mandamus, and from that decision the appellants have brought the case here. They challenge the validity of the refunding legislation, while the appellee contends that the matter is res judicata, or, if not, should, upon the doctrine of stare decisis, be regarded as foreclosed. In the two cases, 172 and 186 U.S., in which the validity of the refunding legislation was considered, Pima County was not nominally a party. The actions were brought by the holders of the bonds against the loan commission. Whether the county was technically bound by the decisions may be a question. It was heard by its attorney in the litigation, and was the party ultimately to be affected by the refunding. Gunter v. Atlantic Coast Line, 200 U. S. 273. But, if it be not so bound, still, under the doctrine of stare decisis, the question should no longer be considered an open one. The county had full knowledge of the entire litigation, having been a party in the first action and been represented by its attorney in the last two. Any defense which could be made to the refunding of the bonds and the validity of the refunding legislation could have been raised in the last cases. This Court considered every question that was presented, determined that the legislation was valid, and ordered that the bonds should be refunded. They have been refunded. They have gone into the channels of trade, and now, after many years -- for the case of Utter v. Franklin was decided in 1899 -- and when it is fair to presume that many have bought relying upon the conclusiveness of the adjudication by this Court, it might work a grievous wrong to overthrow those decisions and

Page 207 U. S. 205

hold the bonds void. Stare decisis is a wholesome doctrine. It is not of universal application, and there have been cases where a ruling, once made, was wisely changed, but when the decision is one affirming the validity of bonds, notes, or bills of a limited amount, the issue of which had been in terms authorized by statute, such decision should generally be held conclusive even as to those not strictly parties to the litigation, for otherwise, as we have said, much wrong might be done to innocent holders who bought in reliance upon the decision. We are of the opinion that the Supreme Court of Arizona was right, and its judgment is


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