VAIL v. TERRITORY OF ARIZ. 207 U.S. 201 (1907)

[207 U.S. 201, 202]   Messrs. Samuel L. Kingan and William Herring for appellants.

[207 U.S. 201, 203]   Messrs. William c. Prentiss, Horace F. Clark, and E. S. Clark for appellee.

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 (Ariz. Laws 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 , 39 L. ed. 67, 15 Sup. Ct. Rep. 22. The act was held to be in violation of the restrictions imposed upon territorial legislatures by U. S. Rev. Stat. 1889, as amended by the act of Congress of June 8, 1878, chap. 168 (20 Stat. at L. 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 , 43 L. ed. 498, 19 Sup. Ct. Rep. 183, where the different acts are fully stated. We sustained it, and adjudged that it was the duty of the loan commissioners to [207 U.S. 201, 204]   refund the bonds. In Murphy v. Utter, 186 U.S. 95 , 46 L. ed. 1070, 22 Sup. Ct. Rep. 776, 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 R. Co. 200 U.S. 273 , 50 L. ed. 477, 26 Sup. Ct. Rep. 252. 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 [207 U.S. 201, 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 affirmed.