Under the obligation clause no general power is given to the federal Supreme Court to review the decisions of state courts as to the proper construction to be given to the terms of a subsisting contract. In Lehigh Water Co. v. Easton54 the court say: "The argument in behalf of the company seems to rest upon the general idea that this court, under the statutes defining its appellate jurisdiction, may re-examine the judgment of the state court in every case involving the enforcement of contracts. But this view is unsound. The state court may erroneously determine questions arising under a contract which constitutes the basis of the suit before it; it may hold a contract void which in our opinion is valid; it may judge a contract to be valid which in our opinion is void; or its interpretation of the contract may in our opinion be radically wrong; but in neither of such cases would the judgment be reviewable by this court under the clause of the Constitution protecting the obligation of contracts against impairment by state legislation, and under the existing statutes defining and regulating its jurisdiction, unless that judgment, in terms or by its necessary operation, gives effect to some provision of the state Constitution, or some legislative enactment of the State, which is claimed by the unsuccessful party to impair the obligation of the particular contract in question."
The meaning to be given to a state law is primarily to be determined by the state courts, and, so long as only a question of state constitutional law is concerned, the meaning thus given is conclusive upon the federal courts. Thus, when a state statute is alleged to impair the obligation of a contract it is not the duty of the federal Supreme Court itself to construe the act and then to determine whether, as thus construed, it impairs the obligation of a contract; rather, its duty is to take the act as construed and applied by the courts of the State, and, upon that basis, to determine whether or not the obligation of contracts is impaired. The logic of this doctrine is apparent. Whatever may be the literal terms of a state law, if, in fact, it is not so construed by the state authorities as to work an impairment of contracts the inhibition of the obligation clause cannot be said to be violated.