In those cases coming to the federal Supreme Court by way of appeal from a lower federal court there is no question of federal jurisdiction, and in them, the federal courts determine for themselves which, if any, of the decisions of the state courts dealing with the state laws or with principles involved they will follow.

In this class of cases, the federal jurisdiction over which is based upon the diversity of citizenship of the parties thereto, the doctrine is well established that where a state court has reversed its ruling as to the state law governing a case, the federal courts will not follow the later decision, when to do so will make it neces-sary to hold void or to impair the obligation of contracts previously entered into. In other words the first construction is treated as though it becomes a part of the law or constitutional provision, and the later and differing construction as a law in amendment or appeal thereof. Thus in Burgess v. Seligman72 the court say. "When contracts and transactions have been entered into, and rights have accrued thereon under a particular state of the decisions, . . . the federal courts properly claim the right to adopt their own interpretation of the law applicable to the case, although a different interpretation may be adopted by the state courts after such rights have accrued."

Originally the Supreme Court went only so far as to protect a contract entered into under a law which had previously been held valid by the state courts, as against a later decision holding the law unconstitutional and void." Of late, however, as we shall see, the court has taken the further step of protecting contracts entered into under a law before its constitutionality has been upheld in the highest courts of the State; the argument necessarily being that a state legislative act is, even in advance of judicial affirmation, presumptively valid, and, therefore, that a later ruling of the courts to the effect that the law is invalid, operates to impair or destroy the obligation of the contracts which those entering into them have a right, at the time, to believe are legally enforceable agreements.

In these cases it is to be observed that the doctrine of the Supreme Court is not only to hold that the obligation clause warrants a refusal upon the part of the federal courts to follow the constructions given by state courts to their own state laws, but also to hold that a judicial decision is a "law" within the meaning of the provision of the federal Constitution that no State shall "pass any law impairing the obligation of contracts."