914

in cases where they apply.' In order to maintain the argument, it is essential, therefore, to hold that the word 'laws' in this section includes within the scope of its meaning the decisions of the local tribunals. In the ordinary use of language it will hardly be contended that the decisions of courts constitute laws. They are, at most, only evidence of what the laws are, and are not of themselves laws. They are often re-examined, reversed, and qualified by the courts themselves whenever they are found to be defective or ill-founded or otherwise incorrect. . . . And we have now not the slightest difficulty in holding that this section, upon its true intendment and construction, is strictly limited to local statutes and local usages of the character before stated, and does not extend to contracts and other instruments of a commercial nature, the true interpretation and effect whereof are to be sought, not in the decisions of the local tribunals, but in the general principles and doctrines of commercial jurisprudence. Undoubtedly, the decisions of the local tribunals upon such subjects are entitled to, and will receive, the most deliberate attention and respect of this court; but they cannot furnish positive rules, or conclusive authority, by which our own judgments are to be bound up and governed. The law respecting negotiable instruments may be truly declared, in the language of Cicero, adopted by Lord Mansfield in Luke v. Lyde, 2 Burr. R. 882, 887, to be in a great measure, not the law of a single country only, but of the commercial world. 'Non erit alia lex Romae, alia Athenis, alia nunc, alia post hoc, sed et apud omnes gentes, et omni tempore, una eademque lex obtinebit.'

"It becomes necessary for us, therefore, upon the present occasion, to express our own opinion of the true result of the commercial law upon the question now before us. And we have no hesitation in saying, that a pre-existing

14-See post, § 43.

debt does constitute a valuable consideration in the sense of the general rule already stated, as applicable to negotiable instruments."

The doctrine established by this case has been consistently applied by the Supreme Court in later cases, but it has nevertheless been severely criticized, and, it seems, with justice, as an unwarranted and regrettable assumption of power by the Supreme Court.15 As a consequence of this doctrine different rules of law may prevail in the federal and state courts.16

§ 8. Other authorities. In the same year (1842) in reviewing the judgment of the United States Circuit Court for the district of Rhode Island in a suit on a fire insurance policy the Supreme Court, by Story, J., said: 17

"We have not thought it necessary upon this occasion to go into an examination of the cases cited from the New York and Massachusetts reports. . . . The questions under our consideration are questions of general commercial law and depend upon the construction of a contract of insurance, which is by no means local in its character or regulated by any local policy or customs. Whatever respect, therefore, the decisions of state tribunals may have on such a subject, and they certainly are entitled to great respect, they cannot conclude the

15 See Carson, History of Supreme Court, 319. Mr. Justice Mitchell in Forepaugh v. Delaware, etc., R. Co., 128 Pa. St. 228, remarks that since the unfortunate mis-step that was made in the opinion in Swift v. Tyson, the courts of the United States have persisted in the recognition of a mythical commercial law, and have professed to decide so-called commercial questions by it, in entire disregard of the law of the state where the question arose. 16-Pennsylvania R. Co. V. Hughes, 191 U. S. 477.

In restating the rule that a federal court is not bound to follow the decisions of the state courts in matters of general commercial law, Mr. Justice Miller in Bucher v. Cheshire R. Co., 125 U. S. 555, 583, said: "There is, therefore, a large field of jurisprudence left in which the question of how far the decisions of state courts constitute the law of those states is an embarrassing one."'

17-Carpenter v. Providence Washington Insurance Co., 16 Pet. 495.

judgment of this court. On the contrary, we are bound to interpret this instrument according to our own opinion its true intent and objects, aided by all the lights which can be obtained from all external sources whatsoever, and if the result to which we have arrived differs from that of these learned state courts, we may regret it, but it cannot be permitted to alter our judgment."

In a leading common carrier case the plaintiff was injured while traveling on a stock train of the defendant railroad from Buffalo to Albany with a shipment of his cattle. The injury was caused by the negligence of the defendant but the plaintiff was riding on a drover's pass containing a provision exempting the carrier from liabil ity for personal injuries though caused by negligence. The New York courts held such contracts valid, but the Supreme Court refused to follow this ruling.18 In affirming a judgment for the plaintiff, Bradley, J., said:

“On a question of general commercial law, the federal courts administering justice in New York have equal and co-ordinate jurisdiction with the courts of that state. And in deciding a case which involves a question of such importance to the whole country, a question on which the courts of New York have expressed such diverse views, and have so recently and with such slight preponderancy of judicial suffrage, come to the conclusion that they have, we should not feel satisfied without being able to place our decision upon grounds satisfactory to ourselves, and resting upon what we consider sound principles of law."

Again, in another case,19 on the question as to whether certain property had been dedicated to public use, the Supreme Court held that it was not bound by a decision of the state court that the property had been so dedicated. In so holding Mr. Justice Miller said: "This question of dedication, on which the whole of that case turned, was 19-Yates v. Milwaukee, 10 Wall.

18-Railroad Company v. Lockwood, 17 Wall. 357.

497.

one of fact to be determined by ascertaining the intention of those who laid out the lots from what they did and from the application of general common law principles to their acts. This does not depend upon state statute or local state law. The law which governs the case is the common law, on which this court has never acknowledged the right of the state courts to control our decisions, except, perhaps, in a class of cases where the state courts have established, by repeated decisions, a rule of property in regard to land titles peculiar to the state.'

66

The doctrine of the Supreme Court as to its jurisdiction in cases of this character is stated by the court in a recent case as follows: 20 Since the decision in Swift v. Tyson, 16 Pet. 1, 19, it has been the accepted doctrine of this court that, in respect to the doctrines of commercial law and general jurisprudence the courts of the United States will exercise their own independent judgment, and in respect to such doctrines will not be controlled by decisions. based upon local statutes or local usage, althought if the question is balanced with doubt, the courts of the United States, for the sake of harmony, will lean to an agreement of views with the state courts."

Among the subjects which have been held to fall within the term "general commercial law" or "general jurisprudence" within the doctrine now under consideration are questions of insurance,21 or negotiable instruments,22 or negligence resulting in personal injuries,23 or questions affecting the relations of common carriers (not necessarily interstate) and their employees,24 or passen

20-Presidio County V. NoelYoung Bond Co., 212 U. S. 58.

21-Carpenter v. Providence Washington Ins. Co., 16 Pet. 495; Aetna Life Ins. Co. v. Moore, 231 U. S. 543.

22-Swift v. Tyson, 16 Pet. 1; Watson v. Tarpley, 18 How. 517; Oates v. National Bank, 100 U. S.

239; Railroad Co. v. National Bank, 102 U. S. 14.

23-City of Chicago v. Robbins, 2 Black 418.

24-Hough v. Railway Co., 100 U. S. 213; Balt. & Ohio R. Co. v. Baugh, 149 U. S. 368.

gers, 25 or shippers,26 or questions as to the validity of municipal bonds.27

§ 9. Classification of federal common law. On the whole, the tendency seems to be rather to extend than to restrict the range of the independent common-law jurisdiction of the federal courts in matters of general interest, and thus the body of what may very properly be termed "federal common law" is being steadily enlarged. We conclude that there is a national common law in at least two general classes of cases:

(1) Cases involving matters of general interest not placed by the Constitution within the federal legislative power and to which, by reason of the nature of the subject or the character of the parties, the law of a state could not properly apply.

(2) Cases connected with subjects placed by the Constitution within federal legislative control exclusively but in respect to which Congress has not legislated. These cases must be governed by a federal common law or be subject to no law at all, which clearly cannot be permitted.

A curious situation arises in connection with cases of the first class involving subjects not within the federal legislative power. As to these cases there exists a common law which cannot be altered or affected by legislation. In commenting upon the rule of the federal courts to formulate their own rule as to questions of general jurisprudence or commercial law, a recent able writer says: "The fundamental objection to this rule of the court is that as Congress cannot under the Constitution legislate on any other than a federal subject matter, the

25-Railroad Company v. Lockwood, 17 Wall. 357; Lake Shore, etc., R. Co. v. Prentice, 147 U. S. 101.

26-Myrick v. Michigan Cent. R. Co., 107 U. S. 102; Liverpool, etc., Steam Co. v. Phoenix Insurance Co., 129 U. S. 327.

27-Supervisors v. Schenck, 8 Wall. 772; Pana v. Bowler, 107 U. S. 529; Presidio County v. NoelYoung Bond Co., 212 U. S. 58.