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they cannot conclude the judgment of this court in such a case, and that this court is bound to interpret the instrument according to its own opinion of its true intent and objects.

Equally decisive views have often been expressed by this court in other cases, of which one deserves special notice. Preliminary to the point decided, the court very properly admitted that the Federal courts will pay due regard to the laws of the States and their construction by the State tribunals; but the court decided, Mr. Justice Harlan giving the opinion, that this court is not bound by the decisions of the State courts in determining a question of general commercial law; that such is the established doctrine of the court, so frequently announced as not to require any extended citation. of authorities in its support. Oates v. National Bank, 100 U. S. 239; Amis v. Smith, 16 Pet. 303, 314; Conkling's Treatise (5th ed.), 140.

Argument to show that the decisions of this court referred to contradict the decisions of the State court upon the matter in decision is quite unnecessary, as that is admitted. Nor is it correct to suppose that the leading case, contradicting the views of the State court, is unsupported to its full extent by other decisions of this court. Instead of that, the doctrines of that case were directly and fully reaffirmed in the following case, decided more than twelve years later. Watson v. Tarpley, 18 How. 517.

State legislation, as shown in that case, had prescribed regulations in respect to the protest of bills of exchange, and notice of their dishonor repugnant to the requirements of the law merchant; and this court held that the State regulations were not operative, and that the payee or indorsee of the bill, in spite of the State law, might enforce his rights in the Federal court, as defined and recognized by the decisions of this court. Reference was there made to the sentiments expressed by Lord Mansfield, that the maritime law was not the law of one country only, but of the commercial world; and the court decided that the commercial law was not circumscribed within any local limits, and that citizens resorting to the Federal tribunals for the ascertainment of their rights might well claim the benefit of the rules of the general commercial law. Six of the

justices of the court, including the Chief Justice, held the same views in the still later case, to which special reference is made. Goodman v. Simonds, 20 How. 343, 371.

Collaterals, previously held in that case, had been surrendered when the new arrangement was made, and the evidence showed an agreement for forbearance; and the court, in order to prevent a dissent, rested the case, so far as respected the question of consideration, upon those special facts; but it is deemed proper to state that two-thirds of the court entirely approved of the views of Mr. Justice Story, as expressed in Swift v. Tyson, and in his valuable works upon bills of exchange and promissory notes. Confirmation of the proposition that his views in that decision are correct is also derived from a note appended to the text of the third volume of Kent's Commentaries, by the distinguished author, in which he says that he is inclined to concur in that decision as the plainer and better doctrine. 3 Kent, Com. (12th ed.) 81; Cooley, Const. Lim. (4th ed.) 18.

State decisions, in respect to titles to real estate and transfers of property, usually furnish the rule of decision in the Federal courts, by virtue of the before-mentioned provision of the Judiciary Act; but the established practice is, that it does not apply, except in matters of a strictly local character; that is to say, to the positive statutes of the States and the interpretations of the same by their own tribunals, including rights and titles to things having a permanent locality, such as real property, and that it does not extend to questions of general commercial law, from which it follows that where any controversy arises as to the liability of a party to a bill of exchange, promissory note, or other negotiable paper, in one of the Federal courts, which is not determined by the positive words of a State statute, or its meaning as construed by the State courts, the Federal courts will apply to its solution the general principles of the law merchant, regardless of any local decision. 1 Daniel, Neg. Inst. (2d ed.) sect. 10.

Transactions of a commercial character extend throughout the civilized world, and it is well known that they are chiefly conducted through the medium of bills of exchange and other negotiable instruments. Uniformity of decision is a matter of

great public convenience and universal necessity, acknowledged by all commercial nations. Should this court adopt a principle of decision which when carried into effect would establish as many different rules for the determination of commercial controversies as there are States in the Union, it would justly be considered a public calamity, as it must necessarily depreciate our negotiable securities in all the foreign markets of the world where our merchants have commercial transactions.

Stable and immutable rules are necessary to give confidence to those who receive such securities in the usual course of business, when indorsed in blank, or made payable to bearer, so that if such a bill or note is made without consideration, or be lost or stolen, and afterwards be negotiated for value to one having no knowledge of such facts, in the usual course of business, his title shall be good, and he shall be entitled to collect the

amount.

Uniformity of decision in such cases is highly desirable, and these observations are sufficient to show that nothing is wanting to accomplish that great object but the concurrence of a few more of the State courts, of which none are more to be desired than the courts of New York and Pennsylvania. It is hoped that they will concur at no distant day.

For these reasons the conclusion is that the judgment should be affirmed.

MR. JUSTICE BRADLEY. I concur in the judgment rendered in this case, and in most of the reasons given in the opinion. But, in reference to the consideration of the transfer of the note as collateral security, I do not regard the obligation assumed by the indorsee (the bank), to present the note for payment and give notice of non-payment, as the only, or the principal, consideration of such transfer. The true consideration was the debt due from the indorsers to the indorsee, and the obligation to pay or secure said debt. Had any other

collateral security been given, as a mortgage, or a pledge of property, it would have been equally sustained by the consideration referred to; namely, the debt and the obligation to pay it or to secure its payment. If the indorsers had assigned

a mortgage for that purpose, the title of the bank to hold the mortgage would have been indubitable. In that case prior equities of the mortgagor might have prevailed against the title of the bank; because a mortgage is not a commercial security, and its transfer for any consideration whatever does not cut off prior equities. But the bona fide transfer of commercial paper before maturity does cut off such equities; and every collateral is held by the creditor by such title and in such manner as appertain to its nature and qualities. Security for the payment of a debt actually owing is a good consideration, and sufficient to support a transfer of property. When such transfer is made for such purpose, it has due effect as a complete transfer, according to the nature and incidents of the property transferred. When it is a promissory note or bill of exchange, it has the effect of giving absolute title and of cutting off prior equities, provided the ordinary conditions exist to give it that effect. If not transferred before maturity or in due course of business, then, of course, it cannot have such effect. But I think it is well shown in the principal opinion that a transfer for the purpose of securing a debt is a transfer in due course. And that really ends the argument on the subject.

NATIONAL BANK v. DAYTON.

A., being indebted to B., proposed, in consideration of a further loan of money, to deliver, in payment of both sums, a certain quantity of wood at a stipulated price per cord. B. accepted the proposal, C. agreeing to receive the wood from him at that price. The loan was made, and A., pursuant to the agreement of the parties, delivered the wood upon the premises of C. Held, that A.'s title passed by that delivery, and that the wood was not subject to levy under executions thereafter issued by his creditors.

ERROR to the Supreme Court of Wyoming Territory.
The facts are stated in the opinion of the court.

Mr. Samuel Shellabarger and Mr. Jeremiah S. Wilson for the plaintiff in error.

Mr. William A. Maury for the defendant in error.

MR. JUSTICE HARLAN delivered the opinion of the court. This was replevin by the Wyoming National Bank against Thomas J. Dayton. The latter, as sheriff of Albany County, Wyoming Territory, had, by virtue of several attachments against the property of one W. S. Bramel, levied upon a number of cords of wood. The bank, claiming to be the owner of the wood at and before the time when the writs were issued and levied, brought this action to recover it, and damages for the detention thereof.

In the court of original jurisdiction a verdict was returned in favor of the defendant, and judgment thereon entered. From the judgment of affirmance by the Supreme Court of the Territory the present writ of error is prosecuted.

Upon the question of the ownership of the wood, at the date of the respective levies, the evidence was conflicting, and presented a case peculiarly within the province of the jury to determine, under proper guidance as to the law governing it. Without attempting to set forth the whole case, it is sufficient to remark that there was evidence to establish the following facts:

Bramel was engaged in the business of bringing wood down the Big Laramie River to Laramie City. He had a contract with the Union Pacific Railroad Company for the delivery to it, at its yard in that city, by a specified date, of five hundred cords of wood at $5 per cord. In the necessary preparations for that engagement, he had, prior to Oct. 30, 1873, received from the bank about $2,100, which its president testified had been advanced to him at different times on this same wood. For these advances the bank held his notes. On the day last named he applied to the president of the bank for a further advance of money. His application was denied. He then proposed that the bank should buy all the wood he had, some of which was then in the yard of the company, but not received by it, some on the bank of the river, and some in the river. This proposition was at first declined; but, after further conversation between him and the president of the bank, it was agreed that the bank should take the five hundred cords at $5 per cord, to be paid for in the debt of $2,100, then held by the bank, and $400 in cash, upon the condition that the company

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