4

mount authority in relation to federal questions, and that circumstance lent weight to its decisions upon all other questions, especially as those decisions were binding in all inferior federal courts. Judge Story doubtless saw that situation in delivering the opinion in Swift v. Tyson. He was at all times a vigorous asserter of federal authority. Once only, in The Thomas Jefferson,2 where he followed the English rule then prevailing, and limited the admiralty jurisdiction to the ebb and flow of the tide, did he miss an opportunity to extend the judicial power of the United States. In Martin v. Hunter,3 in 1816, he declared that "the whole judicial power of the United States should be, at all times, vested either in an original or appellate form, in some courts created under its authority." In De Lovio v. Boit, while sitting in the circuit court, he vindicated the jurisdiction of the admiralty over contracts of marine insurance wherever made, a jurisdiction which was afterwards sustained by the Supreme Court. So in Swift v. Tyson, whether consciously animated by a purpose to extend the federal judicial power or not, he adopted a construction of the 34th section of the Judiciary Act of 1789 which gave to the federal courts independent coördinate authority with the state courts upon all questions of general law, and to the Supreme Court of the United States an opportunity to establish and maintain leadership of the state courts in the wide domain of private law. It is probable that all the judges of the Supreme Court at that time fully realized the importance and influence of the court. Thus Judge Catron, while dissenting in Swift v. Tyson upon the ground that one point decided by the court was not involved in the case, said: "whereas, if the question was permitted to rest until it fairly arose, the decision of it either way by this court probably would, and I think ought to, settle it."6 The rule in Swift v. Tyson is so important that a few illustrations will be submitted to show the manner in which the federal influence has worked.

In 1873 in New York Central R. R. v. Lockwood," the question was presented to the Supreme Court whether a common carrier could lawfully stipulate for exemption from liability for negligence. of himself or his servants. The question arose in the case of a drover who shipped cattle at Buffalo to be transported to West

1 1 Story, Life and Letters, 254.

3 I Wheat. (U S.) 304.

2 10 Wheat. (U. S.) 428 (1825).

4

2 Gall. (U. S.) 398.

5 New England Marine Ins. Co. v. Dunham, 11 Wall. (U. S.) 1 (1871).

616 Pet. (U. S.) 1, 23.

7

17 Wall. (U. S.) 357

Albany under a contract by which he was to accompany the cattle and take the risk of personal injuries from whatever cause. It was a question of importance to the whole country. A number of state courts had previously passed upon it, and the Court of Appeals of New York, the state in which the Lockwood case arose, had upheld the stipulation in favor of the exemption of the common carrier. The Supreme Court of the United States reached the opposite conclusion, in a unanimous decision, the opinion being written by Mr. Justice Bradley. Professor Gray has called attention to the influence exerted by the opinion of Judge Miller in Nichols v. Eaton in spreading the doctrine of spendthrift trusts. Similar observations will apply to the opinion of Judge Bradley in the Lockwood case. At the bar of New Jersey he seems to have been able to convince the Supreme Court of that state that the grantee in a deed purporting to be an indenture inter partes was liable in covenant, although the indenture was executed by the grantor alone. The reader may form some idea of the range of his learning and grasp of his mind as a judge by reading his opinions in Norwich & N. Y. Transportation Co. v. Wright,* in The Lottawanna,5 and in the Civil Rights Cases.6 The Lockwood opinion is written in his best style. It combines a full presentation of the existing state of the law upon the question in the state courts and in England with original reasoning upon the principles of law and considerations of policy applicable to the case, and sums up the result in four conclusions, denying the right of a common carrier of goods or passengers to stipulate for exemption from responsibility for negligence of himself or his servants. A leading text-book says: "These conclusions, after so thorough an examination of the subject, may be said to have most decidedly turned the scale in favor of the exclusion of all contracts between carriers and their employers, exempting the former from the negligence, of every grade, of themselves or their employees or servants." 7

It was fortunate also for the case of Swift v. Tyson that the

1 91 U. S. 716.

2 Gray, Restraints on Alien., 2 ed., Preface, v.

Finley v. Simpson, 2 Zab. (N. J.) 311. See Rawle, Covenants for Title, 5 ed., § 272, n. 5.

7 1 Hutchinson, Carriers, 3 ed., § 453. See also § 450, n. 24, and §§ 451 and 452.

opinion was written by an eminent judge. In 1842 Judge Story was at the height of his fame. His authority was especially strong in commercial law, but the opinion has the weakness which usually results from deciding more than the facts of the case require. The question presented was whether the taking of a bill in payment of a pre-existing debt was a valuable consideration sufficient to exclude equities of the acceptor against prior holders. The court went beyond this question and decided not only that a taking in payment, but a taking as collateral security for a pre-existing debt, was a valuable consideration sufficient to exclude all equities. The case seems to have been quite generally followed in the state courts upon the first point, but less widely where the transfer was as collateral security. It was contrary to the law of New York upon both points, and created a diversity between the law administered in the state courts and the federal courts within that state which continued - notwithstanding the hope expressed by Mr. Justice Clifford in Brooklyn City Bank v. Nat'l Bank of the Republic,2 that the courts of New York would concur at no distant day until the passage of the Negotiable Instruments Act in 1897. It was supposed by some authorities that this statute in section fifty-one settled the law in accordance with Swift v. Tyson.1 Other authorities have suggested that section fifty-one presents a question of construction.5 The Supreme Court of New York in the Appellate Division has held in two cases that taking negotiable paper merely as security does not constitute a holder for value within the meaning of the statute.5 The persistence of this question illustrates one of the dangers lying in wait for every statute which aims to codify the whole or any portion of our private law. It was well put by Lord Macnaghten on the Rule in Shelley's Case: "That was putting the case in a nutshell. But it is one thing to put a case like Shelley's in a nutshell, and another thing to keep it there." It is comparatively easy to put the law of negotiable paper into a uniform statute and to procure the enactment of that statute in many states. To keep it uniform will require the best efforts of an able bar and of many wise and learned courts.

6

11 Ames, Cas. on Bills and Notes, 650, n. 1, and 667, n. 1. See also 4 Am. & Eng. Encyc., 2 ed., 290 and n. 4; 291 and n. 2.

2 102 U. S. 14, 58 (1880).

3 See Dill., Laws & Jurisp., 245.

4 Crawford, Ann. Neg. Inst. Law, 2 ed., 32, § 51; Brewster v. Shrader, 26 N. Y. Misc. 480.

Huffcut, Neg. Inst., 333, n. I. 6 Van Grutten v. Foxwell, [1897] A. C. 658,671.

In 1872, in Mutual Life Insurance Co. v. Terry,1 the Supreme Court of the United States passed upon the question of the meaning of a clause in a policy of life insurance providing that the policy shall be void if the person insured shall die by his own. hand. At that time, as was said by Mr. Justice Gray in Manhattan Insurance Co. v. Broughton,2" there was a remarkable conflict of opinion in the courts of England, in the courts of the several states, and in the circuit courts of the United States, as to the true interpretation of such a condition." The Supreme Court decided that if the assured committed the act of self-destruction when his reasoning faculties were so far impaired that he was not able to understand the moral character of his act, it was not within the condition of the policy, and the insurer was liable. There is now strong authority in the state courts in favor of that view.3

In 1851, in Little Miami Railroad Co. v. Stevens, the Supreme Court of Ohio introduced into the law of master and servant a new rule known as the superior-servant rule, which was a great departure from the common law as laid down in Farwell v. Boston & Worcester Railroad. The action was by an engineer for personal injuries caused by the negligence of the conductor in charge of the train. The court held that "where an employer placed one person in his employ under the direction of another, also in his employ, such employer is liable for injury to the person of him placed in the subordinate situation, by the negligence of his superior."

This rule has produced diversity and confusion in the law of master and servant similar to that which Lawrence 7. Fox produced in the law of contract. It spread from Ohio to other states, and there are now "no less than five distinct interpretations of the superior-servant limitation." The weight of the Supreme Court of the United States, after a period of uncertainty, was at last thrown decisively into the scale against the limitation, in Baltimore & Ohio R. R. v. Baugh and New England Railroad v. Conroy.8

1 15 Wall. (U. S.) 580.

2 109 U. S. 121, 127.

3 Wambaugh, Cas. on Ins., 769 and n. 1; 19 Am. & Eng. Encyc., 2 ed., 77. See, however, Daniels v. N. Y., N. H. & H. R. R., 183 Mass. 393, 399.

4 20 Oh. St. 416.

6 4 Met. (Mass.) 49.

6 12 Am. & Eng. Encyc., 2 ed., 922.

7 149 U. S. 368 (1892).

8 175 U. S. 322 (1899).

There are signs that those decisions have had an influence upon the decisions of state courts.1

Without a full and thorough examination of all the decisions in the state courts bearing upon the question it is impossible to measure accurately the effect of the rule in Swift v. Tyson in securing uniformity of law. That it has affected the course of decision favorably to uniformity in states where the law had not previously been settled seems reasonably clear. The state courts on their part, while freely acknowledging the duty of obedience to the Supreme Court upon all questions depending upon the Constitution, treaties, or laws of the United States, have firmly asserted their independent authority upon all questions of general law. No case has ever fallen under my notice where either a state or a federal court has yielded its own previously declared opinion to the other on a question of commercial or other general law. In 1848 the points decided in Swift v. Tyson were presented again in the highest court of New York, in Stalker v. McDonald,2 where Chancellor Walworth re-examined the decisions in an elaborate opinion and concluded thus: "Nor do I think that the settled law of this state is so manifestly wrong as to authorize this court to overturn its former decision, for the purpose of conforming it to that of any other tribunal whose decisions are not of paramount authority." So in 1877, in Mynard v. Syracuse, Buffalo & New York R. R., involving the question in the Lockwood case, the Court of Appeals by Church, Ch. J., said: "If we felt at liberty to review the question, the reasoning of Justice Bradley in that case would be entitled to serious consideration, but the right thus to stipulate has been so repeatedly affirmed by this court that the question cannot with propriety be regarded as an open one in this state." One incidental benefit resulting from the rule in Swift v. Tyson has been to stimulate elaborate discussions of opposing doctrines in several cases in the state and federal courts. The great case of Hill v. Boston, in Massachusetts, involving a fundamental doctrine in the law of municipal liability for negligence, is devoted largely to an examination of the grounds and authorities relied upon in Barnes v. District of Columbia, to which it is opposed. On the other hand, the point in the Barnes case was

1 Rose, Notes on U. S. Reports, 3 Supp. 373, 376, 1062-1064; 75 Am. St. Rep. 580, and notes at 609, 625-626.

26 Hill (N. Y.) 93.

4 122 Mass. 344.

8 71 N. Y. 180, 185.

5

91 U. S. 540 (1876).