This Court cannot review a judgment of the state court under §
709, Rev.Stat., on the ground of denial of a federal right,
privilege, or immunity unless the same was specially set up or
claimed in the state court.
Questions of the
lex loci contractus and of the
lex
loci solutionis are questions of general law that frequently
arise in litigation and do not, unless specially so claimed,
constitute the setting up of a federal right or privilege.
In this case, the insistence of plaintiff in error that his
rights under a contract were to be determined according to the law
of a different state did not amount to claiming that full faith and
credit was
Page 226 U. S. 591
denied to the law of another state so as to give a basis for a
review of the judgment by this Court under § 709, Rev.Stat.
Where, as in this case, it appears that the state court based
its decision upon the interpretation of the contract, and not upon
the law of another state, there is no basis for review by this
Court on the ground of failure to give full faith and credit to the
acts of another state.
The assertion of a federal right in an unsuccessful application
to the highest court of a state to grant a writ of error to a lower
court of that state raises no question reviewable in this
Court.
Writ of error to review 130 S.W. 922 dismissed.
The facts, which involve the jurisdiction of this Court to
review a judgment of a state court on writ of error under § 709,
Rev.Stat., are stated in the opinion.
MR. JUSTICE PITNEY delivered the opinion of the Court.
Writ of error sued out under § 709, Rev.Stat., to review a
judgment of the court of civil appeals, that being the highest
court of the state in which a decision in the suit could be had,
because the Supreme Court of Texas denied a petition for writ of
error to review the judgment in that court.
The action was brought by defendants in error in the District
Court of El Paso county, Texas, to recover damages for certain
alleged breaches of contract committed by the railroad company, now
plaintiff in error. Damages were recovered accordingly, and the
judgment awarding them was affirmed by the court of civil appeals.
130 S.W. 922. Whether the jurisdiction of this Court is
Page 226 U. S. 592
properly invoked depends upon whether any federal right or
immunity was duly set up or claimed by the plaintiff in error in
the state court, and there overruled.
The controversy in suit arose out of a written contract between
the parties, whereby the railroad company, owner of a railroad
located in the then territory of New Mexico, for the purpose of
procuring crushed stone ballast from a quarry owned by it and
situate in the territory, agreed to provide a crushing and quarry
plant capable of producing 1,000 cubic yards of ballast in ten
hours, with the necessary appurtenances and equipment, including
coal, water, and railroad cars, and the defendants in error agreed
that with and from said plant they would quarry, crush, prepare,
and deliver ballast at the rate of 750 cubic yards for each day's
work at prices fixed by the contract. The contract contained a
clause providing that monthly payments to the extent of 90
percentum of the engineer's estimates should be made to the
defendants in error during the progress of the work, with a final
payment at the completion of the whole work contemplated,
"upon the certificate of the company's engineer of maintenance
of way that the contractor has acceptably discharged all of his
obligations under this agreement in conformity to the following
specifications."
Also the following, appended to the specifications:
"The decision of the company's engineer of maintenance of way
shall be final and conclusive in any dispute which may arise
between the parties to this agreement relative to or touching the
same, and each of the parties hereto waives any right of action,
suit or suits, or other remedy in law or otherwise, by virtue of
the covenants herein, so that the decision of said engineer of
maintenance of way shall, in the nature of an award, be final and
conclusive on the rights and claims of said parties."
The plaintiffs, in their petition, set up numerous grounds of
action. So far as they were submitted to the jury, they
Page 226 U. S. 593
were summarized by the trial judge as follows: plaintiffs
alleged that the defendant failed to furnish a crusher plant of the
capacity agreed to be furnished, that the plant actually furnished
was of much less capacity, and that, instead of furnishing coal and
water of a quality reasonably sufficient and suitable for the
purpose of operating the plant and quarry, the defendant furnished
coal and water entirely unsuitable for that purpose; that, by
reason of the incapacity of the plant and the unsuitability of the
coal and water, plaintiffs were prevented from producing the
quantity of ballast required by the contract, and which they had a
right to produce and would have produced but for the defendant's
alleged defaults; that the cost of the ballast actually produced
was greatly enhanced by reason of said defaults, and plaintiffs
were finally compelled to shut down and abandon their contract;
wherefore they sought to recover the retained percent, certain
penalties that had been exacted under the terms of the contract for
failure to produce ballast, and certain freight charges against
them, deducted by defendant for goods transported over its own
line, and also to recover for the enhanced cost of production of
the ballast actually produced, and for the profits which they
alleged they would have made under the contract if it had been
fairly performed by the defendant.
The defense, so far as now pertinent, was that the contract was
made and intended to be performed in the then Territory of New
Mexico, and was made with reference to the laws in force therein,
and that there was in that territory at the time of the making of
the contract and at the time of the suit,
"a certain nonstatutory and unwritten law to the effect that
agreements such as herein specially referred to [meaning the
agreement respecting the arbitrament of the engineer] are valid and
binding, and that neither of the parties to such contract and
agreement has any right of action in a cause based
Page 226 U. S. 594
thereon, but must rely for a decision of such rights and claims
on the determination thereof by such engineer."
This defense was set up by exceptions to the plaintiff's
petition, and by to trial, whereupon the defendant introduced, for
the purpose of showing the laws of New Mexico at the time the
contract was made, certain decisions of this Court, to-wit:
Kihlberg v. United States, 97 U. S.
398;
Sweeney v. United States, 109 U.
S. 618;
Martinsburg & Potomac R. Co. v.
March, 114 U. S. 549;
Chicago, Santa Fe &c. R. Co. v. Price, 138 U.
S. 185;
United States v.
Robeson, 9 Pet. 319,
34 U. S. 327;
United States v. Gleason, 175 U.
S. 588;
Mercantile Trust Co. v. Hensey,
205 U. S. 298. At
the conclusion of the evidence, the defendant, among other special
charges, requested the court to instruct the jury that the contract
sued on provided that the decision of the company's engineer of
maintenance of way should be final and conclusive in any dispute
between the parties relative to the agreement, and that each of the
parties thereby waived any right of action or other remedy at law,
or otherwise, by virtue of the covenants of the agreement, and
expressly agreed that the decision of the engineer should, in the
nature of an award, be final and conclusive on the rights of the
parties; that the contract was intended to be performed in the
Territory of New Mexico, and that, under the laws of that
territory, the agreement referred to was a valid agreement, binding
upon both parties; that, under the laws of the territory and the
provisions of the contract made in pursuance thereof, the matters
and things in dispute in this action should have been submitted to
the decision of the engineer, and because they had not been so
submitted and acted upon by him, no judgment could be rendered
against the defendant arising out of the matters in dispute, and
also, that, if the jury believed from the evidence that the
engineer had theretofore decided and determined that the plant
Page 226 U. S. 595
in question was of the capacity warranted, and the coal and
water were serviceable for the purpose for which they were
intended, and that all allowances which plaintiffs could be
entitled to by reason of delay on account of the lack of coal and
water or the bad character of coal and water had been in fact
allowed by the engineer, and the plaintiffs had been paid therefor
by the defendant, then the plaintiffs would not be entitled to
recover in this action by reason of the incapacity of the plant or
the character and quality of the coal and water furnished unless
the jury should further believe that, in making such decisions and
awards, the engineer acted in fraud of the plaintiff's rights or in
such ignorance thereof as to amount in law to a fraud.
The trial court refused to give these instructions, and, on the
contrary, charged the jury that, if the crusher plant installed by
the defendant company did not have the stipulated maximum capacity,
or if the water or coal was of a quality not reasonably suitable
for the operation of the plant, and if, by reason of either of
these causes, the production of ballast by the plaintiffs was
reduced beneath 750 cubic yards per day and beneath that which the
plaintiffs would otherwise have actually produced with reasonable
care, management, and diligence, and if plaintiffs suffered loss
and damage by reason thereof, then the defendant would be liable
for such loss and damage as was the proximate result of its failure
to furnish a crusher plant of the guaranteed capacity or to furnish
reasonably suitable coal or reasonably suitable water.
In the opinion of the court of civil appeals, the action of the
trial court was sustained upon the following reasoning:
"The question of the capacity of the crushing plant and the
quality and sufficiency of the coal and water to successfully
operate the plant to the end it was furnished plaintiffs by
defendant were not by the contract submitted to the engineer for
his decision. These matters,
Page 226 U. S. 596
as we have seen, were conditions precedent to the contract which
it was incumbent upon the defendant to perform in order that
plaintiffs might carry out their part of the contract, and if
defendant failed to perform them, and such failure proximately
caused default of plaintiffs for which the penalties were assessed
by the engineer, such assessments were wrong, and the amount paid
by plaintiffs, if not voluntarily [paid], are recoverable by
them."
And again:
"It was not contemplated by the contract that defendant's
engineer, as an arbiter, should determine the question whether a
material provision in the contract was breached by either party and
assess the damages occasioned by such breach, nor were such matters
submitted to or determined by such engineer. If they had been,
neither party would have been bound by his award, for they were
such as could only be determined by a court of competent
jurisdiction. Therefore there was no error in the court's refusing
special charges Nos. 43, 45 and 47 [being those to which reference
has been made], nor do we think that either of said special charges
suggested any law upon the subject to which they pertain which
required the court to prepare another charge thereon and submit it
to the jury."
We have sufficiently indicated the general character of the
controversy, the issues of fact and of law that were raised
therein, and the disposition that was made of them. Whether this
Court has jurisdiction to review the resulting judgment depends, of
course, upon whether, in the course of the proceedings, the
plaintiff in error "specially set up or claimed" any "right,
privilege, or immunity" under the Constitution or any statute of
the United States, within the meaning of § 709, Rev.Stat.
It is contended that the decisions of this Court that were
introduced as evidence of the law of New Mexico in effect conferred
upon the plaintiff in error the privilege and immunity of being
protected against any action to recover
Page 226 U. S. 597
damages except such as the engineer had decided were due to
defendants in error, and that the failure of the state court to
give effect to those decisions or to properly construe and apply
the unwritten law of the territory as established thereby presents
a federal question as much as if an act of Congress had been
disregarded.
But assuming (without, however, conceding) that the plaintiff in
error was entitled to a "right, privilege, or immunity" in the
premises, derived from the federal Constitution or laws, the
question remains whether such right, privilege, or immunity was
"specially set up or claimed." An examination of the record
discloses that, while it was repeatedly insisted that the rights of
the parties under the contract should be determined according to
the law of the Territory of New Mexico, that such law was to be
ascertained from the reported decisions of this Court, and that,
under those decisions, the clauses that gave finality to the
decision of the company's engineer were valid and binding, and that
the plaintiff's action was foreclosed thereby, it was not suggested
that, in so insisting, the plaintiff in error was asserting or
relying upon any right, privilege, or immunity derived from the
Constitution or laws of the United States.
Questions of the
lex loci contractus and of the
lex
loci solutionis are questions of general law that frequently
arise in actions respecting written agreements.
Von
Hoffman v. Quincy, 4 Wall. 535,
71 U. S. 550; 9
Cyc., Title "Contracts," 664-674; 2 Parsons, Cont. *567, *582-585;
Story, Confl. Laws §§ 231, 232, 241, 242, 270, 272, 280, etc. To
insist in such a litigation that the matter ought to be controlled
by the law of the place where the contract was made and to be
performed, rather than by the law of the forum, is no more than to
insist that the controversy shall be determined according to the
rules of law properly applicable thereto.
The points raised by plaintiff in error that are now relied
Page 226 U. S. 598
upon as an assertion of federal rights were brought to the
attention of the trial court and of the court of civil appeals like
any other of the multitude of questions that were raised in those
courts, and, so far as appears, the decision in both courts
proceeded not in disregard of any federal right asserted or
suggested, nor even in disregard of the decisions of this Court or
the authority of those decisions as laying down the law of the
Territory of New Mexico, but rather upon the ground that, upon the
proper interpretation of the contract, the clause that was cited as
giving finality to the decision of the company's engineer was not
applicable to the questions in controversy.
We therefore deem it clear that plaintiff in error did not lay
the foundation for a review under § 709, Rev.Stat. either in the
trial court or in the court of civil appeals.
After the denial by the latter court of a motion for rehearing,
application was made to the Supreme Court of Texas for a writ of
error to the end that that court might review the judgment. In this
application, alleged federal rights were for the first time
asserted, it being assigned for error that the trial court and the
court of civil appeals had "refused to give full faith and credit
to the public acts and laws of the territory of New Mexico," etc.,
etc. The application was considered and refused, and a motion for a
rehearing thereon was overruled. But since the court of civil
appeals is the highest court of the state that rendered a judgment
reviewable here (
Stanley v. Schwalby, 162 U.
S. 255,
162 U. S. 269;
Bacon v. Texas, 163 U. S. 207,
163 U. S.
215), the assertion of federal rights in an unsuccessful
application to the supreme court of the state for a writ of error
raises no question that is reviewable in this Court.
Writ of error dismissed.