A Kentucky railroad corporation made a contract with the
plaintiff, a Tennessee corporation carrying on a transfer business
at a city
Page 276 U. S. 519
in Kentucky whereby it granted to plaintiff the exclusive
privilege of going upon its trains, into its depot, and on its
surrounding premises to solicit transportation of baggage and
passengers, and assigned a plot of ground belonging to it for the
use of plaintiff's taxicabs while awaiting the arrival of trains,
the plaintiff, on its part, agreeing to render certain services and
to make monthly payments. The term of the contract was for one
year, to continue for consecutive yearly periods until terminated
by either party on thirty days' notice. Plaintiff was the successor
of a Kentucky transfer corporation of the same name which had had a
like contract with the railroad company and which was dissolved
after its shareholders had incorporated the plaintiff and caused
the property and business to be transferred to it. The purpose of
the change of corporations and contracts, cooperated in by the
railroad company, was to create a diversity of citizenship. In a
suit brought by the plaintiff in the federal court in Kentucky, on
the basis of diverse citizenship, to restrain another transfer
corporation, created in Kentucky, from soliciting business and
parking vehicles on the railroad premises in violation of
plaintiff's exclusive contract, and to restrain the railroad
company from permitting such violations,
Held:
1. That the suit was not subject to dismissal under Jud.Code §
37, since the controversy was real and substantial, the plaintiff
was the real party in interest, and the requisite diversity of
citizenship existed. The cooperation between the plaintiff and the
railroad company to have the rights of the parties determined by a
federal court was not improper or collusive within the meaning of §
37. P.
276 U. S.
524.
2. The contract did not exceed the railroad company's powers
under its Kentucky charter. P.
276 U. S.
525.
3. The contract is consistent with the provision of the Kentucky
Constitution, § 214, forbidding any railroad company to make any
exclusive or preferential arrangement for the conduct of any
business as a common carrier. P.
276 U. S.
526.
4. In the absence of any governing provision of local statutes
or constitution, the question whether such a contract is against
public policy is one of general law. P.
276 U. S.
526.
5. Under the common law, as construed and applied by this Court,
by state courts generally, and by English courts, such contracts
are valid.
Delaware etc. R. Co. v. Morristown,
276 U. S. 182. P.
276 U. S.
527.
6. Where the validity of a contract (in this case made in a
state which has adopted the common law), involves no question
of
Page 276 U. S. 520
land title, or of local statute or constitution, or of fixed
local usage, but depends upon a question of general law, federal
courts, while inclining to follow courts of the state in which the
controversy arises, are not bound by Rev.Stats. § 21 to do so, but
are free to exercise their own, independent judgment. P.
276 U. S.
529.
15 F.2d 509 affirmed.
Certiorari, 273 U.S. 690, to a decree of the circuit court of
appeals which affirmed a decree of permanent injunction against the
above-named petitioner and the Louisville & Nashville Railroad
Company restraining violation of a contract between the railroad
company and the respondent. The railroad company did not
appeal.
Page 276 U. S. 522
MR. JUSTICE BUTLER delivered the opinion of the Court.
Respondent sued petitioner and the Louisville & Nashville
Railroad Company in the United States Court for the Western
District of Kentucky to prevent interference with the carrying out
of a contract between the railroad company and the respondent. The
district court entered a decree in favor of respondent. The
railroad company declining to join, petitioner alone appealed. The
circuit court of appeals affirmed, 15 F.2d 509, and this Court
granted a writ of certiorari. 273 U.S. 690.
Respondent is a Tennessee corporation carrying on a transfer
business at Bowling Green, Kentucky. The petitioner is a Kentucky
corporation in competition with respondent. The railroad company is
a Kentucky corporation. In 1925, it made a contract with respondent
whereby it granted the exclusive privilege of going upon its
trains, into its depot, and on the surrounding premises to solicit
transportation of baggage and passengers. And
Page 276 U. S. 523
it assigned a plot of ground belonging to it for the use of
respondent's taxicabs while awaiting the arrival of trains. In
consideration of the privileges granted, respondent agreed to
render certain service and to make monthly payments to the railroad
company. The term of the contract was fixed at one year to continue
for consecutive yearly periods until terminated by either party on
30 days' notice.
Jurisdiction of the district court was invoked on the ground
that the controversy was one between citizens of different states.
The complaint alleges that the railroad company failed to carry out
the contract in that it allowed others to enter upon its property
to solicit transportation of baggage and passengers and to park on
its property vehicles used for that purpose. It alleges that
petitioner entered, solicited business, and parked its vehicles in
the places assigned to respondent and also on an adjoining street,
so as to obstruct the operation of respondent's taxicabs.
Petitioner's answer alleges that respondent was incorporated in
Tennessee for the fraudulent purpose of giving the district court
jurisdiction, and to evade the laws of Kentucky. It asserts that
the contract is contrary to the public policy and laws of Kentucky
as declared by its highest court, and that it is monopolistic in
excess of the railroad company's charter power, and violates § 214
of the constitution of the state.
The record shows that, in September, 1925, respondent was
organized in Tennessee by the shareholders of a Kentucky
corporation of the same name then carrying on a transfer business
at Bowling Green and having a contract with the railroad company
like the one here involved; that the business and property of the
Kentucky corporation were transferred to respondent, and the former
was dissolved. Respondent's incorporators and railroad
representatives, preferring to have this controversy determined
Page 276 U. S. 524
in the courts of the United States, arranged to have respondent
organized in Tennessee to succeed to the business of the Kentucky
corporation, and to enter into this contract in order to create a
diversity of citizenship. The district court found there was no
fraud upon its jurisdiction, held the contract valid, and found,
substantially as alleged in the complaint, that petitioner violated
respondent's rights under it. The decree enjoins petitioner from
continuing such interference.
1. Section 37 of the Judicial Code requires any suit commenced
in a district court to be dismissed if it shall appear that the
suit does not really and substantially involve a dispute or
controversy properly within its jurisdiction or that the parties
have been improperly or collusively made or joined, either as
plaintiffs or defendants, for the purpose of creating a case
cognizable in such court. The requisite diversity of citizenship
exists. And the controversy is real and substantial. The privilege
granted is valuable. Petitioner treats the contract as invalid, and
claims to be entitled, without the consent of the railroad company,
to use railroad property to park its vehicles and solicit business.
The railroad company has failed to protect the rights it granted.
The motives which induced the creation of respondent to become
successor to its Kentucky grantor and take a transfer of its
property have no influence on the validity of the transactions
which are the subject of the suit. The succession and transfer were
actual, not feigned or merely colorable. In these circumstances,
courts will not inquire into motives when deciding concerning their
jurisdiction.
McDonald v. Smalley et
al., 1 Pet. 620,
26 U. S. 624.
It is enough that respondent is the real party in interest.
Smith et al. v.
Kernochen, 7 How. 198,
48 U. S. 216.
The incorporation of respondent or its title to the business and
contract in question is not impeached.
Page 276 U. S. 525
Cooperation between it and the railroad company to have the
rights of the parties determined by a federal court was not
improper or collusive within the meaning of § 37.
Re
Metropolitan Railway Receivership, 208 U. S.
90,
208 U. S. 110;
Harkin v. Brundage, 276 U. S. 36;
South Dakota v. North Carolina, 192 U.
S. 286,
192 U. S. 311.
It requires no discussion to distinguish
Lehigh Mining &
Mfg. Co. v. Kelly, 160 U. S. 327, and
Miller & Lux v. East Side Canal Co., 211 U.
S. 293. The district court had jurisdiction.
2. Petitioner maintains that the contract is not enforceable
because in excess of the railroad company's power under its
charter, and cites the decision of the Kentucky Court of Appeals in
McConnell v. Pedigo, 92 Ky. 465. That case involved a
grant by the railroad company of the exclusive privilege of
standing hacks at the platform of its depot in Glasgow. The court
did not refer to any of the terms of the charter. But petitioner
states that the railroad company was incorporated by an act of the
Legislature of Kentucky, approved March 4, 1850, and purports to
quote the section relating to corporate powers:
"The said Louisville & Nashville Railroad Company . . . may
make all such regulations, rules, and bylaws as are necessary for
the government of the corporation, or for effecting the object for
which it is created:
Provided, that such regulations,
rules, and bylaws shall not be repugnant to the laws and
constitution of said states or the United States. . . ."
The opinion does not hold or suggest that the contract was
contrary to any provision of the constitution or statutes of
Kentucky or in violation of federal law. The court's conclusion
rests on its determination of a question of general law, and not
upon a construction of the charter. Moreover, that court has given
this charter a much broader construction than that insisted on by
petitioner. In
Louisville
Page 276 U. S. 526
Property Co. v. Commonwealth, 146 Ky. 827, it held
that:
"In the maintenance of a place for hotel or restaurant
accommodations, and for pleasure, recreation, and rest such as is
afforded by a park, neither the letter nor the spirit of the
constitution or statute is violated, but the railroad company acts
in the exercise of certain implied powers which it is not
prohibited to exercise."
So far as concerns the railroad company's charter authority to
make it, the contract is clearly within the principle of that
decision.
3. Section 214 of the Kentucky Constitution provides that no
railway company shall make any exclusive or preferential
arrangement for the handling of freight "or for the conduct of any
business as a common carrier." Petitioner invokes the last clause.
The railroad company is under no obligation to transport passengers
or baggage from its station.
McConnell v. Pedigo, supra,
468. It is not bound to permit those engaged in such transportation
to use its property, to solicit patronage, park their vehicles, or
otherwise to carry on their business. The contract does not relate
to the railroad company's business as a common carrier.
D. L.
& W. R. Co. v. Morristown, 276 U.
S. 182.
4. The Court of Appeals of Kentucky held such contracts invalid
in
McConnell v. Pedigo, supra, and
Palmer Transfer Co.
v. Anderson, 131 Ky. 217,. Invalidity of a similar contract
was assumed
arguendo in
Commonwealth v. Louisville
Transfer Co., 181 Ky. 305. As reasons for its conclusion, that
court suggests that the grant of such privileges prevents
competition, makes such discrimination as is unreasonable and
detrimental to the public, and constitutes such a preference over
other transfer men as to give grantee a practical monopoly of the
business. It has not held them repugnant to any provision of the
statutes or constitution of the state. The question there
decided
Page 276 U. S. 527
is one of general law.
Donovan v. Pennsylvania Co.,
199 U. S. 279,
199 U. S. 300.
This Court holds such contracts valid.
Donovan case,
supra, 199 U. S. 297;
Morristown case,
supra. And these decisions show
that, without its consent, the property of a railroad company may
not be used by taxicabmen or others to solicit or carry on their
business, and that it is beyond the power of the state in the
public interest to require the railroad company, without
compensation, to allow its property so to be used.
And state courts quite generally construe the common law as this
Court has applied it.
Old Colony Railroad Co. v. Tripp,
147 Mass. 35;
Boston & Albany Railroad v. Brown, 177
Mass. 65;
New York, N.H. & H. R. Co. v. Scovill, 71
Conn. 136, 145;
Griswold v. Webb, 16 R.I. 649, 651;
New York, N.H. & H.R. Co. v. Bork, 23 R.I. 218, 222;
Hedding v. Gallagher, 72 N.H. 377;
Brown v. N.Y.C.
& H. R. Co., 75 Hun, 355, 359;
Thompson's Exp. &
Storage Co. v. Whitemore, 88 N.J.Eq. 535;
Norfolk &
Western R. Co. v. Old Dominion Baggage Co., 909 Va. 111;
Rose v. Public Service Commission, 75 W.Va. 1, 5;
State v. Depot Co., 71 Ohio St. 379;
Railroad Co. v.
Kohler, 107 Kan. 673, 677;
Oregon Short Line R. Co. v.
Davidson, 33 Utah, 370;
Union Depot & Ry. Co. v.
Meeking, 42 Colo. 89, 95;
Dingman v. Duluth, etc., R.
Co., 164 Mich. 328;
Lewis v. Railway Co., 36
Tex.Civ.App. 48, 50.
See Commonwealth v. Power, 7 Metc.
596, 600;
Goudbout v. St. Paul Union Depot Co., 79 Minn.
188, 200;
Napman v. People, 19 Mich. 352, 355;
Fluker
v. Georgia Railroad & Banking Co., 81 Ga. 461, 463.
In harmony with the Kentucky decisions, the highest courts of
Indiana and Mississippi hold such contracts invalid.
Indianapolis Union R. Co. v. Dohn, 153 Ind. 10;
State
v. Reed, 76 Miss. 211. The same conclusion is reached in
Cravens v. Rodgers, 101 Mo. 247;
Montana Union Ry. Co.
v. Langlois, 9 Mont. 419;
Kalamazoo Hack & Bus
Co.
Page 276 U. S. 528
v. Sootsma, 84 Mich.194. But, in each of the last three
cases, the conclusion rests at least in part upon a provision of
state statute or constitution.
Arrangements similar in principle to that before us are
sustained in English courts.
Perth General Station Committee v.
Ross, L.R.App.Cas. (1897) 479;
In re Beadell, 2
C.B.(N.S.) 509;
Barker v. Midland Ry. Co., 18 C.B. 45.
The cases cited show that the decisions of the Kentucky Court of
Appeals holding such arrangements invalid are contrary to the
common law as generally understood and applied. And we are of
opinion that petitioner here has failed to show any valid ground
for disregarding this contract, and that its interference cannot be
justified. Care is to be observed lest the doctrine that a contract
is void as against public policy be unreasonably extended.
Detriment to the public interest is not to be presumed in the
absence of showing that something improper is done or contemplated.
Steele v. Drummond, 275 U. S. 199. And
it is to be remembered, as stated by Sir George Jessel, M.R., in
Printing Co. v. Sampson, L.R. 19 Eq. 462, 465, that public
policy requires that competent persons
"shall have the utmost liberty of contracting, and that their
contracts, when entered into fairly and voluntarily, shall be held
sacred, and shall be enforced by courts of justice."
The station grounds belong to the railroad company, and it
lawfully may put them to any use that does not interfere with its
duties as a common carrier. The privilege granted to respondent
does not impair the railroad company's service to the public or
infringe any right of other taxicabmen to transport passengers to
and from the station. While it gives the respondent advantage in
getting business, passengers are free to engage anyone who may be
ready to serve them. The carrying out of such contracts generally
makes for good order at railway stations,
Page 276 U. S. 529
prevents annoyance, serves convenience, and promotes safety of
passengers.
D. L. & W. R. Co. v. Morristown, supra.
There is here no complaint by or on behalf of passengers; no lack
of service, unreasonable exaction, or inconvenience of the public
is shown. It would be unwarranted and arbitrary to assume that this
contract is contrary to public interest. The grant of privileges to
respondent creates no duty on the part of the railroad company to
give like privileges to others, and therefore there is no illegal
discrimination. And, as the state is without power to require any
part of the depot ground to be used as a public hackstand without
providing just compensation therefor, then
a fortiori such
property may not be handed over for the use of petitioner without
the consent of the owner.
5. The decree below should be affirmed unless federal courts are
bound by Kentucky decisions which are directly opposed to this
Court's determination of the principles of common law properly to
be applied in such cases. Petitioner argues that the Kentucky
decisions are persuasive, and establish the invalidity of such
contracts, and that the circuit court of appeals erred in refusing
to follow them. But, as we understand the brief, it does not
contend that, by reason of the rule of decision declared by § 34 of
the Judiciary Act of 1789 (now R.S. § 721, U.S.C. Tit. 28, § 725),
this Court is required to adopt the Kentucky decisions. But,
granting that this point is before us, it cannot be sustained. The
contract gives respondent, subject to termination on short notice,
license or privilege to solicit patronage and park its vehicles on
railroad property at train time. There is no question concerning
title to land. No provision of state statute or constitution, and
no ancient or fixed local usage is involved. For the discovery of
common law principles applicable in any case, investigation is not
limited to the
Page 276 U. S. 530
decisions of the courts of the state in which the controversy
arises. State and federal courts go to the same sources for
evidence of the existing applicable rule. The effort of both is to
ascertain that rule. Kentucky has adopted the common law, and her
courts recognize that its principles are not local, but are
included in the body of law constituting the general jurisprudence
prevailing wherever the common law is recognized.
Hunt v.
Warnicke's Heirs. 3 Hardin 61;
Lathrop v. Commercial
Bank, 8 Dana 114, 121;
Ray v. Sweeney, 14 Bush 1, 9
et seq.; Aetna Insurance Co. v. Commonwealth, 106 Ky. 864,
876;
Nider v. Commonwealth, 140 Ky. 684, 686.
And
see 1 Kent's Commentaries (14th ed.) pp. 451, 602. As respects
the rule of decision to be followed by federal courts, distinction
has always been made between statutes of a state and the decisions
of its courts on questions of general law. The applicable rule
sustained by many decisions of this Court is that, in determining
questions of general law, the federal courts, while inclining to
follow the decisions of the courts of the state in which the
controversy arises, are free to exercise their own independent
judgment. That this case depends on such a question is clearly
shown by many decisions of this Court.
Swift v.
Tyson, 16 Pet. 1,
41 U. S. 19, was
an action on a bill of exchange. Mr. Justice Story, writing for the
Court, fully expounded § 34 of the Judiciary Act.
Carpenter
v. Insurance Co., 16 Pet. 495,
41 U. S. 511,
held that the construction of an insurance policy involves
questions of general law.
Lane v. Vick,
3 How. 464, involved the construction of a will. It was said (p.
44 U. S. 476):
"This Court do not follow the state courts in the construction of a
will or any other instrument, as they do in the construction of
statutes."
Foxcroft v.
Mallett, 4 How. 353,
45 U. S. 379,
held that the decision of a state court construing a deed is not
conclusive on this Court.
Chicago City v.
Robbins, 2 Black 418,
67 U. S. 428,
declined to follow the determination of the state court as to
what
Page 276 U. S. 531
constitutes negligence.
Yates v.
Milwaukee, 10 Wall. 497,
77 U. S. 506,
held that the determination of what constitutes a dedication of
land to public use is one of general law.
Olcott v.
Fond du Lac County, 16 Wall. 678,
83 U. S. 689,
held that the determination of what is a public purpose to warrant
municipal taxation involves a question of general law.
New York Cent. R. Co. v.
Lockwood, 17 Wall. 357,
84 U. S. 366,
declined to follow the state rule as to liability of common
carriers for injury of passengers.
Liverpool & G. W. S. Co.
v. Phenix Ins. Co., 129 U. S. 397,
129 U. S. 443,
held a question concerning the validity of a contract for carriage
of goods is one of general law.
Baltimore & Ohio Railroad
v. Baugh, 149 U. S. 368,
149 U. S. 370,
so held as to the responsibility of a railroad company to its
employees for personal injuries.
Beutler v. Grand Trunk
Railway, 224 U. S. 85,
224 U. S. 88,
decides who are fellow servants as a question of general law.
*
The lower courts followed the well established rule, and rightly
held the contract valid. The facts shown warrant the injunction
granted.
Decree affirmed.
Page 276 U. S. 532
*
And see 59 U. S.
Tarpley, 18 How. 517;
Mercer County v.
Hackett, 1 Wall. 83,
68 U. S. 95;
Marshall County v.
Schenck, 5 Wall. 772,
72 U. S. 784;
Boyce v. Tabb,
18 Wall. 546,
85 U. S. 548;
Railroad Co. v. Jones, 95 U. S. 439;
Hough v. Railway Co., 100 U. S. 213,
100 U. S. 226;
Oates v. National Bank, 100 U. S. 239,
100 U. S. 246;
Brooklyn City & N. R. Co. v. National Bank,
102 U. S. 14,
102 U. S. 29;
Burgess v. Seligman, 107 U. S. 20,
107 U. S. 32
et seq; Myrick v. Michigan Central R. Co., 107 U.
S. 102,
107 U. S. 109;
Pana v. Bowler, 107 U. S. 529,
107 U. S. 540;
Gibson v. Lyon, 115 U. S. 439,
115 U. S. 446;
Enfield v. Jordan, 119 U. S. 680,
119 U. S. 694;
Smith v. Alabama, 124 U. S. 465,
124 U. S. 478;
Lake Shore Railway Co. v. Prentice, 147 U.
S. 101,
147 U. S. 106;
Gardner v. Michigan Central Railroad, 150 U.
S. 349,
150 U. S. 358;
Oakes v. Mase, 165 U. S. 363;
Barber v. Pittsburgh, etc., Railway, 166 U. S.
83,
166 U. S. 100;
Pennsylvania R. Co. v. Hughes, 191 U.
S. 477,
191 U. S.
485-486;
Presidio County v. Noel-Young Co.,
212 U. S. 58,
212 U. S. 73;
Texas & Pacific Ry. Co. v. Bourman, 212 U.
S. 536,
212 U. S. 541,
and cases cited;
Kuhn v. Fairmont Coal Co., 215 U.
S. 349,
215 U. S. 357
et seq.; Salem Co. v. Manufacturers' Co., 264 U.
S. 182,
264 U. S. 191;
B. & O. R. Co. v. Goodman, 275 U. S.
66,
275 U. S. 70.
MR. JUSTICE HOLMES, dissenting.
This is a suit brought by the respondent, the Brown and Yellow
Taxicab and Transfer Company, as plaintiff, to prevent the
petitioner, the Black and White Taxicab and Transfer Company, from
interfering with the carrying out of a contract between the
plaintiff and the other defendant, the Louisville and Nashville
Railroad Company. The plaintiff is a corporation of Tennessee. It
had a predecessor of the same name which was a corporation of
Kentucky. Knowing that the Courts of Kentucky held contracts of the
kind in question invalid, and that the Courts of the United States
maintained them as valid, a family that owned the Kentucky
corporation procured the incorporation of the plaintiff and caused
the other to be dissolved after conveying all the corporate
property to the plaintiff. The new Tennessee corporation then
proceeded to make with the Louisville and Nashville Railroad
Company the contract above mentioned, by which the Railroad Company
gave to it exclusive privileges in the station grounds, and, two
months later, the Tennessee corporation brought this suit. The
circuit court of appeals, affirming a decree of the district court,
granted an injunction and upheld this contract. It expressly
recognized that the decisions of the Kentucky courts held that, in
Kentucky, a railroad company could not grant such rights, but, this
being a "question of general law," it went its own way regardless
of the courts of this state. 15 F.2d 509.
The circuit court of appeals had so considerable a tradition
behind it in deciding as it did that, if I did not regard the case
as exceptional, I should not feel warranted in presenting my own
convictions again, after having stated them in
Kuhn v. Fairmont
Coal Co., 215 U. S. 349. But
the question is important, and, in my opinion, the prevailing
doctrine has been accepted upon a subtle fallacy
Page 276 U. S. 533
that never has been analyzed. If I am right, the fallacy has
resulted in an unconstitutional assumption of powers by the courts
of the United States which no lapse of time or respectable array of
opinion should make us hesitate to correct. Therefore I think it
proper to state what I think the fallacy is. The often repeated
proposition of this and the lower Courts is that the parties are
entitled to an independent judgment on matters of general law. By
that phrase is meant matters that are not governed by any law of
the United States or by any statute of the state -- matters that in
states other than Louisiana are governed in most respects by what
is called the common law. It is through this phrase that what I
think the fallacy comes in.
Books written about any branch of the common law treat it as a
unit, cite cases from this Court, from the circuit courts of
appeal, from the state courts, from England and the Colonies of
England indiscriminately, and criticize them as right or wrong
according to the writer's notions of a single theory. It is very
hard to resist the impression that there is one august corpus, to
understand which clearly is the only task of any court concerned.
If there were such a transcendental body of law outside of any
particular state but obligatory within it unless and until changed
by statute, the courts of the United States might be right in using
their independent judgment as to what it was. But there is no such
body of law. The fallacy and illusion that I think exist consist in
supposing that there is this outside thing to be found. Law is a
word used with different meanings, but law in the sense in which
courts speak of it today does not exist without some definite
authority behind it. The common law, so far as it is enforced in a
state, whether called common law or not, is not the common law
generally, but the law of that state existing by the authority of
that state without regard to what it
Page 276 U. S. 534
may have been in England or anywhere else. It may be adopted by
statute in place of another system previously in force.
Boquillas Cattle Co. v. Curtis, 213 U.
S. 339,
213 U. S. 345.
But a general adoption of it does not prevent the state courts from
refusing to follow the English decisions upon a matter where the
local conditions are different.
Wear v. Kansas,
245 U. S. 154,
245 U. S.
156-157. It may be changed by statute,
Baltimore
& Ohio R. Co. v. Baugh, 149 U. S. 368,
149 U. S. 378,
as is done every day. It may be departed from deliberately by
judicial decisions, as with regard to water rights, in states where
the common law generally prevails. Louisiana is a living proof that
it need not be adopted at all. (I do not know whether, under the
prevailing doctrine, we should regard ourselves as authorities upon
the general law of Louisiana superior to those trained in the
system.) Whether and how far and in what sense a rule shall be
adopted, whether called common law or Kentucky law, is for the
state alone to decide.
If, within the limits of the Constitution, a state should
declare one of the disputed rules of general law by statute, there
would be no doubt of the duty of all courts to bow, whatever their
private opinions might be.
Mason v. United States,
260 U. S. 545,
260 U. S. 555;
Gulf Refining Co. v. United States, 269 U.
S. 125,
269 U. S. 137.
I see no reason why it should have less effect when it speaks by
its other voice.
See Benedict v. Ratner, 268 U.
S. 353;
Sim v. Edenborn, 242 U.
S. 131. If a state constitution should declare that, on
all matters of general law, the decisions of the highest court
should establish the law until modified by statute or by a later
decision of the same court, I do not perceive how it would be
possible for a court of the United States to refuse to follow what
the state court decided in that domain. But when the constitution
of a state establishes a supreme court, it by implication does make
that declaration as clearly as if it had said it in express words,
so
Page 276 U. S. 535
far as it is not interfered with by the superior power of the
United States. The supreme court of a state does something more
than make a scientific inquiry into a fact outside of and
independent of it. It says, with an authority that no one denies
except when a citizen of another state is able to invoke an
exceptional jurisdiction, that thus the law is and shall be.
Whether it be said to make or to declare the law, it deals with the
law of the state with equal authority however its function may be
described.
Mr. Justice Story, in
Swift v. Tyson,
16 Pet. 1, evidently under the tacit domination of the fallacy to
which I have referred, devotes some energy to showing that § 34 of
the Judiciary Act of 1789, c. 20, refers only to statutes when it
provides that, except as excepted, the laws of the several states
shall be regarded as rules of decision in trials at common law in
courts of the United States. An examination of the original
document by a most competent hand has shown that Mr. Justice Story
probably was wrong, if anyone is interested to inquire what the
framers of the instrument meant. 37 Harvard Law Review 49, at
81-88. But this question is deeper than that; it is a question of
the authority by which certain particular acts, here, the grant of
exclusive privileges in a railroad station, are governed. In my
opinion, the authority, and only authority, is the state, and if
that be so, the voice adopted by the state as its own should utter
the last word. I should leave
Swift v. Tyson undisturbed,
as I indicated in
Kuhn v. Fairmont Coal Co., but I would
not allow it to spread the assumed dominion into new fields.
In view of what I have said, it is not necessary for me to give
subordinate and narrower reasons for my opinion that the decision
below should be reversed. But there are adequate reasons short of
what I think should be recognized. This is a question concerning
the lawful use of land in Kentucky by a corporation chartered by
Kentucky.
Page 276 U. S. 536
The policy of Kentucky with regard to it has been settled in
Kentucky more more than thirty-five years.
McConnell v.
Pedigo, 92 Ky. 465. Even under the rule that I combat, it has
been recognized that a settled line of state decisions was
conclusive to establish a rule of property or the public policy of
the state.
Hartford Fire Insurance Co. v. Chicago, Milwaukee
& St. Paul Ry. Co., 175 U. S. 91,
175 U. S. 100.
I should have supposed that what arrangements could or could not be
made for the use of a piece of land was a purely local question on
which, if on any thing, the state should have its own way and the
state courts should be taken to declare what the state wills.
See especially Smith Middlings Purifier Co. v. McGroarty,
136 U. S. 237,
136 U. S.
241.
MR. JUSTICE BRANDEIS and MR. JUSTICE STONE concur in this
opinion.