Klaxon Co. v. Stentor Elec. Mfg. Co., Inc.
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313 U.S. 487 (1941)
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U.S. Supreme Court
Klaxon Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487 (1941)
Klaxon Company v. Stentor Electric Manufacturing Co., Inc.
Argued May 1, 2, 1941
Decided June 2, 1941
313 U.S. 487
1. In diversity of citizenship cases, the federal courts, when deciding questions of conflict of laws, must follow the rules prevailing in the States in which they sit. Erie R. Co. v. Tompkins, 304 U. S. 64. P. 313 U. S. 496.
2. In an action in a federal court. in Delaware, for breach of a New York contract, the applicability of a New York statute directing that interest be added to the recovery in contract cases is a question of conflict of laws, which the federal court must determine by the law of Delaware. P. 313 U. S. 496.
3. The Full Faith and Credit Clause does not require that a State, contrary to its own policy, shall give effect in actions brought locally on contracts made in other States, to laws of those States relating, not to the validity of such contracts, but to the right to add interest to the recovery as an incidental item of damages.
115 F.2d 268, reversed.
Certiorari, 312 U.S. 674, to review the affirmance of a judgment recovered for breach of a contract, 30 F.Supp. 425. The review in this Court was limited to the question whether § 480 of the New York Civil Practice Act is applicable to an action in the federal court in Delaware.