independent tribunals which it might be supposed would be unaffected by local prejudices and sectional views, it would be a dereliction of their duty not to exercise an independent judgment in cases not foreclosed by previous adjudication.'

461. "Laws" of the State Do Not Always Include its Unwritten Laws.-The word "laws" as used in section 721 does not necessarily include the decisions of the State Courts as to what their unwritten law is. Many years ago the Supreme Court said:

"They are, at most, only evidence of what the laws are, and are not, of themselves, laws. They are often re-examined, reversed and qualified by the courts themselves, whenever they are found to be either defective, or ill-founded, or otherwise incorrect. The laws of a State are more usually understood to mean the rules and enactments promulgated by the legislative authority thereof, or long established local customs having the force of laws."

The Court went on to say in all the various cases which had hitherto come before it for decision it had uniformly supposed that a true interpretation of the 34th section limited its application to State laws, strictly local;

"that is to say, to the positive statutes of the State, and the construction thereof adopted by the local tribunals, and to rights and titles to things having a permanent locality, such as the rights and titles to real estate, and other matters immovable and intra-territorial in their nature and character. It never has been supposed by us, that the section did apply, or was designed to apply, to questions of a more general nature, not at all dependent upon local statutes or local usages of a fixed and permanent operation, as, for example, to the construction of ordinary contracts or other written instruments, and especially to questions of general commercial law, where the State tribunals are called upon to perform the like functions as ourselves, that is, to ascertain upon general reasoning and legal analogies, what is the true exposition of the contract or instrument, or what is the just rule furnished by the principles of com

'Burgess vs. Seligman, 107 U. S. 33.

mercial law to govern the case. And we have not now the slightest difficulty in holding, that this section, upon its true intendment and construction, is strictly limited to local statutes and local usages of the character before stated, and does not extend to contracts and other instruments of a commercial nature, the true interpretation and effect whereof are to be sought, not in the decisions of the local tribunals, but in the general principles and doctrines of commercial jurisprudence. Undoubtedly, the decisions of the local tribunals upon such subjects are entitled to, and will receive, the most deliberate attention and respect of this court; but they cannot furnish positive rules, or conclusive authority, by which our own judgments are to be bound up and governed."1

This was a case in which some persons in Maine had sold land, to which they claimed to have good title, to a citizen of New York. They drew upon him for part of the purchase money. He accepted the draft in New York. His acceptance was, therefore, a New York contract, and as the draft was to be paid in New York the contract was made to be performed in that State. After the draft had been accepted it was endorsed over by the drawers to another citizen of Maine on account of a pre-existing debt owed by them to him. He had no knowledge of the circumstances. At the trial in the United States Court it appeared that the representations made by the original vendors of the land and drawers of the draft were materially untrue and fraudulent. The holder of the draft, the plaintiff in the suit, answered that he was a bona fide holder for value. Under the law of New York, he was not such holder, because according to the then rulings of its Courts, one who took a negotiable instrument on account of a pre-existing debt was not a holder for value in such sense that he could maintain an action when the original payee could not. The Supreme Court held, however, that this was a question of general commercial law; that they were not bound by the decisions of the State Courts of New York, and that such holder was a holder for value.

1 Swift vs. Tyson, 16 Peters, 1.

462. Reasons Why Supreme Court Will Not in Some Matters Follow State Decisions.-It is desirable that State and Federal Courts shall apply the same law to similar state of facts. It is also true that it is highly expedient that commercial transactions, frequently extending, as they do, across State lines, shall be governed by a law uniform throughout the nation. Only the Supreme Court of the United States is so situated that it may hope that its views will, in the long run, be accepted in all parts of the Union. It has therefore deemed it wise in such matters to follow its own opinion.

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1

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The law of negotiable instruments, the construction of insurance contracts,2 the liability of common carriers,3 the validity of the stipulations in their bills of lading, the measure of damages in suits against them, the law of master and servant, are among the questions of commercial law as to which the Federal Courts do not feel constrained to follow the State decisions. They, of course, are bound by any valid and applicable State statute.

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The whole subject of when and how far the Federal Courts must follow the decisions of those of the States is reviewed in the case of Kuhn vs. Fairmount Coal Co.

'Railroad Co. vs. National Bank, 102 U. S. 23.

"Carpenter vs. Providence Washington Ins. Co., 16 Peters, 495.

Chicago, Milwaukee & St. Paul Ry. Co. vs. Ross, 112 U. S. 377.

'Railroad Co. vs. Lockwood, 17 Wall. 357.

CHAPTER XVII.

APPELLATE JURISDICTION OF THE COURTS OF THE UNITED STATES-DIRECT APPEALS FROM DISTRICT COURTS TO

SUPREME COURT.

463. Two Methods of Initiating Appellate Proceedings. A review of the rulings and conclusions of the lower Court may be sought in one of two ways either by writ of error or by appeal. The former is the appropriate method of bringing to the attention of the reviewing tribunal mistakes which the lower Court made in hearing and determining a case at law. The latter is the proceeding by which a reversal or modification of an erroneous determination of a suit in equity may be secured. The circumstances under which each of them can be properly employed will be considered later. While discussing the appellate jurisdiction of the Federal Courts, in order to avoid unnecessary repetition, the word appeal will be used whichever is meant.

464. Courts Over Which the Appellate Jurisdiction of the Federal Courts May Be Exercised.—The jurisdiction of the Circuit Court of Appeals is limited to appeals from the District Courts of their respective circuits, and to the enforcement or review of certain classes of orders of the Interstate Commerce Commission, the Federal Reserve Board and the Federal Trade Commission.1 The Supreme Court may sometimes entertain direct appeals from the District Courts. In some classes of cases it has, and must exercise, appellate jurisdiction over the determinations of the Circuit Courts of Appeals, and it may, if it deems best, by writ of certiorari, review any of their decisions. It, moreover, may, under some circumstances, issue writs of error to the Courts of the States. The last is the most important, though by no means the most frequuently exercised, jurisdiction of the highest Court of the Union.

465. Jurisdiction of the Circuit Court of Appeals.Except as stated in the next preceding section, the Circuit Courts of Appeals exercise appellate jurisdiction only.

1 Sec. 11, Clayton Act, Oct. 15, 1914.

The rule is that from the final decision of a District Court, an appeal may be taken to the Circuit Court of Appeals of the circuit.1 To this rule there are certain exceptions, viz, those in which an appeal lies directly from the District Court to the Supreme Court. Such cases are enumerated in section 238 of the Judicial Code. In order accurately to understand the limits of the jurisdiction of the Circuit Court of Appeals, it is necessary to know when the Supreme Court may be asked to review directly a final decision of a District Court.

466. Jurisdiction of the Supreme Court Over Direct Appeals From the District Courts.-There are six classes of cases, or, more accurately, of questions which may be carried directly from the District to the Supreme Court. They

are:

1. Cases in which the jurisdiction of the District Court

is in issue.

2. Prize causes.

3. Cases that involve the construction or application of the Constitution of the United States.

4. Cases in which the constitutionality of any law of the United States is drawn in question.

5. Cases in which the validity or construction of any treaty made under the authority of the United States is drawn in question.

6. Cases in which the Constitution or law of a State is claimed to be in contravention of the Constitution of the United States.

These are all of great importance. The reasons why it is expedient that they be promptly passed upon by the Supreme Court are obvious.

Apparently it has not always been easy for the profession to be sure whether certain concrete cases are or are not within of them. A good deal of confusion and not a little profitless litigation has been thereby occasioned. It will be worth

any