Forepaugh v. Del. R.

18 A. 503, 128 Pa. 217, 1889 Pa. LEXIS 786

• Court: Pennsylvania Court of Common Pleas, Philadelphia County
• Decided: October 7, 1889
• Docket: No. 227
• Status: Published

Opinions

Opinion,

Me. Justice Mitchell:

Plaintiff, being the proprietor of a circus, made a special contract with defendant for the transportation of a number of his own cars, upon certain conditions and terms, elaborately set out in writing, among which was a stipulation that in consideration that the service was to be performed “ for much less than the ordinary, usual, and legal rates charged other parties for a like amount of transportation,” the plaintiff released the defendant from all liability for or on account of loss, damage, or injury to any of the animals, property, or things thus transported, “ although such loss, damage, or injury may be caused by the negligence of the (defendant), its agents, or employees.” Damage having occurred by the negligence of defendant, plaintiff brought this suit, and the sole question before us is whether it can be maintained in the face of the stipulation above set forth.

The contract was made, was to be performed, and the alleged breach occurred in New York. No possible element was wanting, therefore, to make it a New York contract. It is admitted that in New York the stipulation is valid, and this action could not be maintained: Cragin v. N. Y. C. R. Co., 51 N. Y. 61; Mynard v. Railroad Co., 71 N. Y. 180; Wilson v. Railroad Co., 97 N. Y. 87. Why, then, should plaintiff, by stepping across the boundary into Pennsylvania, acquire rights which he has not paid for, and his contract does not give him ?

It is argued that the validity of this contract is a question of commercial law, and therefore the mere decisions of the New York courts are not binding, and in the absence of any statute in New York expressly authorizing such a contract, the courts of this state must follow their own views of the commercial, as part of the general common law, though different views may be held as to such law by the courts of New York.

This is the main argument of the plaintiff, and as it is one which is frequently advanced, and affects a number of important questions, it is time to say plainly that it rests upon'an utterly inadmissible and untenable basis. There is no such thing as a general commercial, or general common law, separate from, and irrespective of a particular state or government whose authority makes it law. Law is defined as a rule prescribed by the sovereign power. By whom is a general commercial law prescribed, and what tribunal has authority or recognition to declare or enforce it outside of the local jurisdiction of the government it represents? Even the law of nations, the widest reaching of all, is a law only in name. It has but a moral sanction, and the only tribunal that undertakes to enforce it is the armed hand, the ultima ratio regum. The so-called commercial law is likewise a law only in name. Upon many questions arising in the business dealings of men, the laws of modern civilized states are substantially the same, and it is therefore common to say that such is the commercial law, but, except as a convenient phrase, such general law does not exist. There must be a state, or government, of which every law can be predicated, and to whose authority it owes its existence as law. Without such sanction, it is not law at all; w’th such sanction, it is law without reference to its origin or me concurrence of other states or people. Such sanction it is the prerogative of the courts of each state itself to declare. Their jurisdiction is final and exclusive, and in this respect there is no distinction between statute and common law.

It is universally conceded that, as to statutes, the decisions of the state courts are binding upon all other tribunals, yet such decisions have no higher sanction than those upon the common law, for what the latter determine, equally with the former, is the law of the particular state. The law of Pennsylvania consists of the constitution, treaties, and statutes of the United States, the constitution and statutes of this state, and the common law, not of any or all other countries, but of Pennsylvania. There is a common law of England, and a common law of Pennsylvania mainly founded thereon, but with certain differences, and the only tribunal competent to pass authoritatively on such differences is a Pennsylvania court. To take a familiar illustration: In the United States the universal doctrine has always been that the English colonists brought with them and made part of their laws, all the common law of England that was not unsuited to their new situation. No part of the common law of England is better settled than the doctrine of ancient lights. The Court of Chancery of New Jersey, in Robeson v. Pittenger, 1 Green Ch. 57 (1838), held that the same doctrine was part of the common law of New Jersey. The Supreme Court of Pennsylvania, on the other hand, starting with the same premises and reasoning on the same principles, but proceeding cautiously from the dictum of Rogers, J., in Hoy v. Sterrett, 2 W. 331 (1834), to the unanimous decision of the court in Haverstick v. Sipe, 33 Pa. 368 (1859), held that the doctrine of ancient lights by prescription was not part of the common law of Pennsylvania. No tribunals of any other state presume to question that the common law of New Jersey and the common law of Pennsylvania differ on this point. What is law in one state is not law in the other, not because it was or was not the common law of England, but because it is or is not the law of the respective .states. And, though it rests only on the decisions of the courts, it is none the less absolutely and indisputably the law than if it had been made so by statute.

I have purposely selected an illustration from the law relating to real estate, because if I took one from the commercial law, it might seem like assuming the very question under discussion. But the example is none the less pertinent. The point is, the-force of judicial decisions on the common law, and the assumption that there is any tenable basis for holding them less binding upon such law than upon statutes. The so-called commercial law derives all its force from its adoption as part of the common law, and a decision on the commercial law of a state stands upon precisely the same basis as a decision upon any other branch of the common law. The only ground upon which any foreign tribunal can question either, is, that it does not agree with the premises or the reasoning of the court. But the same ground would enable it to question a decision upon a statute, because a different construction seemed to it nearer the true intent of the legislative language, and this it is universally conceded no foreign court can do. There is no difference in principle. The decisions of a state court, upon 'its common law and on its statutes, must stand unquestioned, because it is the only authority competent to decide, or they must be alike questionable by any tribunal which may choose to differ with its reasons or its conclusion.

It is not probable that the doctrine of such a distinction would ever have got a foothold in jurisprudence, and it would certainly have been long ago abandoned, had it not been for the unfortunate misstep that was made in the opinion in Swift v. Tyson, 16 Pet. 1. Since then the courts of the United States have persisted in the recognition of a mythical commercial law, and have professed to decide so-called commercial questions by it, in entire disregard of the law of the state where the question arose. It is argued now that as to such questions the state courts also have similar liberty. It would be sufficient answer to this argument, that such a course, by reading into a contract a new duty not in contemplation of the parties, and not paid of it by the law of the place where it is made, is in principle and in practical effect impairing the obligation of the contract, which even the sovereign power of a state is prohibited from doing. But we prefer to rest the matter on the broader ground that the doctrine itself is unsound. The best professional opinion has long regarded it as indefensible on principle, and is thus very recently summed up by the most learned of living jurists:

“ Questions growing out of contracts made and to be performed in a state, are decided by the national court of last resort, not in accordance with the unwritten or customary law of the state where they originated, as expounded by its courts, but agreeably to some theoretic view of a general commercial law, which does not exist, and is not to be found in the books. The state courts, on the other hand, adhere to their own precedents, and do not consider themselves entitled to impair the obligation of contracts that have been made in reliance on the principles which they have laid down through a long series of years. The result is a conflict of jurisdiction which there are no means of allaying.....Whether a recovery shall be had on a promissory note, which has been taken as collateral security for an antecedent debt, against a maker from whom it was obtained by fraud, is thus made to turn in New York, Pennsylvania, and Ohio, not on any settled rule, but on the tribunal by. which the cause is heard; and if that is federal, the plaintiff will prevail; if it is local, the defendant. Such a result tends to discredit the law.....The enumeration might be carried further, but enough has, perhaps, been said to show that no uniform rule can be deduced from the decisions of the English and American courts under the commercial law, and that the certainty requisite to justice can be obtained only by following the local tribunals as regards the contracts made in each locality. . . . ■. The several states of this country are collectively one nation, but they are as self-governing in all that concerns their purely internal commerce as if the general government did not exist; and when the will of the people of New York or Pennsylvania is declared on such matters, through their representatives in the local legislatures, expressly, or by long-continued acquiescence in the rules enunciated by their judges, it cannot be set aside by congress short of an amendment of the constitution. Piad the New York legislature declared that notes made and negotiated in that state should follow the rule laid down in Coddington v. Bay, 20 Johns. 637, the federal tribunals would have been bound to carry it into effect, notwithstanding any attempt of the national legislature to introduce a different principle; and it is inconceivable that the judicial department of the government can exercise a greater authority in this respect than the legislative : ” Hare on Constitutional Law, pp. 1107, 1117, and see Lecture 51, passim.

We conclude, therefore, that the distinction between the binding effect of decisions on commercial law, and on statutes, is utterly untenable; that the law declared by state courts to govern on contracts made within their jurisdiction is conclusive everywhere ; and the departure made by the United States courts is to be regretted and certainly not to be followed.

In entire accordance with this view are our own cases of Brown v. Railroad Co., 83 Pa. 316, and Brooke v. Railroad Co., 108 Pa. 530; and the decisions in Ohio: Knowlton v. Erie Ry. Co., 19 Ohio 260; in Illinois: Penna. Co. v. Fairchild, 69 Ill. 260; Milwaukee & St. P. R. Co. v. Smith, 74 Ill. 197; in Iowa: Talbott v. Dispatch Co., 41 Ia. 247; Robinson v. Dispatch Co., 45 Ia. 470; in Connecticut: Hale v. Navigation Co., 15 Conn. 539; in Kansas: Railroad Co. v. Moore, 29 Kan. 632; in South Carolina: Bridger v. Railroad Co., 27 S. C. 462; in Georgia: Railroad Co. v. Tanner, 68 Ga. 390; in Mississippi: McMaster v. Railway Co., 65 Miss. 271; in Texas: Carter v. Bennett, 39 Tex. 203; Ryan v. Railway Co., 65 Tex. 13, and perhaps in other states. I will not notice them in detail further than to quote the terse and forcible summary made by Scott, J., in Knowlton v. Railroad Co.: “ As the contract was made within the jurisdiction of New York, and contemplated no action outside of that jurisdiction, it is clear that the question of its validity must be determined solely by the laws of New York. The rights and obligations of the parties to such a contract, and in respect to the manner of its execution, cannot be affected by the laws or policy of other states. If no cause of action arose to the plaintiff under his contract when the accident occurred, the transaction cannot be converted into a cause of action by the fact that the parties have subsequently come within the jurisdiction of Ohio.”

Holding, therefore, that the validity of this contract is to be determined by the law of New York, as decided by the courts of that state, is there any reason why the courts of this state should not enforce it ? The general rule is, that courts will enforce contracts valid by the law of the place where made, unless they are injurious to the interests of the state or of its citizens: Story on Conflict of Laws, §§ 88, 244. The injury may be indirect by offending against justice, or morality, or by tending to subvert settled public policy: 2 Kent, 458; Greenwood v. Curtis, 6 Mass. 358; Bliss v. Brainard, 41 N. H. 256. But this does not imply that courts will not sustain contracts that would not be valid if made within their jurisdiction, or will not enforce rights that could not be acquired there. Thus, for example, the courts of Pennsylvania have always enforced contracts for a higher rate of interest than would be valid under the laws of this state: Ralph v. Brown, 3 W. & S. 395; Wood v. Kelso, 27 Pa. 243; Irvine v. Barrett, 2 Gr. 73.

The contract in the present case does not directly affect the state or its citizens in any way. Nor is it in any way contrary to justice or morality. It may be doubted whether it is even so far contrary to the policy of the state that it would have been invalid if it had been made here. It has some exceptional features, which, it is argued, take it out of the ordinary rules governing the contracts of common carriers, and the case of Coup v. Railroad Co., 56 Mich. 111, is a strong authority for that position. But without stopping to discuss that point, which our general view renders unnecessary, it is sufficient to say that even if it would not have been valid if made here, its enforcement as a New York contract does not in any way derogate from the laws of Pennsylvania, or injure or affect the policy of the state, any more than would a foreign contract for what would be usurious interest here, and that as already said the courts have never hesitated to enforce.

The argument of duress may be briefly dismissed for want of any evidence in the case to sustain it. There is no evidence that defendant was unwilling to accept the ordinary and usual rates for the transportation of plaintiff’s cars and property. If they had been offered by plaintiff and refused, there might-have been some ground for the present argument, though in view of the peculiar nature of the property and the special facilities required, even that is far from clear. But in fact plaintiff got a large reduction of rates, and part of the consideration for such reduction was the agreement that he should be his own insurer against loss by accident. There was nothing compulsory about such a contract, and plaintiff comes now with a very bad grace to assert a right that he expressly relinquished for a substantial consideration.

The learned court below was right in entering judgment for the defendant on the facts found in the special verdict.

Judgment affirmed.