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Swift v. Tyson
1. What was the rule of decision as to which a conflict existed?
The Judiciary Act of 1789 34, ch. 20 state that "The laws of the several
states, except where the constitution, treaties or statutes of the United
States shall otherwise require or provide, shall be regarded as rules of
decision, in trials at common law, in the courts of the United States, in
cases where they apply." The rule of decision is that under New York
common law, a pre-existing debt does not constitute valuable consideration
applicable to negotiable instruments.
2. What two sovereigns offered conflicting rules?
The "rule" of the Supreme Court (representing the sovereignty of the
Federal government) conflicted with New York common law (which represents
the sovereignty of local state government).
3. Characterize "Swift" as a "false conflict."
Justice Story reasons that the "law" referenced in 34 concerns only "the
rules and enactments promulgated by the legislative authority," and that
the decisions of local tribunals represent merely "evidence of what the
laws are." At that time, however, neither the Congress nor the New York
legislature had enacted a specific rule concerning the status of holders in
due course. Therefore, no conflicted existed either between two states or
between New York and Federal law.
4. Justice Story deprives state judicial opinions of the status of "laws."
a. What status does he give his general holder-in-due-course rule?
Justice Story classifies his rule as one of "general commercial law." In
contrast to local law, his rule should be interpreted based on "general
principles and doctrines of commercial jurisprudence."
b. Why does his rule have higher status than the decisions of the New York
Justice Story's rule has higher status because commercial law effects not
"a single country only, but [t]he entire commercial world."
5. What aspect of international law resembles the general "holder in due