Concur/dissent Catron | Date decided 1842 | |
Full case name John Swift v. George W. Tyson Citations 41 U.S. 1 (more)
10 L. Ed. 865; 1842 U.S. LEXIS 345 Prior history On a certificate of division from the Circuit Court of the United States for the Southern District of New York Majority Story, joined by unanimous Ruling court Supreme Court of the United States Similar Erie Railroad Co v To, Pennoyer v Neff, Prigg v Pennsylvania, International Shoe Co v Washington, Charles River Bridge v |
Swift v. Tyson, 41 U.S. 1 (1842)[1], was a case brought in diversity in the Circuit Court for the Southern District of New York on a bill of Exchange accepted in New York in which the Supreme Court of the United States determined that United States federal courts hearing cases brought under their diversity jurisdiction pursuant to the Judiciary Act of 1789 must apply the statutory law of the states when the state legislature of the state in question had spoken on the issue but did not have to apply the state's common law in those cases in which that state's legislature had not spoken on the issue. The Court's ruling meant that the federal courts, when deciding matters not specifically addressed by the state legislature, had the authority to develop a federal common law.
Contents
Statute
Judiciary Act of 1789, §34: "the laws of the several states, except where the constitution, treaties or statutes of the United States shall otherwise recognise 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."
Holdings
The Court:
- Held that a bona fide holder of a negotiable instrument for valuable consideration, without any notice of the facts which implicate its validity as between the antecedent parties, if he takes it under an endorsement made before the same becomes due, holds the title unaffected by those facts, and may recover thereon although, as between the antecedent parties, the transaction may be without any legal validity.
- Held that §34 of the Judiciary Act of 1789 does not restrict federal courts hearing diversity of citizenship cases from deriving their "own" common law.
- Sustained the determination of the lower federal court that, under federal common law (with reference to general principles of commercial jurisprudence), a pre-existing debt constitutes a valuable consideration for a negotiable instrument.