The Federal Reporter with Key-Number Annotations, Volume 256: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, May-July, 1919. Page: 76
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236 FEDERAL REPORTER
Law (Consol. Laws 1909, e. 22) applies. This section provides as follows:
'Words in the singular number include the plural, and in the plural number
include the singular.' * * * The construction claimed by the defendants,
limiting the operation of the section to mortgages securing plurality of bonds,
cannot be successfully upheld.
"Neither is there anything in the section indicating any intention on the
part of the Legislature to confine its applicability to negotiable as distinguish-
able from nonnegotiable bonds."
 But we are told by counsel for the trustee that this decision is
not binding upon this court because it was not rendered by the highest
court of the state. In Pease v. Peck, 18 How. 595, 15 L. Ed. 518, the
Supreme Court of the United States held that, where there is a settled
construction of a statute of a state by its highest court, it is the prac-
tice of the federal courts to adopt it without criticism or further in-
quiry. And see Beals v. Hale, 4 How. 37, 54, 11 L. Ed. 865, to the
effect that a decision of a court other than the court of last resort is
not binding on federal courts.
On the other hand we are told by counsel for the respondent that it
is not true that the federal courts will follow only the construction of
a state law given by the highest courts of the state. In Erie Railroad
Co. v. Hilt, 247 U. S. 97, 38 Sup. Ct. 435, 62 L. Ed. 1003, the Supreme
Court held that the federal court, in construing a statute of the state
of New Jersey, should follow the construction given to it by the
Supreme Court of New Jersey, although it was not the highest court
of that state. "In view of the importance of that tribunal in New
Jersey," said Justice Holmes, "although not the highest court in the
state, we see no reason why it should not be followed by the courts of
the United States, even if we thought its decision more doubtful than
we do." The Supreme Court of New Jersey is not a trial court, as is
the Special Term of the Supreme Court of New York, and instead of
being composed of a single judge, as that court is, it is composed of
nine judges, who sit as an appellate tribunal.
We do not regard the decision in the Hilt Case as laying down a rule
which makes it incumbent upon this court to adopt a construction given
to a state statute by a trial judge in a state court. While, therefore,
free to examine the statute for ourselves, and to put our own construc-
tion upon it, we have no hesitation in saying that we fully concur in
the construction that the Supreme Court of New York gave to section
231. We entertain no doubt that the construction which Judge Kel-
logg gave to that section of the act in Clement v. Congress, supra, is
correct, and rules this case.
The question has been raised, however, whether that section applies
to any mortgage not executed by a railroad, telegraph, telephone, or
electric light corporation. But the New York Court of Appeals has
held that the section applied to a mortgage given by a manufacturing
corporation. Zartman v. First National Bank, 189 N. Y. 267, 82 N.
E. 127, 12 L. R. A. (N. S.) 1083. That decision is binding upon this
court. See, also, Westchester Trust Co. v. Hobby Bottling Co., 102
App. Div. 464, 92 N. Y. Supp. 482, affirmed in 185 N. Y. 577, 78 N. E.
1114, on the opinion of the court below.
It is said that the respondent's mortgage does not cover chattels ac-
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The Federal Reporter with Key-Number Annotations, Volume 256: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, May-July, 1919., legislative document, 1919; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38827/m1/90/: accessed July 25, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.