Court Opinion

ID: 9637117
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:57:37.295541+00
Date Added: 2024-06-11T18:09:53.447183
License: Public Domain

JONES, Circuit Judge
(dissenting).
The fundamental question presented by this appeal is of such general importance that I am constrained to state the reasons for my disagreement with the majority.
When Swift v. Tyson, 16 Pet. 1, 10 L.Ed. 865, was overruled by Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L. Ed. 1188, 114 A.L.R. 1487, and Section 34 of the Judiciary Act of 17891 was held to refer to the common law of a State as well as to its statute law, the Supreme Court made plain that it is the law of a State, as declared by the authority of the State (legislative and judicial) which is binding on a federal court upon a question of local law. Nonetheless, the decision of the majority in the present case denies appropriate effect, as it seems to me, to the law of New Jersey as so declared.
From their own independent construction of a statute of New Jersey (Laws of 1932, cc. 40 and 41), the majority conclude that Mrs. Field became entitled, upon the death of Miss Peck, to the bank deposit in dispute, notwithstanding that, on two separate occasions and upon facts which, as the majority opinion states, “cannot be distinguished from those here in question”, the New Jersey Court of Chancery has held that the statute was ineffectual to accomplish the result which the majority now reaches in the present case. See Thatcher v. Trenton Trust Co., 119 N.J.Eq. 408, 182 A. 912, and Travers v. Reid, 119 N.J.Eq. 416, 182 A. 908.
No appeal was taken from the final decree in either the Thatcher or Travers case, supra, and, although each was decided early in 1936 and the New Jersey legislature has been in regular session four times since then, the effect of those decisions has not been changed by subsequent legislative action or further judicial decision. Aside from the Thatcher and Travers cases, supra, there are no other-reported court decisions of New Jersey construing the Act in question. Presumably the statute of 1932, as construed by the New Jersey Chancery Court, expresses the law of the State, with reference to the particular subject matter, as the people of New Jersey desire it to be. Such is their right without federal let or hindrance. Undeniably, the Constitution, laws, or treaties of the United States are not involved in the present case in the slightest way. See Erie Railroad Co. v. Tompkins, supra, where Mr. Justice Brandéis, speaking for the majority, quoted with approval from the dissenting opinion of Mr. Justice Field in Baltimore & Ohio R. Co. v. Baugh, 149 U.S. 368, 401, 13 S.Ct. 914, 37 L.Ed. 772, in part, as follows, 304 U.S. at page 79, 58 S.Ct. at page 822, 82 L.Ed. 1188, 114 A.L.R. 1487, — “Supervision over either the legislative or the judicial action- of the states is in no case permissible except as to matters by the constitution specifically authorized or delegated to the United States. Any interference with either, except as thus permitted, is an invasion of the authority *528of the state, and, to that extent, a denial of its independence.”
Yet, the majority conceive that we are free to disregard the decisions of the Chancery Court and to construe the statute as we will. On the contrary, the proper course for this court, when called upon to ascertain and declare the statute law of a State, would he to accept the statutes of the State, as uniformly construed by its important courts of competent jurisdiction (although not the highest), in the absence of any decision by the State court of last resort. Section 34 of the Judiciary Act of 1789, even as too narrowly restricted by Swift v. Tyson,2 supra, appears to have required as much. There was then no suggestion that, in the matter of State decisions on statute law binding on federal courts, -the “local tribunals” (there specified) meant only a State court of last resort.
In any event, our duty to apply the statute law of New Jersey as construed by the Court of Chancery of that State is hardly open to question any longer.
In the case of Erie R. Co v. Hilt, 1918, 247 U.S. 97, 100, 101, 38 S.Ct. 435, 436, 62 L.Ed. 1003, this court, having declined to follow the construction of a New Jersey statute as theretofore determined by a decision of the Supreme Court of that State (not the court of last resort), made and applied its own independent construction. In reversing the judgment of this court the Supreme Court, in an opinion by Mr. Justice Holmes, said: “The words of the statute seem to us to require a different construction from that adopted and they have been given their full literal meaning by the Supreme Court of the State in the case of an infant younger than the plaintiff. Barcolini v. Atlantic City & Shore R. Co., 82 N.J.L. 107, 81 A. 494. In view of the importance of that tribunal in New Jersey, 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.” (Emphasis supplied.)
The question as to whether, in applying the statute law of a State, we are bound to follow only the decisions of the highest court of the State was directly before the Supreme Court in the Hilt case, supra, and was there answered in the negative. This is plainly evidenced by the fact that two of the members of the Court dissented from the judgment in the Hilt case on the ground that this court was right, “In the absence of a decision of the highest Court of New Jersey holding otherwise”, when we independently construed the statute contrary to the decision of the New Jersey Supreme Court. But, by direct contrast, the majority of the court ruled otherwise.
Since then, this court has had a number of occasions to comply with the Supreme Court’s instructions in the Hilt case, supra, which we have done uniformly up to the present time with the exception of one instance.
Thus, in expressed obedience to the Hilt case, supra, Murray v. Payne, 3 Cir., 1921, 273 F. 820, applied the New Jersey Supreme Court’s construction of a State statute; likewise, North Philadelphia Trust Co. v. Smith, 3 Cir., 1926, 13 F.2d 585, followed the construction of the New Jersey Negotiable Instruments Act made by the Supreme Court of that State; Masino v. West Jersey & S. S. R. Co., 3 Cir., 1930, 41 F.2d 645, 646, cited the Hilt case and said that the Supreme Court of New Jersey was “of sufficient importance to compel observance of its decisions”; and Ex parte Zwillman, 3 Cir., 1931, 48 F.2d 76, quoting at length from the Hilt case, followed the New Jersey Supreme Court’s construction of a New Jersey statute. Also Berlet v. Lehigh Valley Silk Mills, 3 Cir,, 1923, 287 F. 769, and Steinbach et al. v. Metzger et al., 3 Cir., 1933, 63 F.2d 74, each cited the Hilt case in support of their respective observance of a statutory construction in the one case and a decision based on the common law in the.other by the Superior Court of Pennsylvania (a high and important court, it is true, but still not the court of last resort). And, in Radin v. Commissioner of Internal Revenue, 3 Cir., 1929, 33 F. 2d 39, 40, this court, in what it deemed to be compliance with the Supreme Court’s requirement in the Hilt case, applied as the law of New Jersey a decision of the Chancery Court of that State. True enough, as the majority opinion in the present case points out, the decision in the case last above cited involved a rule of property, and its acceptance could have been as res adjudícala rather than as stare decisis. But, *529it is not without point that in the Radin case, supra, Judge Woolley, speaking for this court, described the Court of Chancery of New Jersey (with whose decisions we are now concerned) as “a high state court of competent jurisdiction”.
Any thought that the ruling in the Hilt case, supra, was because of the Supreme Court’s agreement with the New Jersey court’s construction of the particular statute rather than because of the duty resting upon the federal courts, in matters of local law, to follow a State statute, as construed by an important State court of competent jurisdiction, should be dispelled by the later decision of the Supreme Court in the case of Erie Railroad Co. v. Duplak, 286 U.S. 440, 444, 52 S.Ct. 610, 611, 76 L.Ed. 1214 (the one earlier instance where this court failed to follow the ruling of the Hilt case). In the Duplak case, supra, the New Jersey decision which this court declined to follow was the same decision by the Supreme Court of New Jersey (Barcolini v. Atlantic City and S. R. Co., supra), which had been rejected by this court in the Hilt case. In the Duplak case, supra, the Supreme Court makes no mention of its agreement with the construction of the statute as made by the Supreme Court of New Jersey, but, on the other hand, says: “The effect of the Hilt decision is to accept the state statute, as construed by the state court, as having put a negative upon the implied invitation and attractive nuisance doctrines; and the same statute necessarily controls here whatever, otherwise, might be the rule.”
As we should have been compelled to observe a decision of the Supreme Court of New Jersey, construing the statute in the present case, as declaratory of the law of the State, it follows, necessarily, that, if we are now at liberty to ignore the construction placed on the statute by the Court of Chancery, it must be because the New Jersey Court of Chancery is not equal in its importance or finality to the Supreme Court of that State. But, such is plainly not the case.
The decrees of the Chancery Court like the judgments of the Supreme Court are state-wide in their effect and in either case are appealable to the Court of Errors and Appeals (the highest State court). There is no intermediate court of appeal empowered to review the work of either. Within their respective jurisdictions, the one in equity and the other at law, the importance and finality of New Jersey’s Court of Chancery is on a parity with that of the Supreme Court of the State. The decisions of the one are not to be treated as stare decisis any more than are the decisions of the other.
The majority describe the Court of Chancery as “a court of original jurisdiction” and the Supreme Court as “an intermediate appellate court”,3 from which the implication may arise that there is a difference in standing between these two courts with the Court of Chancery in the inferior position. The description is correct so far as it goes, but it fails to suggest the co-extensive territorial jurisdiction of both courts and the equal finality of their respective decrees and judgments, save for a direct appeal from either to the court of last resort. Significance is also attached by the majority to the fact that the Judges of the Supreme Court help to compose the Court of Errors and Appeals, but so does the Chancellor, the presiding judicial officer of the Chancery Court, through whom all writs and decrees in equity issue and who supervises and effectuates the adjudications and decrees filed by the Vice-Chancellors.
If further confirmation of the equal importance of these two tribunals, within the State of New Jersey, should be required, let it be noted that the highest court of the State, the Court of Errors and Appeals, regards them as equally important. In Levy v. City of Elizabeth, 81 N.J.L. 643, 80 A. 498, 500, the Court of Errors and Appeals, upon an appeal from the Supreme Court of New Jersey, said, “Irrespective of the inherent merit of this construction, a ruling uniformly made by the Supreme Court over a course of years should not be set aside by us except for cogent and important reasons”, etc. Later in Ramsey v. Hutchinson, 117 N.J.L. 222, 187 A. 650, 651, again, upon *530appeal from the Supreme Court of New Jersey, the Court of Errors and Appeals quoted the above from Levy v. City of Elizabeth, supra, and added in brackets, after the words Supreme Courts “or the Court of Chancery”. Thus, although the appeal then under consideration was one at law from the Supreme Court of the State, the Court of Errors and Appeals took pains to place the Court of Chancery in juxtaposition with the Supreme Court of the State so far as the importance of the decisions of either court is concerned.
The justification for our saying, as the majority in effect do, that the Chancery Court of New Jersey is a less important tribunal than the Supreme Court of that State, is not apparent to me. And, with that distinction gone, the reason for our refusal to follow the decisions of the Chancery Court, pertinent to this case, vanishes completely.
Moreover, the decision of the majority leads directly to the situation where a statute of New Jersey when construed in chancery can never become the law of the State, so as to be binding on a federal court, until it has been passed upon and affirmed by the Court of Errors and Appeals, while the same statute when construed at law (Supreme Court of New Jersey) will bind us, without utterance from the Court of Errors and Appeals, even though the decision is later taken to the latter court for review and there reversed. This resultant anomaly, of itself, argues strongly for our acceptance of the decisions of the Court of Chancery of New Jersey equally with the decisions of the Supreme Court of that State.
While many cases of the past, as the majority opinion discloses, can be cited for the proposition that it is a decision of the court of last resort of a State which binds a federal court on a question of local law, nevertheless, at- least since the Hilt case, supra, we are also bound by the construction of a State statute made by an important court of the State although not the highest.
The intent, scope and effect of a State statute are, in a very real sense, what important courts of the State impute to it, just as effectively as if the statute had been so enacted by the legislature. Until reversed on appeal or offset by the legislature, a decision of a State court of competent jurisdiction construing a statute becomes a component part of the law thus effected. We cannot, therefore, fairly take a statute separate from the decisions construing it and arbitrarily give it our own independent construction. To do so would be to ascertain less or other than the State law. In this connection the words of Mr. Justice Holmes in his dissenting opinion in Kuhn v. Fairmont Coal Co., 215 U.S. 349, 372, 30 S. Ct. 140, 148, 54 L.Ed. 228, which later found effect in the majority opinion in Erie R. R. Co. v. Tompkins, supra, are apposite: “It is said that we must exercise our independent judgment — but as to what? Surely, as to the law of the states. Whence does that law issue? Certainly not from us. But it does issue, and has been recognized by this court as issuing, from the state courts as well as from the state legislatures.”
Concurrently with the decision of the majority, and growing out of the same New Jersey statute, there will be one rule of law for resident claimants who are committed to the courts of New Jersey, and a different rule for such non-resident claimants as can, by reason of the mere accident of diverse citizenship and amount in controversy, invoke federal-jurisdiction for the enforcement of their equally private and local claims. On the other hand, if we would but follow the decisions of the Chancery Court with respect to the particular statute here involved, it could make no difference from the standpoint of a claimant’s rights whether his action was brought under federal or state jurisdiction. We should leave to the proper authority (Court of Errors and Appeals or State Legislature) any corrections of the Chancery Court’s decisions that may be deemed advisable. This, we should do without speculation on our part as to what -either the Court or the Legislature may do in the future.4 By so *531doing, we shall insure that the federal litigant will fare no differently or better than one in the State courts. Instead, however, the decision of the majority will serve to render the New Jersey statute nonuniform in its application and, at the same time, we shall remain powerless to render this court’s ruling dominant throughout the State or to change the law there obtaining. The intendment of the decision in Erie R. R. Co. v. Tompkins, supra, makes our duty, in such circumstances, equally evident where the question of local law rests on the construction of a State statute by “a high state court of competent jurisdiction”.
Indeed, the statute in the present case “calls for no construction”, not because it is “clear and unambiguous”, but because it has already been construed by “a high State court of competent jurisdiction”.
As both reason and authority seem to me to require that we follow the decisions of the Court of Chancery with respect to the New Jersey statute of 1932, cc. 40 and 41, I am compelled to dissent from the action of the majority, which I do respectfully.

 Judiciary Act of September 24, 1789, c. 20, 28 U.S.C.A. § 725.

 It was said in Swift v. Tyson, 16 Pet. 1, 18, 10 L.Ed. 865, that “the true interpretation of the 34th section limited its application to state law's, strictly local, that is to say, to the positive statutes of the state, and the construction thereof adopted by the local tribunals”, etc.

 The appellate jurisdiction of the Supreme Court of New Jersey, when invoked, is optional with the litigant rather than compulsory. Thus, the appellant may take an appeal from a court of first instance at law to the Supreme Court of New Jersey, or he may appeal directly to the Court of Errors and Appeals; and, if lie chooses to take his appeal to the Supreme Court, either party may thereafter appeal, as of right, to the Court of Errors and Appeals from the judgment of the Supreme Court. N.J. Rev.1877, p. 373, §§ 4 and 5, Rev.Stat. (1937) sections 2:27-351 and 2:27-352, N.J.S.A. 2:27-351, 2:27-352.

 The majority infer from the case of Cutts v. Najdrowski, 123 N.J.Eq. 481, 198 A. 885, that the Court of Errors and Appeals viewed the “deposit in trust” in that case as a gift inter vivos rather than as a testamentary disposition. That deposit, while in trust, had been in a New York bank. After the depositor’s death it had been .withdrawn by the beneficiary and, by him, deposited in a bank in New Jersey. The administratrix of the depositor’s estate sought to recover the money from the beneficiary ' in New Jersey as a part of the depositor’s estate. The Court of Errors and Appeals decided no more than that the so-called tentative trust (which was valid under the law of New York) was governed by the law of New York (the situs of the trust).