US SUPREME COURT DECISIONS

Questions of public policy, as affecting the liability for acts done, or upon contracts made and to be performed, within one of the states of the Union -- when not controlled by the Constitution, laws or treaties of the United States, or by the principles of the commercial or mercantile law or of general jurisprudence, of national or universal application -- are governed by the law of the state, as expressed in its own constitution and statutes, or declared by its highest court.

A lease to a commercial partnership from a railroad corporation of a strip of its land by the side of its track in the Iowa, for the purpose of erecting and maintaining a cold storage warehouse thereon, contained an agreement that the corporation should not be liable to the partnership for any damage to the building or contents, by fire from the locomotive engines of the corporation, although owing to its negligence. At the trial of an action brought in the circuit court of the United States by the partnership against the corporation to recover for damage to the building and contents by fire from its locomotive engines, owing to its negligence, under a statute of the state making any railroad corporation liable for damage to property of others by fire from its locomotive engines, the plaintiff contended that the agreement was void as against public policy. It appeared that, since this lease, the highest court of the state, in an action between other parties, had at first held a like agreement to be void as against public policy, but, upon a rehearing, had reversed chanrobles.com-red

Page 175 U. S. 92

its opinion, and entered final judgment affirming the validity of the agreement, and it also appeared that its final decision was not inconsistent with its decision or opinion in any other case. Held that the question of the validity of the agreement was one of statutory and local law, and not of the commercial law, or of general jurisprudence, and that the final decision of the state court thereon was rightly followed by the circuit court of the United States.

The case is stated in the opinion.