Vol. II.] CORY V. CARTER. [No. 2. convey certain described lots in the city of Washington, which belonged to the United States, to the trustees for colored schools for the cities of Washington and Georgetown in said district, for the sole use of schools for colored children in that district; the said lots having been designated and set apart by the secretary of the interior to be used for colored schools; and the said lots, whenever converted to any other use, to revert to the United States. Acts Sess. 1, 39 Cong. 354. At the 42d session an act was passed entitled "An act to amend an act entitled An act governing the colored schools of the District of Columbia,'" approved March 3, 1873, which fixes the number of the board of trustees of schools for colored children in the District of Columbia, their mode of appointment, their duties, &c., and authorized, the governor of the district to appoint a superintendent of schools for colored children, who is to receive a salary of $2,500 annually, for his services, &c., and directs the proportion of school money then due, or afterward to become due to the board of trustees of colored schools from the cities of Washington and Georgetown, to be paid to the treasurer of said board, and not to the trustees as provided in the act of July 23, 1866. Acts Sess. 3, 42 Cong. 260. This legislation of Congress continues in force at the present time, as a legislative construction of the fourteenth amendment, and as a legislative declaration of what was thought to be lawful, proper, and expedient under such amendment, by the same body which proposed such amendment to the states for their approval and ratification. We are very clearly of the opinion that the act of May 13, 1869, is constitutional, and that while it remains in force, colored children are not entitled to admission into the common schools which are provided for the education of the white children. In our opinion the court below erred in affirming the action of the court in special term, and the judgment is reversed with costs, and the cause is remanded to the court below with directions to that court to overrule the judgment of the court in special term, in overruling the demurrer to the petition for a mandate. OSBORN, J., dissenting. I am inclined to think that the allegations in the complaint are not sufficient to entitle the appellee to a mandate, and that the judgment of the court below ought to be reversed. But there is very much in the foregoing opinion in which I do not concur. If I desired to do so, I could not, during the short time that I am to remain in my present position, properly and satisfactorily consider the question discussed, and must, therefore, content myself with this qualified dissent. Vol. II.] JERRETT v. HONE. [No. 3. CIRCUIT COURT OF THE UNITED STATES.- SOUTHERN DISTRICT OF GEORGIA. 1. In passing upon questions of general commercial law, the federal courts are not bound by the decisions of the courts of the state where the contract in question was made, or is sought to be enforced. 2. An accommodation acceptor of a bill of exchange transferred before maturity by the drawers in liquidation of their own preexisting debt cannot defend an action against himself on the bill by alleging that he was an accommodation acceptor only, and that the fact was known to the holders of the bill when they took it. THIS case, heretofore unreported, was tried at the November term, 1873, by Woods and Erskine, JJ., and a jury. It went off on the motion of plaintiffs to exclude from the jury the evidence offered by defendant to sustain his defence. The facts are stated in the opinion. Mr. Thomas M. Norwood, for plaintiffs. Messrs. Yates Levy & Geo. A. Mercer, contra. WOODS, J. This action is brought by plaintiffs as holders against the defendant as acceptor of a bill of exchange of which the following is a copy: "$2,5871%%. NEW YORK, June 25, 1870. "Thirty days after date pay to the order of ourselves twenty-five hundred and eighty-seven dollars with exchange on New York, and CHRISTOE & STRUTHERS. charge the same to account of The bill was indorsed by Christoe & Struthers, and accepted by defendant. To the declaration upon this bill the defendant has pleaded the general issue and a special plea to the effect that the acceptance was without consideration, and for the accommodation of the drawers, and that the bill was given to the plaintiffs in liquidation of an antecedent debt due from the drawers to the plaintiffs, and that no injury or detriment has accrued to the plaintiffs, or benefit to the drawers or defendant, by reason of said acceptance. The facts, about which there is no dispute, are in substance these: On the 25th of June, 1870, Christoe & Struthers were a firm doing business in the city of New York. They were indebted to the plaintiffs, John Jewett & Sons, who were pressing them for payment. Christoe & Struthers being unable to pay their indebtedness to plaintiffs applied to the defendant, William Hone, of Savannah, for assistance, which he assented to give. To this end Christoe & Struthers drew the bill in question which was indorsed by Christoe & Struthers and accepted by Hone, who was purely an accommodation acceptor and received no consideration for his VOL. II. 7 Vol. II.] JERRETT v. HONE. [No. 3. acceptance, and Christoe & Struthers agreed with him to pay the bill at maturity. The bill so indorsed and accepted was before maturity transferred by Christoe & Struthers, who were "hard pressed," to the plaintiffs, who were their creditors, "in liquidation of a debt due them," and the plaintiffs"received it for the amount expressed on its face." Jewett & Sons knew when they received the draft that Hone was an accommodation acceptor. The question presented by the case should have been raised on demurrer to the sufficiency of the plea. Such demurrer was not filed, and the point in controversy is submitted to the court upon the motion of plaintiff to exclude the evidence of the defendant tending to establish his special plea. The point for determination is this: Can an accommodation acceptor of a bill of exchange, transferred before maturity by the drawers, in liquidation of an antecedent debt, set up as a defence to an action against him upon the bill the fact that he was an accommodation acceptor, that fact being known to the holders when they received the bill? It is claimed by the defendant that the contract sued on was a New York contract, made and to be performed in that state and that it must be governed by the law of that state. It is further insisted, that by the law of New York, as set forth in the decisions of the courts, the facts set up in the special plea would be a good defence to this action, and we are cited to the following cases: Wardell v. Howell, 9 Wendell, 170; Rosa v. Brotherson, 10 Ib. 86; Kent v. Palmer, 12 Ib. 523; Root v. French, 13 Ib. 570. Is this court bound by these decisions, admitting that they set forth the settled doctrine in New York? This question was raised and decided in the negative by the supreme court of the United States in Swift v. Tyson, .16 Peters, 1; in which the court says, in referring to the same New York decisions cited in this case: "It is observable that the courts of New York do not found their decisions upon this point upon any local statute or positive, fixed, or ancient local usage, but they deduce the doctrine from the general principles of commercial law. It is, however, contended that the 34th section of the Judiciary Act of 1789, c. 20, furnishes a rule obligatory upon this court to follow the decisions of the state tribunal in all cases to which they apply.. That section provides that "the laws of the several states, except when 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 cases where they apply." "In order to maintain the argument it is essential, therefore, to hold that the word laws,' in this section, includes within the scope of its meaning the decisions of the local tribunals. In the ordinary use of language it will hardly be contended that the decisions of courts constitute laws. They are at most only evidence of what the laws are, and are not of themselves laws. They are often reëxamined, reversed, and qualified by the courts themselves whenever they are found to be either defective, or ill-founded, or otherwise incorrect. The laws of a state are more usually understood to mean the rules and enactments promulgated by the legislative authority thereof, or long established local customs having the Vol. II.] JERRETT v. HONE. [No. 3. force of laws. In all the various cases which have hitherto come before us for decision, this court have uniformly supposed that the true interpretation of the 34th section limited its application to state laws strictly local, that is to say to the positive statutes of the state and the construction thereof adopted by the local tribunals, and to the rights and titles to things having a permanent locality, such as the rights and titles to real estate and other matters immovable and infra-territorial in their nature and character. It has never been supposed by us that the section did apply or was designed to apply to questions of a more general nature, not at all dependent upon local statutes or local usages of a fixed and permanent operation; as for example to the construction of ordinary contracts or other written instruments, and especially to questions of general commercial law, where the state tribunals are called upon to perform the like functions as ourselves, that is, to ascertain upon general reasoning and legal analogies what is the true exposition of the contract or instrument, or what is the just rule furnished by the principles of commercial law to govern the case..... The law respecting negotiable instruments may be truly declared in the language of Cicero, adopted by Lord Mansfield in Luke v. Lyde, 2 Burr. 882, 887, to be in a great measure not the law of a single country, but of the commercial world. Non erit alia lex Roma, alia Athenis, alia nunc, alia posthac, sed et apud omnes gentes et omni tempore una eadumque lex obtinebat." This extract from the decision of the supreme court of the United States shows conclusively that we are not to be controlled by the decisions of the local tribunals of New York, in passing upon the rights of the parties in this action, even if their decisions were uniform. But they are not. Thus, in Warren v. Lynch, 5 Johns. 239, the supreme court of New York held that a preëxisting debt was a sufficient consideration to entitle a bona fide holder without notice to recover the amount of a note indorsed to him, which might not as between the original parties have been valid, and the same doctrine was held by Mr. Chancellor Kent, in Bay v. Coddington, 5 Johns Ch. 54. And the cases in 10, 12 and 13 Wendell, supra, have by subsequent decisions of the supreme court of judicature of the state been overruled. Bank of Salina v. Babcock, 21 Wendell, 499; Bank of Sandusky v. Scovill, 24 Ib. 115. We think it, therefore, clear that in determining the liability of the defendant we are to be guided by the rule of the general law merchant, and not by the shifting and conflicting decisions of any local tribunals. Do the facts, then, as they appear in this case constitute a defence to the action. We think the current and weight of authority sustains the doctrine that a bona fide holder, taking a negotiable note in payment of or as security for a preëxisting debt, is a holder for a valuable consideration entitled to protection against all the equities between the antecedent parties. Swift v. Tyson, 16 Peters, 1; Coolidge v. Payson, 2 Wheat. 66; Townsley v. Sumrall, 2 Pet. 170; Atkinson v. Brooks, 26 Vt. 574; Poirier v. Morris, 20 Eng. Law & Eq. 103; Petrie v. Clark, 11 Sergt. & R. 377; Gibson v. Conner, 3 Kelly, 47. In Swift v. Tyson, supra, the supreme court of the United States says: "It becomes necessary for us upon the present occasion to express our own opinion of the true result of Vol. II.] JERRETT V. HONE. [No. 3. the commercial law upon the question now before us. And we have no hesitation in saying that a preëxisting debt does constitute a valuable consideration, in the sense of the general rule, as applicable to negotiable instruments. Assuming it to be true that the holder of a negotiable instrument is unaffected with the equities between the antecedent parties of which he has no notice only when he receives it in the usual course of trade and business for a valuable consideration before it becomes due, we are prepared to say that receiving it in payment of or as security for a preëxisting debt is according to the known usual course of trade. This question has several times been before this court, and it has been uniformly held that it makes no difference whatsoever as to the rights of the holder whether the debt for which the negotiable instrument is transferred to him is a preëxisting debt or is contracted at the time of the transfer. In each case he equally gives credit to the instrument." In Atkinson v. Brooks, 26 Vt. 574, supra, the court says: "But it has often been claimed that there is an essential difference in principle between taking a current note or bill in payment, and as security for a prior debt then due. The transactions are certainly different in form at least. But it seems to me the ordinary case of taking such a security as payment or as collateral to the prior debt is the same in principle. One whose debt is due in the commercial world must pay it instantly or he becomes bankrupt. If instead of money he gives a bill or note, either on time or at sight, whether this is in form payment or collateral to his debt, he gains time and saves the disgrace and ruin consequent upon stopping payment. And in either case there is an implied undertaking that he shall wait upon his debtor till the result of the new security can be known, and in both cases when that proves unproductive the creditor may pursue his original debt or he may sue the prior parties on the new security. According to the general commercial usage there is no essential difference in principle whether a current note or bill is taken in payment of or as collateral security for a prior debt, provided the note is in both cases truly and unqualifiedly negotiated so as to impose upon the holder the obligation to conform to the general law merchant in enforcing payment." In Percival v. Frampton, 2 Cromp., Mees. & Rosc. 180, Parke, Baron, says: "If the note were given to the plaintiffs as a security for a previous debt, and they held it as such, they might be properly stated to be holders for a valuable consideration." In Palmer v. Richard, 1 Eng. Law & Equity, 529, it was held that it was not material whether the note or bill be deposited as security for an advance or in payment. In Poirier v. Morris, supra, Lord Campbell, C. J., in giving judgment, says: "There is nothing to make a difference between this and a common case where a bill is taken as security for a debt, and in that case an antecedent debt is a sufficient consideration." In the same case Crompton, J., says: "Whether the bill was a collateral security, or whether it had the effect of suspending the payment of the antecedent debt, is quite immaterial." Such is regarded as the settled law in England at the present day, and most of the states of the Union have virtually adopted the rule as laid down in Swift v. Tyson. In Georgia, Gibson v. Conner, supra, expressly decides that taking |