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Conflicts Keyed to Currie
Klaxon Co. v. Stentor Elec. Mfg. Co.
Facts
Stentor Elec. Mfg. Co. (Plaintiff) transferred its entire business to Klaxon Co. (Defendant) in 1918 in return for a contractual promise by Defendant to use best efforts to promote the sale of particular items Stentor (Plaintiff) retained patent rights for. Plaintiff was a New York corporation, Defendant a Delaware corporation, and the agreement was executed and partially performed in New York. Plaintiff, suing in diversity jurisdiction, brought suit against Defendant in federal district court in Delaware in 1929 for breach of the agreement. A judgment of $100,000 was rendered in favor of Plaintiff. Plaintiff then moved to modify the judgment to add interest at the rate of six percent from the date the action was commenced. The motion was based on a New York statute and was granted by the district court on the grounds the issue was substantive and that New York law governed the dispute. Defendant appealed the motion, claiming that the district court was bound to follow the substantive law of Delaware in diversity actions. The circuit court of appeals affirmed on the basis that the New York rule was the “better view.”
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