Klaxon Co. v. Stentor Electric Manufacturing Co.
United States Supreme Court
313 U.S. 487 (1941)
In 1918, Stentor Electric Manufacturing Co. (Stentor) (plaintiff), a New York corporation, entered into an agreement with Klaxon Co. (Klaxon) (defendant), a Delaware corporation, whereby Stentor would transfer its business in certain patented devices to Klaxon in exchange for a portion of Klaxon’s profits from the continuation of the business. The agreement was made and substantially performed in New York. In 1929, Stentor sued Klaxon in a federal district court in Delaware for breach of contract. The court’s jurisdiction was based on diversity of citizenship. In 1939, Stentor was awarded $100,000 after a jury trial. Stentor moved to have interest added to the award, from the date that the action was commenced through the date of the judgment, pursuant to New York Civil Practice Act § 480. The district court granted Stentor’s motion on the grounds that the law of New York, as the place of performance, applied. No consideration of Delaware law was made. The court of appeals affirmed. Klaxon petitioned the United States Supreme Court for certiorari.
Rule of Law
Holding and Reasoning (Reed, J.)
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