It is conceded that if the Massachusetts law governs the issue is doubtful, but the coupons being negotiable instruments, the question of whether interest is allowable after maturity is a question of general commercial law and the federal court will follow its independent judgment as determined in view of the weight of authority in all the states if it has been reasonably well settled. Swift v. Tyson, 16 Pet. 1, 19, 10 L. Ed. 865; Presidio County v. Noel-Young Bond Co., 212 U.S. 58, 73, 29 S. Ct. 237, 53 L. Ed. 402; Aetna Life Ins. Co. v. Moore, 231 U.S. 543, 34 S. Ct. 186, 58 L. Ed. 356; American Trust Co. v. Proctor (C.C.A.) 42 F.2d 384. We think it is too well settled now by federal decisions to apply the local rule, whatever it may be, and that coupons whether detached or not, if negotiable instruments, bear interest after maturity at the legal rate where payable.
IHES is a Massachusetts company and the contract is one calling for payment in Massachusetts and containing a provision (Article Twelve, Section 3 of the trust indenture) for the construction and performance of the contract under the law of Massachusetts. It is contended that the exaction of compound interest is contrary to the policy of the Massachusetts law. Numerous Massachusetts cases have been cited in which payment of compound interest was refused in the absence of any contractual provision requiring it, but where interest on overdue interest is expressly provided for by the terms of the contract such a provision is enforceable in Massachusetts. de Cordova v. Weeks, 246 Mass. 100, 140 N.E. 269; American Trust Co. v. Proctor, 4 Cir., 42 F.2d 384. There remains the question of whether the payment would be fair and equitable under ยง 11(d) of the Act.
cases of uncertainty we steer away from a collision between courts of state and nation when harmony can be attained without the sacrifice of ends of national importance." On the question here to be decided, however, the courts of the nation have spoken in no uncertain terms; the issue, far from being "balanced with doubt," has been resolved, with but a single exception, in a manner contrary to the New York decisions. Gelpcke v. City of Dubuque, 1 Wall. 175, 17 L. Ed. 520 (1863); Aurora City v. West, 7 Wall. 82, 19 L. Ed. 42 (1868); Town of Genoa v. Woodruff, 92 U.S. 502, 23 L. Ed. 586 (1875); Cromwell v. County of Sac, 96 U.S. 51, 24 L. Ed. 681 (1877); Amy v. City of Dubuque, 98 U.S. 470, 473, 25 L. Ed. 228 (1878); Edwards v. Bates County, 163 U.S. 269, 16 S. Ct. 967, 41 L. Ed. 155 (1896); Sears v. Greater New York Development Co., 51 F.2d 46 (C.C.A. 1st, 1931), cert. den. 284 U.S. 668, 52 S. Ct. 42, 76 L. Ed. 565; Roswell Drainage Dist. v. Parker, 53 F.2d 793 (C.C.A. 10th, 1931); cf. American Trust Co. v. Proctor, 42 F.2d 384 (C.C.A. 1st, 1930), cert. den. 282 U.S. 867, 51 S. Ct. 74, 75 L. Ed. 766. Furthermore, the precedents in this court, the New York Municipal Railway Case, the B.R.T. Receivership, and the New York Railways Receivership, allowing interest after maturity on interest coupons, should be followed, unless clearly erroneous. Columbus, Sandusky Hocking R. Co. Appeals, 109 F. 177 (C.C.A. 6th, 1901), cert. den. Metropolitan Trust Co. v. Mercantile Trust Co., 183 U.S. 700, 22 S. Ct. 936, 46 L. Ed. 396, which is not distinguishable from the other federal cases, alone supports the New York rule.