Klaxon Co. v. Stentor Electric Manufacturing Co.

Stentor Electric Manufacturing Co. (Stentor) (plaintiff), a New York corporation, contracted in 1918 with Klaxon Co. (Klaxon) (defendant), a Delaware corporation, to transfer its patented-device business in exchange for a share of profits, with the agreement made and largely performed in New York; Stentor sued Klaxon for breach in a Delaware federal court based on diversity jurisdiction and, after a 1939 jury verdict awarding $100,000, moved to add prejudgment interest under a New York statute. The district court granted the motion, applying New York law as the place of performance without considering Delaware law, and the court of appeals affirmed, prompting Klaxon's petition for certiorari.