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Cox rs. Adams.
payable generally, and the payee subsequently indorsed the note to a citizen of Massachusetts, by whom a suit was brought in the court of the latter State against the maker. One point in the case was, whether a discharge of the maker under the insolvent laws of New York, operated as a bar to the suit: the court ruled that it did not; "that it was a debt payable any where by the very nature of the contract, and it is a promise to whomsoever shall be the holder of the note.”
The court in Massachusetts appears to have reasoned thus :- A note made in one country and payable in another country, is gove erned by the law of the place where payable, and inasmuch as a note payable generally is payable any where, the law of that place where its payment is sought to be enforced, governs. The reasoning is not sustained by authority. The case in Massachusetts was between an indorsee and the maker. The transfer of the note, as to the maker or the acceptor, is not a new contract, it is under and part of the original contract and springs up from the law of the place where that contract was made. The rights of the indorsee spring from and are a component part of the original contract; the indorsement is but a substitution of the indorsee for the payee, and it transfers over to him the old liability of the maker. A contract to pay generally is governed by the law of the place where it is made, for the debt is payable there as well as in every other place. Story's Conflict of Laws, sec. 317; 2 Barn. f. Ald. 301; 1 Barn. f. Cress. 16; Story on Bills, sec. 167. The case of Braynard vs. Marshall, stands alone, so far as my research has gone
in the English and American books, and is overruled in Massachusetts. See 13 Mass. R. 1 to 12, 20, 23, 24. Mr. Story in commenting upon the opinion of the court in that case says: “Such a doctrine has never been propounded in any Common Law authority, nor even been supported by the opinion of any foreign jurist.” Story on Bills, sec. 168.
I have been thus particular in reviewing the authority referred to from Massachusetts, because it was relied upon by the able counsel for the defendant in error in this case.
His position was, that this note being payable generally, and indorsed, the defendant, to wit, the indorser, was liable according to the law of the place, to wit, Georgia, where the suit was instituted; and he read to sustain it Braynard vs. Marshall. We shall see too in the further discussion of this subject that the principles settled in that case, for other reasons, have no applicability to this.
Cox rs. Adams.
It is important, in the consideration of this cause, further to repeat the fact, that this was an action by the indorsee against the indorser, in the State of Georgia, upon an indorsement made in Alabama; and, to assert this position, erery indorsement is a new contract. It is an act similar in effect to making a new bill, the indorser being in the nature of a new drawer. 2 Kent, 460; 17 Johns. R. 511; Story's Conflict of Laws, 261, 262; 1 Wheat. Scuyn. N. P. 341; 1 Atk. 282; Per Lord Mansfield, 2 Burow, 674; Per Lord Ellenborough, 3 East, 482. The precise inquiry which remains is, by what law is this contract of indorsement governed? by the w of the contract, or the w of the forum; by the laws of Alabama or Georgia? I have endeavoured to dispose of all collateral questions, so as to leave the field open for this one only; being a single issue, and unencumbered, it will be the more easily determined and illustrated. About it I have no doubt. In the inquiry we need not err, for the way is easily traced by vestiges of genius and learning left by Kent and Story. Among the aids which these distinguished men have afforded the professional world, is that of easy inquiry; we are not left to dig truth from beneath masses of ignorance, to disencumber it of excessive learning, or hunt it through centuries of changing systems and unstable government. They have revealed her, in simple beauty, and majesty severe, even to the professional wayfarer.
The laws of a country, as a general principle, have no binding force beyond its territorial limits. Their authority is admitted in other States, not er proprio rigore, but ex comitate; not on account of any inherent force in the law itself, beyond the limits of the State which enacts it, but because of the comity of nations. Each State has the unquestioned right to legislate upon the rights and obligations of its own citizens, according to its own views of right and expediency. So, also, every independent State will judge for itself how far it shall or shall not admit the force of foreign laws within its own territory. These principles, as well as those we shall further declare in this opinion, are applicable to the States of our own Union, so far as they are not modified by our peculiar system- - so far as the Constitution of the Union does not limit, restrain, or alter them. Subject to these limitations, the States of the Union are independent sovereignties, and as such subject to that part of the jus gentium which relates to contracts. The comity of nations cannot be recognised as capriciousas depending upon arbitrary whims or tyrannic impulses-- it has grown into a system
Cox rs. Adams
whose sanctions are reason, religion, and the common interests of all, for the violation of which, States are amenable to the public sentiment of the world. The rules admitted by civilized States upon this subject, are founded not only in conrenienre, but necessity; without them commerce could not exist between States, civilization could not be advanced, or religion propagated. The whole system of agencies, purchases and sales, mutual credits, and transfers of negotiable instruments, depends upon the jus gentium. In fact nothing so much distinguishes civilized from savage States, as this comity of the nations. The beautiful language of the Institute of Justinian, touching this subject, is well worth perpetuating upon the records of our
cords of our own jurisprudence. “Jus autem gentium, omni humano generi commune est; nam, usu erigente et humanis necessitatibus, gentes humane jura quadam sibi constituerunt. Et ex hoc jure gentium, omnes pene contractus introducti sunt, ut emptio et renditio, locatio et conductio, societas, depositum mutuum, et alii innumerabiles." 1 Inst. Lib. 1, tit. 2, sec 2.
The first proposition we assert is this—as a general rule the ralidity of a contract is to be decided by the law of the place where it is made; if valid there, it is by the general law of nations held valid every where, by the tacit or implied consent of the parties. Story's Conflict of Laws, sec. 241 ; 2 Mass. 88, 89; 1 Peters C. C. R. 317; 2 Kent, 457, 458, 8 ed.; 2 Har. f. Johns. R. 193, 221, 228; 3 Conn. R. 253 ; 2 New Hamp. R. 42; 1 Bing. N. O. 151, 159 ; 13 Peters R. 65; 11 Louis. R. 465; 8 Martin R. 95; 8 Peters R. 361, 372.
The same rule applies to the invalidity of contracts, vice versa. If void or illegal by the law of the place of the contract, they are generally held void and illegal every where. This principle is founded in the elements of natural justice. If a contract be roid in its origin, it is inconceivable how validity can be given to it in any other country. It is no contract from the beginning, and no act of foreign legislation can give vitality to it. The Civil Code thus expounds the rule: “Nullum enim pactum, nullam conventionem, nullum contractum, inter eos rideri volumus subsecutum, qui contrahunt lege contrahere prohibente.” 1 Gallis. R. 375; 2 Mass. R. 88, 89; 1 Nott f. McCord, 173; 2 Har. f. Johns. R. 193, 221, 225; 2 Johns. Cas. 355; 2 Burrow, 1077; 2 Stra. 732; 7 Term R. 237; 2 Kent, 457, 458, 3 ed.; 2 Mason R. 459; 13 Peters R. 65, 78.
Again the lex loci contractus, controls the nature, construction and interpretation of contracts. 2 Kent, 454; Institute 1, 2, 2;
Cox rs. Adams.
Pardessus Droit Commercial, Tome 5, p. 1482; 3 Gill. f. Johns. 234, and authorities cited under the last two heads.
The three last propositions as we believe, cover all the principles involved in this cause. If the nature, ralidity and interpretation of a contract depend upon the law of the contract, we might close this discussion with the declaration, that the nature of this contract of indorsement, that is to say, the nature and extent of the rights and obligations of the parties to it, are to be controlled by the laws of Alabama where it was made, and that the contract must be interpreted by the same laws. To these propositions however, there are exceptions; though true generally, yet they are not true universally. The exceptions extend to contracts made in one State, which are injurious to the public rights, or offend the morals, or contrarene the policy, or riolate the public law of another State. In case of all such contracts, they cannot by the jus gentium be enforced in a foreign State. 2 Kent, 458; 1 Gall. R. 371; 1 Mason R. 381; 6 Mass. R. 358; 13 Martin R. 202; 13 Mass. 1; 1 Johns. Cas. 139; Story's Com. Conflict of Laws, 203, 215.
It cannot be contended that the law of Alabama, which charges the indorser only when the maker is sued to insolvency, and only if sued at the first court after the maturity of the note, is injurious to the public rights of Georgia, or offends her morals, or contravenes her policy, or violates any public law. This case is not within the exceptions.
Another principle applicable to this cause is this, parties are presumed to contract in reference to the laws of the country in which the contract is made. 2 Kent, 458; 6 Wharton, 331; S Paige's R. 446, 525; 9 N. H. R. 271; 2 Metcalf, R. 8; Story on Bills, 184, 188. The indorser is presumed to have put his name upon this
paper, with an eye to his liability under the laws of Alabama, and the indorsee received it with a presumed knowledge and an implied recognition of those laws; they in fact enter into and constitute a part of the contract; and now that he is admitted into the Courts of Georgia to enforce his contract, he is estopped from denying the binding force of the Alabama law. By denying that, he denies his own contract. As before stated, we might safely place our judgment upon the general principles already referred to. I shall however apply them briefly to the facts of this case and refer to some authorities bearing directly upon it; euthorities which settle the principle that an indorser of a negotiable bill or note, is liable according to the law of the place where the indorsement is made.
Cox is. Adams.
This, it is true, is only a re-assertion of the general principle already stated. Yet the authorities I allude to, apply the principle directly to this cause. The rule we have seen is, that the lex loci controls the contract. If this action was against the maker of this note in favour of the indorsee, in the State of Alabama, the law of Georgia and not of Alabama would prevail; because it was made in Georgia. Suppose that the maker had been discharged under the insolvent laws of this State, and moving into Alabama, was there sued; it cannot be questioned but that his discharge could be successfully pleaded in that State. This was the point made, as we have had occasion before to remark in the Massachusetts case, and the plea was overruled; but that case and the principle asserted by it, have been over and over again repudiated. Nor would the fact that the note is payable generally, make any difference; the indorsement of such a note creates no new contract as between the indorsee and the maker; it only transfers the old liability. And inasmuch as the note being payable every where, is thereby payable in Georgia, the maker is liable according to the laws of Georgia. It would indeed be a hard case upon the maker, to bold him liable all over the world, as variously as there are in it different jurisdictions.
But it is said that all this may be true, as between the holder and maker of a note, or acceptor of a bill, yet not true as between the holder and the indorser. That the indorser of this note assumed the liability of the maker, and he being liable according to the laws of Georgia, therefore the indorser is liable according to the laws of Georgia. This seems to have been the view of this cause taken by the Court below. If the indorser only assumed the old liability of the maker, then the conclusion arrived at by the presiding judge is a sound one. But this is not true. The indorsement was a new contract; and the law of the place of that contract governs it. It is as much under the operation of the rules hereinbefore promulgated, as if it was a primary original contract. In commenting upon the case of Braynard vs. Marshall, founded upon a note payable generally, Mr. Story says that the indorsement of that note was a contract between the indorsee and his indorser, subject to the law of the place where made. Story on Bills, sec. 167. It is true that in this case the indorser adopts the place of payment by his indorsement; that place is every where, and as much in Alabama as any other place; and, because the note is