Conflict of Laws

Conflict of Laws
A Survey of American Jurisprudence
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Conflict of Laws:
A Survey of American Jurisprudence
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Ateneo de Manila University- School of Law

Block 3C 2017
CONTRIBUTORS:
Kalaw, Mariliza
Kho, Marion Nerisse
Marcelo, Natasha Daphne
Mora, Jemannoel
Narciso, Ana Mari Antoinette
Oaminal, Henry Jr.
Pelito, Lois Philippe
Peralta, Dorothy
Porta, Angelique Fatima
Ramos, Roween Annielle
Rapal, Maria Fraulaine May
Retirado, Ma. Concepcion
Rodriguez, Ma. Victoria
Ruiz, Maria Bianca Leanne
Seña, Luis Alfonso
Tsoi, Charla Larraine
Zamora, Ivan Darwin
In partial fulfillment of the requirements of the course Conflict of Laws under Atty.
Eduardo Robles, 2nd Semester, A.Y. 2016-2017
TABLE OF CONTENTS
Milne v. Moreton 6 Am. Dec. 466...................................................................................................1

Green v. Van Buskirk 19 L. Ed. 109.................................................................................................3
Minor v. Cardwell 90 Am. Dec. 390................................................................................................5
Thompson v. Waters 12 Am. Rep. 243............................................................................................7
Stack v. Cedar Co. 114 N. W. 876....................................................................................................9
Finney v. Guy 82 N. W. 595...........................................................................................................10
Hunt v. Whewell 99 N.W. 599......................................................................................................13
Fox v. Telegraph-Cable Co. 120 N.W. 399.....................................................................................18
Siegel v. Robinson 93 Am. Dec. 775..............................................................................................20
Huntington v. Attrill 36 L. Ed. 1123...............................................................................................22
Russell v. R. Co 45 Pac. 323...........................................................................................................25
Com. Nat. Bank v. Kirk 71 Atl. 1085..............................................................................................27
Warner v. Jaffray 48 Am. Rep. 616...............................................................................................28
In re Waite 2 N.E. 440...................................................................................................................31
Barth v. Backus 35 N.E. 425..........................................................................................................32
Giman v. Lockwood 18 L. Ed. 432.................................................................................................34
Fowler v. Lamson 34 N.E. 932.......................................................................................................36
Young v. Farwell 28 N.E. 845........................................................................................................40
Tuttle v. Bank 44 N.E. 984.............................................................................................................44
Nat. Bank of Auburn v. Dilingham 42 N.E. 338.............................................................................46
Marshall v. Sherman 42 N.E. 419..................................................................................................48
Scudder v. Bank 91 U.S. 411.........................................................................................................50
Milliken v. Pratt 28 Am. Rep. 241.................................................................................................52
Pritchard v. Norton 106 U.S. 124..................................................................................................55
Ruhe v. Buck 27 S.W. 412.............................................................................................................59
Atwood v. Walker 61 N.E. 58........................................................................................................61
Wolf v. Burke 32 Pac. 427.............................................................................................................63
Southern Express Co. v. Gibbs 46 South 465................................................................................65
Beggs vs. Bartels 46 Atl. 874.........................................................................................................67
Fidelity Mut. Life Assn. v. Jeffords 107 Fed. 402...........................................................................69
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Northwestern S. S. Co. v. Ins. Co. 161 Fed. 166............................................................................71
Equitable Life Assur. Soc. Of U.S. v. Trimble 83 Fed. 85................................................................72
Phipps v. Harding 70 Fed. 468......................................................................................................74
Smith v. Ins. Co. 5 Fed 582............................................................................................................76
Sturdivant v. Bank 60 Fed. 730.....................................................................................................78
Wayman v. Southard 6 L. Ed. 253.................................................................................................80
Hall v. Cordell 35 L.Ed. 956...........................................................................................................83
Mutual Life Ins. Co. v. Hill 48 L. Ed. 788........................................................................................85
Lewisohn v. Steamship Co. 56 Fed.. 602.......................................................................................88
Dimpfel v. Wilson 6 Atl. 561.........................................................................................................89
Lanham v. Lanham 117 N.W. 787.................................................................................................91
Pennegar v. State 10 S.W. 305......................................................................................................94
Johnson v. Jonson 106 Pac. 500....................................................................................................96
Garcia v. Garcia 127 N.W. 586......................................................................................................98
State v. Fenn 92 Pac. 417............................................................................................................100
Bronson vs. Lumber Co. 46. N.W. 570........................................................................................102
Cochran v. Benton 25 N.E. 870...................................................................................................105
Post v. Bank 28 N.E. 978.............................................................................................................106
Hauensten v. Lynham 100 U.S. 490............................................................................................107
Peck v. Hibbard 62 Am. Dec. 605................................................................................................109
Peck v. Mayo 39 Am. Dec. 605....................................................................................................111
Young v. Harris 61 Am. Dec. 170.................................................................................................112
Brown v. Jones 25 N.E. 452.........................................................................................................114
Rathbone v. Coe 50 N.W. 620.....................................................................................................115
Tarbox v. Childs 43 N.E. 124.......................................................................................................117
Fanning v. Consequa 8 AM. Dec. 442..........................................................................................118
Odom v. Security Co 18 S.E. 131.................................................................................................119
Matthews v. Paine 46 .W. 463....................................................................................................120
Bank of the United States v. Lee 10 L. Ed. 81.............................................................................123
Green v. Van Buskirk 19 L. Ed. 109..............................................................................................125
Hervey v. Locomotive Works 93.S. 664.......................................................................................127
Mumford v. Canty 99 Am. Dec. 525............................................................................................130
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Keenan vs. Stimson 20 N.W. 364................................................................................................132
Jhonson v. Hughes 8 South 147..................................................................................................134
Harrison v. Sterry 3 L. Ed. 104.....................................................................................................135
Vining v. Miller 67.W. 126..........................................................................................................138
Commonwealth v. Lane 18 Am. Rep. 509...................................................................................141
Njus v. Rey. Co. 40 N.W. 527......................................................................................................143
Erickson v. S. S. Co. 96 Fed. 80....................................................................................................145
Burnett v. R. Co 34 Atl. 972.........................................................................................................148
Lehigh Valley Railroad Company v. Pennsylvania 145 U.S. 192..................................................150
Le Bourgogne 210 U.S. 95...........................................................................................................152
Armstrong v. Lear 6 L. Ed. 589....................................................................................................154
Kraft v. Wickey 23 Am. Dec. 569.................................................................................................155
Noonan v. Bradley 20 L. Ed. 757.................................................................................................157
Cox v. United States (1832) 8 L. Ed. 359.....................................................................................160
Duncan v. U.S. 8 L. Ed. 739.........................................................................................................162
Noble v. Oil Co. 21 Am. Rep. 66..................................................................................................164
The Rio Grande 23 L. ED. 158......................................................................................................167
Pennoyer vs. Neff 24 L. Ed. 565..................................................................................................169
Rose v. Himely 2 L. Ed. 608.........................................................................................................171
Mc Vicker v. Beedy 50 Am. Dec. 666..........................................................................................174
Speed v. May 55 Am. Dec. 540...................................................................................................176
Ingraham v. Geyer 7 Am. Dec. 132.............................................................................................178
Blake v. Williams 17 Am. Dec. 372..............................................................................................180
Cook v. Van Horn 50 N. W. 893...................................................................................................182
Holmes v. Remsen 11 Am. Dec. 269...........................................................................................184
Blanchard v. Russell 7 Am. Dec. 106...........................................................................................186
Cook v. Moffat 12 L. Ed. 159.......................................................................................................188
Wheaton v. Peters 8 L. ED. 1055.................................................................................................190
Smith v. Alabama 124 U.S. 564...................................................................................................192
Swift v. Tyson 10. Ed. 865...........................................................................................................195
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Milne v. Moreton
6 Am. Dec. 466
Doctrine: When a contract is made in one state or county, to be performed in another state or
county, its validity and effect are determined by the law of the place of the performance. Although
the distribution of the deceased’s personal estate is to be according to the lex domicilii, the
payment of his debts is to be according to the order and in the manner prescribed by the law of
the country where the assets are administered. This being a matter of remedy, is subject to the
lex fori.
Facts:
1. Moreton is an American citizen. Topham is an English citizen. . Topham, through
Moreton’s agent in Liverpool, transmitted goods to be sold on commission to Moreton.
The goods were sold in the US but the net proceeds were less than the sum advanced in
Liverpool, so there was an attachment issued for the balance.
2. A commission of bankruptcy was issued in England against Topham. There was a
assignment involving all of his real and personal estate. His goods were given to Milne,
the one who garnished his estate (called the GARNISHEE).
Issue: Whether the assignment of the commissioners in a foreign country prevails against the
attaching creditor in the US
Held: NO. The foreign bankruptcy does not prevail over an attaching US creditor. Judgment of
the district court affirmed.
Ratio:
1. The municipal laws of all kingdoms and countries have no binding force beyond their
respective limits. Such regulations are purely territorial in their effect. The claim of
preference in this instance in favor of the assignees, is grounded upon the ‘comity of
nations’.
2. The assignment by the British commissioners in a controversy between them and a US
citizen is of no consideration. It transfers no legal or equitable right. The assignment by
the commissioners is compulsory. It is penal in nature.
3. The transaction originated in England, but the business was done in America. Moreton
lived in NY, advanced money in England, and Topham made a consignment to Moreton.
But the goods were to be sold in America. Topham became indebted to Moreton in the
US.
4. When a contract is made in one state or county, to be performed in another state or
county, its validity and effect are determined by the law of the place of the performance.
5. A prior assignment in bankruptcy, under a foreign law, will not be permitted to prevail
against a subsequent attachment by an American creditor of the bankrupt’s effects found
in the US; and the courts will not subject its citizens to inconvenience of seeking their
dividends abroad when they have means to satisfy them under their own control.
6. The effects in the hands of the garnishee were liable to the attachment of Moreton,
notwithstanding the bankruptcy of Topham. An interest arising on a contract in the US
follows the person as much as the ownership of a chattel. The domicile of the owner
draws personal property with it, and it is the same thing as if in the home government.
Trahit additque acervo.
7. An assignment by commissioners of bankrupt in England does not operate as a legal or
equitable transfer of property in the US, so as to prevent an American creditor from
resorting to that property for payment, or the bankrupt from transferring it. It does not
prevent an attachment of the bankrupt’s estate by a creditor of the US. In general, when
the claims of a foreign assignee are brought into conflict with those of our own citizens,
the latter will have the preference. Notwithstanding an assignment by commissioners of a
bankrupt in England, an American creditor may attach the effects of the bankrupt here.
Green v. Van Buskirk
19 L. Ed. 109
Doctrine: The state which has dominion over property located therein has the right to regulate its
transfer and subject it to process and execution.
Facts:
1. Bates, a resident of New York, owned safes in Illinois on which he gave a chattel
mortgage to secure a debt in favor of Van Burskirk and others.
2. Two days after, Green, also a resident of New York and a creditor of Bates, sued in the
Illinois Court a writ of attachment, caused it to be levied on the sage of Bates, got
judgment in the attachment, and had the safes sold in satisfaction of his debt.
a. At the time of the levy of this attachment, the mortgage had not been recorded in
Illinois nor had possession of the property been delivered under it nor had the
attaching creditor notice of its existence.
3. After the levy of the attachment, Green received notice of the mortgage, and the claim
under it, and Van Buskirk and the others, were informed of the attachment but they did
not make themselves parties to it and contest the right of Green to levy on the safe,
which was authorized under Illinois law.
a. Under Illinois law, any debtor can sue out a writ of attachment against a non-
resident debtor. It is also provided by these law that mortgages of personal
property are void as against 3 rd persons, unless acknowledge and recorded, and
unless the property be delivered to and remain with the mortgagee.
4. Van Buskirk sued Green in the New York Courts for taking and converting the safes, sold
under the attachment.
5. Green pleaded in bar the attachment proceeding in Illinois
6. The New York Court ruled that the New York law was to govern the case and not the law
of Illinois, although the property was situated there.
a. Under New York law, title to the safes passed on execution and delivery of the
mortgage.
7. The Green appealed, arguing that the Illinois judgment had been denied full faith and
credit.
Issue: Whether the proceedings in the Illinois court have effect over the properties located in
Illinois and the parties who are all citizens of New York?
Held: Yes.
Ratio:
1. The New York court is required to recognize that title to the safe was transferred under
the lawful Illinois sale.
2. Illinois had dominion over property located within the state and had the right to regulate
its transfer and subject it to process and execution.
a. Each state has the right to regulate the transfer of property, both personal and
real, within its jurisdiction, and this right exists and may be exercised as to
personal property of non-residents, if within the state, as well as residents.
3. The fiction of law that the domicile of the owner draws too it his personal estate wherever
it may happen to be, yields whenever the actual situs of the property should be
examined.
4. By the laws of Illinois, an attachment on personal property will take precedence of an
unrecorded mortgage executed in another State were record is not necessary, though
owners of the chattels, the attaching creditor, and the mortgage creditor, are all residents
of such other State.
Minor v. Cardwell
90 Am. Dec. 390
Doctrines:
1. Personal property has no locality, but is subject to the law which governs the person of
the owner
2. Slaves which have been held by a married woman in another state, under a law which
made them real estate and exempt from all liability for the husband's debts, become, on
her removal to the state of Missouri, the absolute property of the husband and liable for
his debts by the laws in Missouri.
Facts:
1. A married woman, at the time of her marriage, owned slaves. The slaves were then
brought to Missouri.
2. The statutes of Kentucky provide that such slaves should be treated as real estate and
that no slave shall be liable to the debts of her husband, or be attached, levied on, or sold
for his debts.
a. It was not intended that the wife should hold the property as separate property, no
title vesting in the husband, but merely that the property should not be sold for his
debts, and was therefore only an exemption law, and could have no extra-territorial
force or effect.
3. Under the law of Missouri, slaves were personal property, and slaves belonging to the
wife became the absolute property of the husband, and were liable to be levied on and
sold under execution, in like manner as other personal property, for his debts.
Issue: Whether slaves which were held by a married woman in Kentucky are to be considered in
the same manner, conditions, and exemptions in the laws of Missouri.
Held: No.
Ratio:
1. As a general rule, the laws of every State effect, and bind directly, all property, whether
real or personal, within its territory; and all persons who are resident within it, whether
natural-born subjects or aliens; and also all contracts made, and acts done within it.
2. Personal or movable property is governed by the law of the domicil of the owner,
wherever it may be situated, and this law of course changes with his change of domicil.
To say that the slaves were real estate here, is to import the law of Kentucky into this
State, and make it operate ex proprio vigore in opposition to the well settled rule of our
own law. The case does not come within the meaning of the terms or the principles
where the lex loci contractus governs. It is an attempt to bring property within our
jurisdiction, and hold it by virtue of a foreign law, in a manner and by a tenue different
from what is recognized by our own rules and regulations.
Thompson v. Waters
12 Am. Rep. 243
Doctrine: A railroad corporation, organized under the laws of the state of Indiana, and competent
to take the title to real estate therein in payment of or security for debts due to it, is competent to
exercise the same powers in the state of Michigan, since the legislature of Michigan has not
adopted any policy or enacted any statute which restricts the courts from applying the usual
principles of comity to such a corporation.
Where a corporation is created in one state, with power to take, hold, and convey lands in
another state, where the legislature has not expressly or by implication forbidden it, an affirmative
enabling act is not necessary to give such corporation power to take, hold, and convey lands in
the latter state, since such capacity is given under the same principles of comity as the capacity
to make or enforce contracts or acquire personal property in states other than that of its creation.
Facts:
1. Both parties claimed title through Johnson, who owned the land.
2. Plaintiff's claim of title: Johnson, by warranty deed, conveyed the land to the Fort
Wayne & Chicago Railroad Company, a company incorporated under the laws of Indiana.
By several acts passed by the legislatures of the States of Pennsylvania,Ohio, Indiana
and Illinois, authorizing the consolidation of railroad companies, and by the articles of
consolidation of the consolidating three railroad companies, under the name of The
Pittsburgh, Fort Wayne & Chicago. Which subsequently, by their several deeds,
conveyed the land in question to the plaintiff.
3. Defendant claimed that: the Fort Wayne & Chicago Railroad Company, at the
time of the execution of the conveyance from Johnson to it, had no power to purchase
and hold the lands in question in the state of Michigan.
Issue: W/N the Fort Wayne & Chicago Railroad Company, being a corporation created by, and
existing under, the laws of the State of Indiana, was competent to take the title to this land in the
State of Michigan, under the deed executed to it by Johnson
Held: Yes
Ratio:
1. This question depends, first, upon the laws of Indiana; and, second, upon the laws of this
State, and the public policy indicated by its legislation
2. First, As it was an artificial being, created only by the laws of Indiana, and by them alone
endowed with whatever powers and capacities it possesses, it could have no capacities,
nor exercise any powers anywhere, which were not, expressly or by implication, given
by those laws; or, in other words, no powers or capacities which would not be
recognized and sustained by the courts of that State, had the same question of capacity
to take these lands come before them for adjudication.
3. In this case, the laws of Indiana present no obstacle to the taking or holding of these
lands by the company; in other words, they show that, by the laws of Indiana, so far as
the question depends upon them, this company was competent to take this land in this
State.
Stack v. Cedar Co.
114 N. W. 876
Facts:
1. The mortgagor, an Illinois corporation, executed a mortgage to secure
several notes.
2. When the mortgagee brought a foreclosure action, the mortgagor
claimed the mortgage was usurious and unlawful.
3. In response, the mortgagee claimed the mortgagor was not entitled to
interpose a usury defense because Ill. Rev. Stat. ch. 74, para. 1128, ß 11 prevented all
Illinois corporations from interposing the defense of usury.
4. After the trial court rejected the usury defense, the mortgagor sought
review.
Issue: Whether the defendant, being an Illinois corporation, is precluded from interposing the
defense of usury, because the statutes of Illinois prevent all Illinois corporations from interposing
the defense of usury.
Held/Ratio:
1. Initially, the court held that usury laws were local and had no extraterritorial effect and
that matters respecting a remedy, such as the beginning of suits, admissibility of
evidence, and statutes of limitation, depended upon the law of the place where an action
was brought.
2. Thereafter, the court held that if the Illinois statute was given extraterritorial effect, it
would conflict with Michigan's local interest laws and with a corporation's statutory right to
interpose a usury defense in Michigan.
3. The court held that if a Michigan citizen could escape Michigan laws by virtue of an
Illinois statute, Michigan's laws would be ineffective and annulled by foreign statute.
Finney v. Guy
82 N. W. 595
Facts:
1. American Savings & Loan Association was a corporation
organized under the laws of the State of Minnesota, and on June 18, 1896, William D.
Hale, another plaintiff in this action, was appointed receiver thereof.
2. Farmers' & Merchants' State Bank was a banking organization
under the laws of the State of Minnesota and doing business there. It became insolvent
and the entire net proceeds of the bank's assets amounted to the sum of $12,539.95, all
of which had been paid over to the State of Minnesota on account of the indebtedness of
the bank to the State of over $28,000, which was a preferred claim under the laws of that
state. Its other debts amounted to the sum of more than $100,000, and it had no property
to satisfy the same.
3. Defendant Mary A. Guy, a resident of the State of Wisconsin,
was the owner of three shares of the capital stock of the bank in her own right, and that
she owned sixteen shares of the stock of the bank as executrix of the will of her husband
and as legatee thereunder.
4. Suit was brought Minnesota in 1894 to enforce the liability of the
stockholders of the bank under and by virtue of the laws and Constitution of the State of
Minnesota. Such suit had been commenced by the American Savings & Loan
Association, which was a creditor of the bank, in behalf of itself and all other creditors.
5. Process was, however, not served on this defendant, but only on
those residing within the state.
6. Judgment was duly rendered therein on in favor of the American
Savings & Loan Association, for the amount of the indebtedness of the bank to it, and
also in favor of the other creditors of the bank, who had duly intervened, for the various
amounts due them from the bank.
7. Finney, as receiver therein, commenced this action against Mary
A. Guy, and joined with him as plaintiffs all the creditors of the bank who had proved their
claims in the Minnesota suit, and it was also averred that Mrs. Guy was liable to the
creditors of the bank in the sum of $3,800, double the amount of the par value of the
three shares owned by her individually and of the sixteen shares formerly owned by her
husband.
8. The plaintiffs contend that their cause of action is based upon
the decisions and judgments of the courts of the State of Minnesota, and upon the
statutes of that state, and that the Wisconsin Supreme Court, in sustaining the demurrer,
has thereby failed to give that full faith and credit to the laws and judgments of the State
of Minnesota and its courts which they receive in that state and which they are entitled to
under the Constitution and laws of the United States, and that, by reason thereof, a
federal right has been denied them.
9. It is stated by the Supreme Court of Wisconsin that that state for
many years has had a statute for the enforcement of the liability of stockholders in
corporations similar to that which exists in Minnesota, and that it had been frequently
decided under such statute that an action of the nature of the one at bar could not be
maintained in her courts, and also that it was against the public policy of Wisconsin to
permit it; It held that the remedy under the Wisconsin statute was exclusive, and
consisted in a suit in equity at the home of the corporation.
Issue: Whether or not a judgment in the court of Minnesota adjudging as shareholder liable for
the creditors of the corporation can be enforced in Wisconsin.
Held: Yes
Ratio:
1. Where a case turns upon the construction by a state court of a statute of another state,
and not upon the validity of such statute, a decision on that question is not necessarily of
a federal character. It depends upon the particular facts of each case and the manner in
which they are presented, how far such questions can be regarded as coming under the
full faith and credit clause of the Constitution.
2. As decided in Hale v. Allinson, 188 U. S. 56, a receiver of an insolvent corporation
appointed by the courts of Minnesota under the statutes of that state then existing cannot
maintain an action outside of that state to enforce the statutory double liability of the
stockholders; in refusing to allow such a receiver to maintain such an action, the courts of
Wisconsin did not fail to give full faith and credit to the laws and judgments of Minnesota,
under the federal Constitution.
3. Where the law of a foreign jurisdiction has been proved as a fact, the evidence of a
witness, stating such law and decisions as to its meaning and effect, does not preclude
the court from itself consulting and construing such statute and decisions and deducing
its own opinion in regard thereto, Eastern Building & Loan Assn. v. Williamson, ante, p.
189 U. S. 122, nor is the right and duty of the courts to themselves construe statutes and
decisions of a foreign jurisdiction altered because such law and decisions are set forth in
a pleading which is demurred to instead of being proved as facts on a trial.
4. Whether, apart from federal questions, the courts of one state should permit an action of
this nature to be maintained on the principle of comity is a question exclusively for the
state court to decide.
Hunt v. Whewell
99 N.W. 599
Doctrine
1. The enforceability of other-than-statutory rights in a state foreign to that of their creation
depends upon the law of comity and in such field each state is free to establish its own
policy unhampered by any outside law, state or national.
2. A statute of Minnesota to the effect that the court of that state in which a receiver is
appointed for an insolvent bank may, in a summary proceeding to which a nonresident
stockholder is not a party, fix the amount for which he shall respond upon his statutory
liability, and the time when and the person to whom the same must be paid, and that
such determination shall be conclusive upon the stockholder as to all questions involved,
will not be given such force by the courts in this state as to deprive a stockholder,
resident here, from whom the receiver seeks to recover in our courts an amount so fixed,
of his right to litigate all questions respecting the enforceability of his said statutory
liability.
Facts
1. The Allemannia Bank is a banking corporation duly organized under the laws of the state
of Minnesota.
2. It became insolvent, and such proceedings were duly taken by action, pursuant to the
general laws of Minnesota, in the district court for Ramsay county, in such state, plaintiff
was appointed receiver of its assets, with the powers and duties belonging to the position
under said law and the practice in equity.
3. The district court entered an order in such action for creditors of the insolvent to exhibit
their claims to such court, and such proceedings were duly taken in respect thereto that
such claims were presented and duly allowed, exceeding $ 75,000.
4. The value of the assets of the insolvent coming to the hands of the receiver does not
exceed $ 20,000, and the greater part of the stockholders are insolvent.
5. The allowed claims and the costs of the receivership will exceed the resources available
to pay the same, including the liabilities of the stockholders.
6. By the Gen. Stats. Minn. (1878), it is provided that all stockholders of such a bank as the
one in question shall be individually liable in an amount equal to double the amount of
stock owned by them, for all the debts of such bank, which liability shall continue for one
year after any transfer or sale of stock by any stockholder.
7. By the Laws of Minnesota (1899), it is provided that in a receivership proceeding such as
the one herein mentioned, upon the petition of the receiver to the court appointing him, it
shall by order set a time for hearing and direct such notice of hearing to be given by
publication or otherwise as the court may deem proper.
8. At such hearing, if it shall appear that the assets of the corporation will be insufficient to
pay in full its indebtedness, and that it is necessary or proper to enforce the stockholders'
liabilities:
a. The court shall levy an assessment upon all parties liable as stockholders for such
amount on account of each share as the court in its discretion shall deem proper, and
b. Shall direct the payment of the amount so assessed to the receiver within a specified
time, and
c. Further direct the receiver to collect the amount so assessed against each share of
said stock from the parties liable, and
d. Authorize said receiver, if necessary, to prosecute actions against each and every
party failing to pay the amount for which he is liable according to such assessment,
wherever such party may be found, within or without the state.
9. Such order shall be conclusive upon all persons assessed as regards all questions
concerning the same, regardless of whether they shall have appeared upon the hearing
or were there represented or had notice thereof.
10. In case there is a surplus of money or property in the hands of the receiver, the sum
under the direction of the court shall be distributed among the stockholders who shall
have paid their assessment. Any stockholder who shall have paid the assessment shall
be entitled to enforce contribution from stockholders who have not paid such
assessment, in such manner and to such extent as may be just and equitable.
11. The supreme court of Minnesota held that the law of 1889 aforesaid was constitutional,
and that the jurisdiction of the court, having charge of the receivership proceeding, over
the insolvent corporation includes jurisdiction of all its stockholders, whether nonresident
or not, so as to conclude them respecting every question involving their liability to pay the
amount of the assessment to the receiver ordered to be paid by them respectively; that
the act is a mere practice provision not involving any impairment or change of
stockholders' rights.
12. Plaintiff as receiver aforesaid, duly filed his petition under said law of 1889, and thereafter
such proceedings were duly taken pursuant to such law that an assessment upon the
capital stock of the corporation to the par value thereof was made, and each stockholder
was directed to pay the amount assessed against him to said receiver within twenty-one
days after the date of the order, and the latter was directed to enforce collection of all
liabilities thereby created, not paid as directed.
13. The assessment was made. It provided for notice to all parties liable and a time limit for
the payment of the same, which notice was duly given. Defendant became and thereafter
continued to be a stockholder of the corporation to the amount of $ 900 par value of the
stock, and by reason of the facts alleged became liable to pay to the receiver the sum of
$ 900, which she has neglected and refused to do.
14. Upon the facts stated and others not necessary to mention judgment was asked for $900
with interest and costs.
15. The defendant demurred to the complaint, first, for want of jurisdiction of the court over
the subject matter; second, for want of legal capacity to sue; third, for defect of parties
defendant; fourth, for insufficiency; fifth, because the action was not commenced within
the time limited by law.
16. The demurrer was sustained, and plaintiff appealed.
Issue: W/N the court of Minnesota can acquire jurisdiction over a stockholder located in a foreign
state?
Held: The order is affirmed.
Ratio:
1. This appeal is ruled in favor of respondent by Finney v. Guy and Eau Claire Nat. Bank v.
Benson, particularly the former. Every vital question involved here was so thoroughly
discussed and the policy of this state in respect thereto so plainly declared in Finney v.
Guy, and that policy so unqualifiedly sustained by the federal supreme court in the same
case in 189 U.S. 335, 23 S. Ct. 558, 47 L. Ed. 839, that it seems no useful purpose would
be served by going over the matter again.
2. Our attention is called to Parker v. Stoughton M. Co. as analogous to the case before us.
To our minds the two cases are widely different. The claim in the former was upon an
assessment note belonging to the receiver as the representative of the corporation. It
was a corporate asset strictly so called.
a. The liability did not depend upon any statute, nor did the remedy to enforce it.
Here the liability is contractual, to be sure, but it is so only by force of the statute.
b. The liability is statutory, the remedy to enforce it is statutory, and appellant's title
is a creature of the statute. The former is strictly transitory; the latter, as regards
whether an absolute right or not, is confined to the state of its creation.
3. True, the Massachusetts court, in Howarth v. Lombard, held, in effect, that since both
classes of liabilities are to be worked out as parts of a common trust fund for the benefit
of creditors they should be treated alike as regards the facilities furnished by courts of a
state foreign to that of the debtor corporation for the enforcement thereof; that no
difference should be made between common-law and statutory liabilities.
a. However, it should be noted that such court plainly there recognized that there is
this important distinction between mere statutory rights and others
b. The enforceability of the latter (statutory liabilities) in a state foreign to that of
their creation depends upon the law of comity, and that in such field each state is
free to establish its own policy unhampered by any outside law, state or national,
as indicated in Finney v. Guy.
c. The Massachusetts court said, "If the statute creating the right is against the
policy of the law of the neighboring state, that is a sufficient reason for refusing to
enforce the right there. In the neighboring state, in such a case, it will not be
considered a right. If the enforcement of the statutory right in a neighboring state
in the manner proposed will work injustice to its citizens, considerations of comity
do not require the recognition of it by the courts of that state."
4. No judgment, even in form, had been rendered in the Minnesota court, binding upon
persons not parties to the litigation,--none which, in terms or by any statute, created an
obligation for its recognition in the courts of this state under the "good faith and credit"
clause of the federal constitution, as regards the force to be given to a judgment rendered
in the court of one state in the courts of another.
a. It was held here and affirmed by the federal court, that such clause cannot be
successfully invoked to bar a resident of this state, who is a stockholder of a
Minnesota corporation, the affairs of which are in process of settlement in an
administration suit for the benefit of its creditors in a Minnesota court, to which he
is not a party, from litigating in the courts of this state all questions respecting the
enforceability of his extraordinary stockholder's liability where it is sought in such
courts to recover thereon by the representative of the creditors appointed by the
home court; that such a stockholder is not a party to the original suit as to such
extraordinary liability merely because the corporation is, since such liability is in
no sense an asset of the corporation.
5. Now we face a Minnesota legislative enactment to the effect that the court in such
original suit may, in a summary proceeding to which such a stockholder is not a party, fix
the amount for which he must respond upon such extraordinary liability, and the time
when and the person to whom the same must be paid, and that the determination shall
be regarded as a bar to every defense to such liability in any court anywhere.
a. It is hard to conceive of anything more drastic than that. The literal effect thereof
is to make the Wisconsin court in this case a mere instrument to execute the
commands of a foreign court against one of its citizens in a proceeding to which
he was not a party and may not even have had notice of.
Fox v. Telegraph-Cable Co.
120 N.W. 399
Doctrine: As a general rule, lex loci governs the validity of a contract, thus it is valid everywhere.
The exception to this rule is that, the courts of one state will not enforce contracts which, though
valid in the place where made, contravene their policy
Facts:
1. On December 19, 19006, at noontime, defendant Postal Telegraph Cable Co. (a New York
Corporation at New York City) received from plaintiff, Fox a message to be transmitted by its
telegraph system to a person at a train station in Chicago, at 2 o’clock p.m. Before the letter
was delivered for transmission, the defendant was notified of the importance of the letter and
the necessity of the message reaching the person to whom it was addressed before the
leaving time of such train on such day. The letter was not delivered at the agreed time, but
was delivered the next day. For this reason, the addressee started and made the journey to
New York, to the damage of the plaintiff in the sum of $157.37.
2. The defense of the defendant are:
a. The plaintiff wrote his message on one of defendant’s ordinary blanks:
“The Postal Telegraph Company * * * transmits and delivers this message subject to the
terms and conditions printed on the back of this blank. * * * Send the following message
without repeating subject to the terms and conditions printed on the back hereof, which
are hereby agreed to.”
b. Also, the indorsement mentioned that should there be delays or mistake in the delivery of
the message, the sender should order the defendant to resend it for a fee of one-half
regular rate. Further, the indorsement states that the defendant shall not be liable for
mistakes or delays in the transmission or delivery, or for non-delivery of any unrepeated
message beyond the amount received for sending the same; nor for mistakes or delays
in the transmission or delivery, or for nondelivery of an unrepeated message beyond fifty
times the sum received for sending the same, unless specially insured. * * *”
c. Plaintiff did not request to have the message repeated nor to have it insured. The sum
paid for the service was 40 cents.
Issue: Whether a contract considered void in Wisconsin for being contrary to the public policy be
judicially enforced in the said State, even if the contract is considered valid where it was made
(New York) or breached (Illinois)?
Held: No. A contract is governed by the law of the place thereof. However, the courts of one state
will not enforce contracts which, though valid in the place where made, contravene their policy.
Ratio:
1. In this case, a provision in a contract with a telegraph company, relieving it of liability for delay
in the delivery of a message, is void as contrary to public policy, and is also in conflict with
St.1898, § 1778, providing that a telegraph company shall be liable for all damages
occasioned by the failure or negligence of its servants in receiving, copying, transmitting, or
delivering dispatches.
2. The doctrine as to recognition of foreign contracts in the courts of a state, if valid by the laws
of the home jurisdiction, rests in comity. Therefore, it must necessarily rest in sound judicial
discretion to limit it, and its general limitations exclude those agreements which are injurious
to public rights, or offend against public morals, or contravene public policy, or violate public
law as recognized in the place of the forum.
Siegel v. Robinson
93 Am. Dec. 775
Doctrine: Contracts relating to the sale of realty, including executory contracts, are generally
governed by the law of the jurisdiction in which the property is located. However, in some
jurisdictions, the validity and the effect of an executory contract for the sale of land are governed
by the law of the place where the contract is made and is to be performed, and not by the law of
the place where the land is situated.
Facts
1. Siegel claims that the defendants owed him $380 with interest as purchase money for a
parcel of land in Mecca, Ohio. Allegedly, there was a parol contract between the parties
in Pennsylvania pertaining to the sale of the property in issue. Part of the land was to be
used for a well. The evidence was stated in the appendix to the paper-book, but was not
certified by the judge.
2. The defendants' counsel argues that the statutes of Ohio, where the land in question lies,
prohibit the enforcement of parol contracts for the sale and purchase of real estate.
Subsequently, the plaintiff cannot recover, although the contract was made in
Pennsylvania.
3. The court ruled in favor of the plaintiff awarding him $384. The defendants appealed to
the Supreme Court which affirmed the judgment of the lower court.
Issue: W/N the parol contract executed in Pennsylvania for the sale of land located in Ohio is
considered void in Pennsylvania under the statute of frauds.
Held:
1. The contract cannot be voided under the law of Pennsylvania. This is for the reason that
the law on the statute of frauds does not apply to lands outside of the state.
2. The defendants further submitted the proposition that the statutes of Ohio, where the land
they had contracted to buy is situated, forbid the enforcement of parol contracts for the
purchase and sale of real estate, and that consequently the plaintiff could not recover,
though the contract was made in the said state.
3. No pamphlet or other evidence, showing the existence of such a statute, has been shown
or furnished the court, and without questioning the correctness of the counsel's
assertions, it is not sufficient to control the court in its instructions on the point in
question; courts do not recognize the existence of foreign laws unless duly proven, and
the court, therefore, charged against the defendants. But the contract was not void under
Pennsylvania law. Since statute of frauds does not apply to parol sales of lands outside
of the state, it certainly does not avoid such contracts.
Huntington v. Attrill
36 L. Ed. 1123
Doctrines: The courts cannot execute penal laws of another country. The question whether a
statute of one state, which in some aspects may be called penal, is a penal law, in the
international sense, so that it cannot be enforced in the courts of another state, depends upon the
question whether its purpose is to punish an offense against the public justice of the state, or to
afford a private remedy to a person injured by the wrongful act.
Facts:
1. Huntington filed a bill of complaint in Court of Baltimore alleging the following:
a. Huntington lent Rockaway Beach Improvement Company, Limited a certain
amount of money, which should be payable upon demand.
b. Attril was an incorporator and director of the said company
c. Attrill, as a director of the company, signed and made oath to, and caused to be
recorded, as required by the law of New York, a certificate, which he knew to be
false, stating that the whole of the capital stock of the corporation had been paid
in, whereas in truth no part had been paid in, and by making such false certificate
became liable, by the law of New York, for all the debts of the company
contracted before January 29, 1881, including its debt to Huntington.
d. Huntington alleged that according to the law of New York, stockholders are liable
to pay the company’s debts, each to the amount of the stock held by him.
e. Huntington was able to obtain a judgment in the courts of New York in his favor
f. One of the daughters of Attril demurred to the bill because according to her, the
plaintiff's claim was for the recovery of a penalty against Attrill arising under a
statute of the state of New York, and because it did not state a case which
entitled the plaintiff to any relief in a court of equity in the state of Maryland.
2. The circuit court of Baltimore denied the demurrer but the decision was reversed on
appeal.
3. The Court of Appeals dismissed the complaint.
 Having thus decided against the plaintiff's claim under his judgment,
upon the single ground that it was for a penalty under the statute of New
York, and therefore could not be enforced in Maryland, and against any
original liability under the statute, for various reasons, the opinion
concluded: ‘Upon the whole, it appears to us that the complainant has no
cause of action which he can maintain in this state’.
Issue: W/N a judgment in an action for penalty obtained in one state may be enforced in
another state
Held: No. But in this case, the Court held that this case is not penal in character
Ratio:
1. In order to determine this question, it will be necessary, in the first place, to consider the
true scope and meaning of the fundamental maxim of international law stated by Chief
Justice Marshall in the fewest possible words: ‘The courts of no country execute the
penal laws of another.’
2. Strictly and primarily, they denote punishment, whether corporal or pecuniary, imposed
and enforced by the state for a crime or offense against its laws. But they are also
commonly used as including any extraordinary liability to which the law subjects a
wrongdoer in favor of the person wronged, not limited to the damages suffered. They are
so elastic in meaning as even to be familiarly applied to cases of private contracts, wholly
independent of statutes, as when we speak of the ‘penal sum’ or ‘penalty’ of a bond.
3. Penal laws, strictly and properly, are those imposing punishment for an offense
committed against the state, and which, by the English and American constitutions, the
executive of the state has the power to pardon. Statutes giving a private action against
the wrongdoer are sometimes spoken of as penal in their nature, but in such cases it has
been pointed out that neither the liability imposed nor the remedy given is strictly penal.
4. The test whether a law is penal, in the strict and primary sense, is whether the wrong
sought to be redressed is a wrong to the public or a wrong to the individual, according to
the familiar classification of Blackstone: ‘Wrongs are divisible into two sorts or species:
private wrongs and public wrongs. The former are an infringement or privation of the
private or civil rights belonging to individuals, considered as individuals, and are
thereupon frequently termed ‘civil injuries;’ the latter are a breach and violation of public
rights and duties, which affect the whole community, considered as a community, and are
distinguished by the harsher appellation of ‘crimes and misdemeanors.”
5. Laws have no force of themselves beyond the jurisdiction of the state which enacts them,
and can have extraterritorial effect only by the comity of other states.
6. Beyond doubt (except in cases removed from a state court in obedience to an express
act of congress, in order to protect rights under the constitution and laws of the United
states) a circuit court of the United States cannot entertain jurisdiction of a suit in behalf
of the state, or of the people thereof, to recover a penalty imposed by way of punishment
for a violation of a statute of the state; ‘the courts of the United States,’ as observed by
Mr. Justice Catron, delivering a judgment of this court, ‘having no power to execute the
penal laws of the individual states.’
7. The question whether a statute of one state, which in some aspects may be called penal,
is a penal law, in the international sense, so that it cannot be enforced in the courts of
another state, depends upon the question whether its purpose is to punish an offense
against the public justice of the state, or to afford a private remedy to a person injured by
the wrongful act.
8. The provision of the statute of New York now in question, making the officers of a
corporation, who sign and record a false certificate of the amount of its capital stock,
liable for all its debts, is in no sense a criminal or quasi criminal law.
o The statute, while it enables persons complying with its provisions to do business as
a corporation, without being subject to the liability of general partners, takes pains to
secure and maintain a proper corporate fund for the payment of the corporate debts.
9. As the statute imposes a burdensome liability on the officers for their wrongful act, it may
well be considered penal, in the sense that it should be strictly construed. But as it gives
a civil remedy, at the private suit of the creditor only, and measured by the amount of his
debt, it is as to him clearly remedial. To maintain such a suit is not to administer a
punishment imposed upon an offender against the state, but simply to enforce a private
right secured under its laws to an individual. We can see no just ground, on principle, for
holding such a statute to be a penal law, in the sense that it cannot be enforced in a
foreign state or country.
Russell v. R. Co
45 Pac. 323
Doctrine: A special statutory remedy given by the laws of another state, for enforcing the
statutory liability of the stockholders of a corporation organized under its laws, limits the liability,
and where such remedy is not afforded by the laws of this state, the liability of the stockholders of
such corporation cannot be enforced in this state against resident stockholders thereof.
Facts:
1. Russell, a judgment creditor in California, files a case against Pacific Railway Company
and Los Angeles Cable Railway Company for the appointment of a receiver for the sale
of its property and the sum due to its stockholders.
2. Complaint in intervention was filed in behalf of other creditors, they have no joint or
common interests. They claim the right to join under the Statute of Illinois.
3. The Superior Court of Cook County, Illinois, recovered a judgment against Pacific
Railway Company for a sum of money and caused its execution which was returned nulla
bona. Upon the averment of insolvency, a receiver was appointed.
4. Russell recovered judgment in the superior court of Los Angeles county against Pacific
for S1,048.48 and procured a receiver to impound Pacific’s assets.
5. Pacific was found to be insolvent.
6. Under the law of Illinois:
Sec. 8: "each stockholder shall be liable for the debts of the corporation to the extent of
the amount that may be unpaid upon the stock held by him, to be collected in the manner
herein provided. No assignor of stocks shall be released from any such indebtedness by
reason of any assignment [***5] of his stock, but shall remain liable therefor jointly with
the assignee until the said stock be fully paid. Whenever any action is brought to recover
against the corporation, it shall be competent to proceed against any one or more
stockholders at the same time, to the extent of the balance [*261] unpaid by such
stockholders upon the stock owned by them respectively, whether called in or not, as in
cases of garnishment. Every assignee or transferee of stock shall be liable to the
company for the amount unpaid thereon to the extent and in the same manner as if he
had been the original subscriber."
-Sec. 25 of the same statute it is further provided that, under certain circumstances, a
creditor who has obtained a judgment against the corporation, and whose execution has
been returned nulla bona, may bring suits, by joining the corporation, against the persons
who were stockholders at the time, or in any way liable for the debts of the corporation, to
compel each stockholder to pay his pro rata share of such debts or liabilities to the extent
of the unpaid portion of the stock after exhausting the assets of the corporation. Further,
it authorized courts of equity, [***6] on good cause shown, to dissolve the corporation,
and close up the corporate business, and to appoint a receiver who shall in all cases be a
resident of the state of Illinois.
7. Trial Court found in favor of corporation and shareholders.
8. On appeal, the court affirmed saying that the Act did not create a liability which is
enforceable in California.
Issue: W/N Statute of Illinois is enforceable in California Courts?
Held: No
Ratio:
1. General rule: Where a statute creates a right and prescribes a remedy for its
enforcement, that remedy is exclusive. When a liability is created, which is not penal and
no remedy is prescribed, the liability may be enforced wherever the person may be
found.
a. The procedure is governed by the law of the forum
b. The mode provided by law limits the liability.
c. Under a contract, it is understood that parties cannot be liable in no other way
and such liability cannot be enforced in another state.
2. Sec. 8 of the Illinois Statute is a special remedy. The language is unambiguous, and
shows the construction given to the statute by the courts of Illinois. Independently of this
ruling, we should have no difficulty in reaching the conclusion that the Illinois statute does
not create a liability which can be enforced here. The intervenors, therefore, have no
standing as litigants in the case
Com. Nat. Bank v. Kirk
71 Atl. 1085
Facts:
1. Appellees were stockholders and directors of a mining corporation of Montana.
2. Under a statute of Montana, it is the duty of the corporation to make an annual report
showing the amount of capital stock authorized, the proportion of the capitalization paid
in, and the existing indebtedness, which report is required to be filed in the office of the
clerk of the county where the principal place of business is located.
3. Failure to make and file the report imposes upon the directors a statutory liability to jointly
or severally pay the indebtedness of the corporation then existing, or any that shall
thereafter be contracted, until such report shall be made and filed.
4. The mining corporation failed to make a report.
5. Commercial National Bank of Bozeman instituted in Pennsylvania an action to enforce
against certain directors of the corporation the collection of an indebtedness of the
corporation due to the bank.
6. Court of Common Pleas, Lawrence County ruled that the Supreme Court of Montana
has consistently held in several cases that the statute, under which the alleged liability in
this case arises, to be penal, and that its provisions must be strictly construed. The courts
in Pennsylvania will not enforce penal laws of another state.
Issue: W/N the liability under the Montana Statute is penal or contractual in nature, and if penal, it
must be enforced only in Montana.
Held: Yes, it is penal. The non-application of penal law in a foreign jurisdiction is one of the
exceptions in the general rule of application with regards to foreign law.
Ratio:
1. An act of sovereignty must have no effect in the territory of another state.
2. The exception does not only mean that forum courts cannot base a conviction for criminal
offense on the breach of a foreign penal law, but it also implies that they will refuse to
enforce foreign judgments in a penal proceeding. (Huntington v. Attrill)
Warner v. Jaffray
48 Am. Rep. 616
Warner v Jaffray
Facts :
1. Weld was a resident of Jamestown, New York.
2. Weld made an assignment to Warner for the benefit of his creditors.
3. The assignment was acknowledged, and delivered to and accepted by the assignee at two
o'clock in the afternoon of that day.
4. However. it was not recorded in the clerk's office of Chautauqua county until 8 A.M., of the
next day.
5. At the time of the execution of the assignment, the assignor Weld owned a large amount of
personal property, situated at the place of his residence, and also in Crawford and Warren
counties in the State of Pennsylvania.
6. The assignment was recorded in Crawford county on March 18, and in Warren county on
March 19, 1881.
7. Jaffray et al were residents of the city of New York, and creditors to a large amount of the
assignor.
8. On March 1, after the execution and delivery of the assignment, they commenced actions
against the assignor in Crawford and Warren counties, and, in each of those counties,
process of foreign attachment was issued, and by virtue thereof in the afternoon of March 1,
the property of the assignor in each of those two counties was attached.
9. Jaffray et al, at the time of the service of the attachments, had no actual notice of the
assignment made by Weld.
10.Warner having first demanded possession of the property attached from the sheriffs who
served the attachments, commenced this action against these defendants to restrain them
from further proceeding under the attachments, and thus far he has been unsuccessful.
Issue: W/N the assignment made in the State of New York was effectual to transfer the
assignor's property situated in Pennsylvania so that it could not afterward be attached there as
his property by creditors going there from New York.
Held: No, the assignment was a mere voluntary conveyance, and can have no greater effect, so
far as passing title to the property assigned, than any other conveyance.
The Court concluded, therefore, that the property of the assignor, situated in the State of
Pennsylvania, was liable to attachment there at the suit of these defendants, notwithstanding the
previous assignment in New York, and that the courts of New York under the Federal Constitution
are bound to respect the liens of the attachments and to give "full faith and credit" to the judicial
proceedings in the action instituted there.
Ratio:
1. The assignment did not operate upon the creditors of the assignor, nor place them under any
obligations. It left them entirely free to act, whether it be an utter refusal of the assignment
and retention of their claims, which could be enforced whenever it is convenient for them
against the debtor.
2. The assignee acts a trustee for such creditors of the assignor but only only as to those who
chose to accept him as such.
3. Because technically, without their assent, the assignment did not bring the creditors into any
relation with the assignee, or with each other. The law did not take this insolvent's property
for distribution among his creditors, but its distribution was his own act.
4. Any one of his creditors could, notwithstanding the assignment, enforce his claim against any
property of the assignor not conveyed by the assignment, without violating any rights or
equities of the other creditors.
5. Equity does not condemn the efforts of one creditor to secure the payment of his claim, even
if, in consequence of such efforts, nothing should be left for the other creditors.
6. On the contrary, the vigilant creditor has always been rewarded for his vigilance. Therefore,
the sole right of this plaintiff to maintain this action must rest upon the fact that the title to the
property situated in Pennsylvania passed to him by the assignment before it was attached by
the defendants.
7. It is clear, upon authority, that the title did not pass.
8. The general rule is that the voluntary transfer of personal property is to be governed,
everywhere, by the law of the owner's domicile, and this rule proceeds on the fiction of law
that “the domicile draws to it the personal estate of the owner, wherever it may happen to be.”
9. That fiction of law, howeer, is not applicable everywhere. It is not applied whenever it is
necessary for the purposes of justice that the actual situs of the thing should be examined,
and always gives way when the law and policy of the State where the property is located
have prescribed a different rule of transfer from that of the State where the owner lives; and
to this effect are all the authorities.
10. At the time this assignment was made, there was a statute in Pennsylvania which regulated
how assignments should be made, executed and recorded; and one of the sections is as
follows:
“Whenever any person, making an assignment of his or her estate, situated in this
Commonwealth, for the benefit of creditors, shall be resident out of this State, such
assignment may be recorded in any county where such estate, real and personal, may
be, and take effect from its date, provided that no bona fide purchaser, mortgagee or
creditor, having a lien thereon before the recording in the same county, and not having
previous actual notice thereof, shall be affected or prejudiced.”
11. This section plainly applies to this case. The assignor was a non-resident, and the defendants
obtained their liens by their attachments before the assignment was recorded in the counties
where the property was situated, and before they had any notice thereof, and hence those
liens were saved from the operation of the assignment.
12. The assignment, although operative here, could not operate in Pennsylvania in contravention
of the laws of that State.
13. There was no law which forbids these defendants going into the State of Pennsylvania to
collect their claim there of their debtor.
14. In going there they did no wrong to any one, and did not violate the legal or equitable rights of
any one.
15. The laws of New York did not follow them into that State, and they had the same right to
enforce payment of their claims out of the property of the assignor found there, and as to
them belonging to him, as any resident creditor had.
16. A foreign creditor has the same rights in New York against the property of his non-resident
debtor as a resident creditor has.
17. The defendants cannot be treated as tortfeasors in New York for acts perfectly lawful where
they were committed.
18. If a judgment in Pennsylvania would have protected them, then the attachments will protect
them, and there are no principles of law or equity, which authorize any court in New York to
restrain them from proceeding in an orderly and lawful way to reap the fruits of their vigilance.
In re Waite
2 N.E. 440
Doctrine: The discharge of a debtor in a previous proceeding can be nullified by the Court if it is
proven that there was intent to hinder, delay and defraud creditors.
Facts:
1. C. Channing Redfield objects to the discharge of Debtor Jennifer M. Waite. He asks that
Debtor’s underlying bankruptcy case be dismissed for cause as a bad faith filing.
2. Debtor answered in general denial.
3. C. Channing Redfield is a secured creditor of Jennifer because of a court judgment in
New York State Supreme Court.
4. Jennifer M. Waite did not disclose her use of a different name (Jennifer Fuller) and
interest in a property in N.Y, nor did she disclose income attributable to her husband in a
previous bankruptcy case. She filed said case to unfreeze her accounts.
5. In the present case, Debtor disclosed her interest in the N.Y. property, but claimed that C.
Channing Redfield is merely an unsecured creditor.
6. C. Channing Redfield contends that Debtor’s pattern of behavior demonstrates that she
concealed the assets to hinder, delay or defraud her creditors.
Issue: W/N Debtor should be discharged.
Held: No
Ratio:
1. The privilege of a discharge and the promise of a fresh start for the honest but
unfortunate debtor is one of the central tenets underlying bankruptcy.
2. A debtor may be denied a discharge if she concealed, transferred or destroyed property
with intent to hinder, delay or defraud creditors.
3. Here, the concealment was present, and such was intended to hinder, delay or defraud
creditors. In fact, debtor made admissions to such effect.
Barth v. Backus
35 N.E. 425
Doctrine:
1. Title to personal property acquired in invitum (against an unwilling party) under foreign
insolvent or bankrupt laws, good according to the law of the jurisdiction where the
proceedings were taken, will not be recognized in another jurisdiction where it comes in
conflict with the rights of creditors pursuing their remedy there against the property of the
debtor.
Facts:
1. This action was brought originally by plaintiff as general assignee for the benefit of
creditors of the Wilkin Manufacturing Company, a corporation of Wisconsin, against the
Canton Lumber Company, a corporation in New York, to recover an amount remaining
unpaid on a bill for machinery furnished by said Wisconsin company to said lumber
company. It appeared that after the execution of the assignment and before the bringing
of this action, the sheriff of St. Lawrence county (New York) attached said debt under
warrants of attachment in four actions. Afterwards, this action having been brought, the
amount of the debt was paid into court by said lumber company, and said sheriff and the
attaching creditors of the Canton Lumber Company, who were New York corporations,
were substituted as defendants.
2. The lower courts in New York rendered judgment for the general assignee. The
defendant- creditors of Canton Lumber Company appealed.
3. The assignee argues that a voluntary general assignment for the benefit of creditors, if
valid by the laws of the state where made, will transfer the title to personal property in this
state, including a debt due from a resident.
Issue: W/N the assignee-creditor may enforce the assignment made in his favor pursuant to the
State of Wisconsin in the state of New York.
Held: No
Ratio:
1. The assignment made in Wisconsin by the Wilkin Manufacturing Company was

repugnant to the laws and policy of the state of New York. Therefore, the assignee
obtained no right as against the attaching creditors of Canton Lumber Company to
property situated in New York and cannot contest in New York courts claims lawfully
levied here, upon the property of his assignor by citizens of this state, or by any other
persons lawfully suing in its courts.
2. The general rule that the validity of a transfer of personal property is governed by the law
of the domicile of the owner, is in most jurisdictions held to apply to a transfer by
voluntary assignment by a debtor of all his property for the benefit of creditors, as well as
to a specific transfer by way of ordinary sale or contract; and the title of such assignee,
valid by the law of the domicile, will prevail against the lien of an attachment issued and
levied in another state or country subsequent to the assignment, in favor of a creditor
there, whether a citizen or non-resident, upon a debt or chattel belonging to the assignor,
embraced in the assignment, provided the recognition of the title under the assignment
would not contravene the statutory law of the state, or be repugnant to its public policy.
3. But this general rule is subject to a qualification established in the jurisprudence of the
American states, that a title to personal property acquired in invitum (against an unwilling
party) under foreign insolvent or bankrupt laws, good according to the law of the
jurisdiction where the proceedings were taken, will not be recognized in another
jurisdiction where it comes in conflict with the rights of creditors pursuing their remedy
there against the property of the debtor, although the proceedings were instituted
subsequent to and with notice of the transfer in insolvency or bankruptcy. This exception
proceeds upon the view that to give effect to such a transfer arising by operation of law,
and not based upon the voluntary exercise by the owner of the jus disponendi, would be
to give the foreign law an extra-territorial operation, which the rule of comity ought not to
permit to the prejudice of suitors in another jurisdiction.
4. The general question in this case involves the point whether the assignment made by the
Wilkin Manufacturing Company, under the statute of Wisconsin, is to be treated as a
voluntary assignment, not in conflict with our laws or policy, or whether, in view of the
compulsory clauses of that statute, it is to be regarded as in the nature of a bankrupt law,
and ineffectual to transfer title to the property of the insolvent in our jurisdiction as against
attaching creditors. The Court ruled that the assignment was actually based on an
insolvent law, and thus ineffectual in New York.
5. The principle of comity in these states is held to apply so as to subject non-residents to
the operation of the foreign law, but not so as to prevent domestic creditors from pursuing
their remedy in defiance of the foreign assignment.
Giman v. Lockwood
18 L. Ed. 432
Doctrine: Certificates of discharge granted under insolvent laws passed by a state cannot be
pleaded in bar of an action brought by a citizen of another state in the courts of the United States
or of any other state than that where the discharge was obtained unless it appear that the plaintiff
proved his debt against the defendant's estate in insolvency or in some manner became a party
to the proceedings.
Facts
1. Plaintiff, a citizen of the State of New York, loaned money to defendant, a citizen of the
State of Wisconsin. The debt was evidenced by a promissory note which was executed
by defendant in his home state of Wisconsin.
2. When defendant failed to pay upon due date, plaintiff brought an action to recover the
amount under the promissory note. The case did not specify in what state the action was
brought, but by implication it was brought in a state other than Wisconsin.
3. Defendant raised as a defense his discharge in insolvency under the laws of the State of
Wisconsin, the state where he resides and where the contract was executed between the
parties.
4. Plaintiff, on the other hand, states that the insolvency court of Wisconsin exceeded its
jurisdiction in attempting to determine his rights under the contract, as he was a citizen of
another state and never became a party to the proceedings in insolvency
Issue: W/N certificates of discharge granted to the defendant under the insolvency laws of the
State of Wisconsin can bar an action brought in any other state than that where the discharge is
obtained.
Held: No
Ratio:
1. The fact that defendant had been granted certificates of discharge in his home state of
Wisconsin does not bar the plaintiff from bringing suit in any other state.
2. Insolvency laws of one state cannot discharge the contracts of citizens of other states,
because such laws have no extraterritorial operation, and consequently the tribunal
sitting under them, unless in cases where a citizen of such other state voluntarily
becomes a party to the proceedings has no jurisdiction of the case.
3. Certificates of discharge granted under insolvent laws passed by a state cannot be
pleaded in bar of an action brought by a citizen of another state in the courts of the
United States or of any other state than that where the discharge was obtained unless it
appear that the plaintiff proved his debt against the defendant's estate in insolvency or in
some manner became a party to the proceedings.
Fowler v. Lamson
34 N.E. 932
Doctrine: When a special remedy is given to creditors of a corporation against its stockholders in
one state, the liability cannot be enforced in another state.
Facts:
1. This is an appeal from the appellate court of the first district, reversing a decree of the
superior court of Cook county in favor of appellants against appellees.
2. The bill upon which the decree was rendered was filed by said George W. Fowler.
3. The bill alleged that at the October term, 1890, of said superior court he recovered a
judgment against the Cherokee Brilliant Coal & Mining Company for $3,321.40 and costs
of suit;
4. A writ of fieri facias (a writ of execution after judgment obtained in a legal action for debt
or damages for the sheriff to levy on goods of the judgment debtor) issued thereon,
directed to the sheriff of Cook county, who demanded payment thereof, or property upon
which to levy the same, from S. Warren Lamson, president of said corporation, which
being refused, said writ was returned unsatisfied, and said judgment remains wholly
unpaid.’
5. the Cherokee Brilliant Coal & Mining Company was incorporated in September, 1882,
under the laws of the state of Kansas, and for a number of years thereafter carried on
business.
6. Since the date of its incorporation it has been a part of the constitution of Kansas that:
o ‘dues from corporations shall be secured by individual liability of the stockholders
to an additional amount equal to the stock owned by each stockholder and such
other means as shall be provided by law,’
7. Moreover, Kansas’ laws state that:
o ‘if any execution shall have been issued against the property or effects of the
corporation except a railway or a religious or charitable corporation, and
there cannot not be found any property whereon to levy such execution then
execution may be issued against any of the stockholders to an extent equal
in amount to the amount of the stock by him or her owned, together with
any amount unpaid thereon, but no execution shall issue against stockholders
except upon an order of the court in which the action, suit, or other proceeding
shall have been brought or instituted made upon motion of the court, after
reasonable notice in writing to the person or persons sought to be charged. And
upon such motion such court may order execution to issue accordingly; or the
plaintiff in the execution may proceed by action to charge the stockholders with
the amount of his judgment.’ (Comp. Laws Kan. c. 23, § 32).
8. Cherokee Brilliant Coal & Mining Company was not a ‘railway, religious, or charitable
corporation,’ and it became insolvent, and made an assignment of all of its property, on
or about June 17, 1886.
9. The laws of the state of Kansas further provide that:
o ‘if any corporation, created under this or any general statute of this state, except
railway or charitable or religious corporations, be dissolved, leaving debts
unpaid, suits may be brought against any person or persons who were
stockholders at the time of such dissolution without joining the corporation in
such suit, and if judgment be rendered and execution satisfied, the defendant or
defendants may sue all who were stockholders at the time of dissolution for the
recovery of the portion of such debt for which they were liable, and the execution
upon the judgment shall direct the collection to be made from the property of
each stockholder, respectively, and if any number of stockholders (defendants in
the case) shall not have property enough to satisfy his or their portion of the
execution, then the amount of deficiency shall be divided equally among all the
remaining stockholders and collection made accordingly, deducting from the
amount a sum in proportion to the amount of stock owned by the plaintiff at the
time the company dissolved.’ Id. § 44.
10. At the time of issuing said fieri facias, said corporation had for more than a year
suspended business, and was thereby dissolved. It was stipulated between the parties
that the defendants were the owners of the shares of stock alleged in the bill, but the
same had been fully paid for.
11. The prayer of the bill is that the defendants be decreed to pay said judgments.
12. For the purposes of this opinion, the answer of defendants, except the stipulation above
mentioned, may be treated as a general denial of the allegations of the bill, and expressly
denying the jurisdiction of the court.
13. The cause having been referred to a master, he reported that all the material allegations
of the bill were sustained by the proofs, and that the prayer thereof should be granted.
14. Exceptions to this report were overruled, and a decree entered accordingly. That decree
having been reversed by the appellate court, this appeal is prosecuted
Issues:
1. W/N the constitutional provision of that state, above quoted, is to be treated as self-
executing; it being admitted that no direct legislation has been had, carrying it into effect.
2. W/N, under the laws of the state of Kansas where said corporation was organized and is
domiciled, appellees are individually liable to its creditors to an amount equal to the stock
thereof owned by them.
Held: The judgment of the appellate court will be affirmed.
Ratio
1. First Issue:
a. Whether or not such constitutional provisions can be availed of by creditors to
charge stockholders, individually, with the debts of a corporation, in the absence
of legislative action in aid thereof, depends, generally, upon the language of the
provision, and hence cases are to found holding both ways on the question.
b. In this case, however, the question being as to the effect of a provision of the
constitution of a sister state, the decisions of the supreme court of that state must
be first looked to; and, if it is found that it has ruled upon such provision, we will
adopt that ruling.
c. While it is perhaps true that the supreme court of Kansas has not decided, in
terms, that said constitutional provision is self-executing, it has fully recognized,
and, in effect, held, that stockholders of corporations organized under the
constitution and foregoing statute of that state are individually liable to creditors
of such corporation to an additional amount equal to the stock owned by each of
them.
2. Second Issue:
a. It will be seen, however, by reference to the foregoing allegations of the bill, that
two special modes are provided by the laws of Kansas by which creditors of
corporations like the one in question may enforce the liability of stockholders:
b. By having judgment against the corporation, and execution issued against its
property or effects returned nulla bona, he may have execution against the
stockholders.
c. ‘If the corporation be dissolved leaving debts unpaid, suit may be brought
against any person or persons who were stockholders at the time of such
dissolution without joining the corporation in such suit,’-in which case the statute
gives the stockholder sued a special remedy against other stockholders by
judgment and execution.
d. He ‘may sue all who were stockholders at the time of dissolution for the recovery
of the portion of such debt for which they were liable, and the execution upon the
judgment shall direct the collection to be made from the property of each
stockholder, respectively, and if any number of stockholders (defendants in the
case) shall not have property enough to satisfy his or their portion of the
execution, then the amount of deficiency shall be divided equally among all the
remaining stockholders and collection made accordingly, deducting from the
amount a sum in proportion to the amount of stock owned by the plaintiff at the
time the company dissolved.’
e. It is well settled that, these special remedies having been provided for the
enforcement of the individual liability of stockholders created by the laws of
Kansas, they alone can be pursued to enforce that liability.
f. The reason of this rule is manifest. The liability only exists by force of some
constitutional or statutory provision, and the person incurring that liability is
presumed to do so subject to its enforcement by the special provision made for
that purpose, and no other.
g. The amended bill in this case proceeds upon the allegation that the corporation
has been dissolved, but attempts to enforce the individual liability of the
defendants by a proceeding entirely different from that prescribed by the statute
of Kansas, and thus deprive the defendants of the speedy and adequate remedy
given them by that statute against other stockholders, if they should be held
liable.
h. There is also the further insuperable objection to this proceeding that it is an
attempt to enforce the individual liability of the defendants in a jurisdiction other
than that in which the corporation exists; the rule being that, when a special
remedy is given to creditors of a corporation against its stockholders in one state,
the liability cannot be enforced in another state.
i. Special remedies for enforcement of individual liability of corporation
stockholders are exclusive.
Young v. Farwell
28 N.E. 845
Doctrines:
1. Res Ad judicata. Where a court has jurisdiction of the parties and of the subject-matter
of the controversy, a prior judgment, whether rendered in an action at law or in equity,
concludes them upon the material issues and is conclusive as to all facts comprehended
within the issues submitted which were relevant and material and which were so related
to the issues that their determination was necessarily involved.
2. Former Judgment in Action for Accounting, when Conclusive against Subsequent Action
upon a Quantum Meruit. A judgment against the plaintiff in an action for an accounting,
in which the complaint alleged an agreement by the defendants to give him, “in addition
to the same salary that he had theretofore been paid, a certain interest in the profits,” to
the extent of an equal division thereof, which judgment determined that there was an
express contract between the parties that he was to receive a stipulated salary, but that
there was no contract to pay compensation beyond that, is conclusive against his right
to recover the value of his services in a subsequent action on a quantum meruit.
3. Ron-applicability of Theory of “Unjust Enrichment.” The theory of “ unjust enrichment”
does not apply to such a case, inasmuch as that depends for its application upon the
failure of the plaintiff to prove any contract, or to hold the defendants to a liability for the
benefits which they have received under a contract which is invalid at law.
Facts:
1. This action was brought to recover the reasonable value of services rendered by the plaintiff
to the defendants, a firm engaged in the dry goods business in the city of Chicago, state of
Illinois, between June 30, 1880, and January 1,1890. The respondent, who alone was served,
answered that the plaintiff's services were performed under an express contract with
defendants and for an agreed compensation, and that full payment in accordance with the
contract had been made.
2. It was, further, alleged that, in an action brought by the plaintiff against these defendants in
the Circuit Court of Cook county, in the state of Illinois, in chancery, for the same cause of
action, a final decree, or judgment, had been duly rendered between the parties in favor of
the defendants and against the plaintiff; which judgment had been affirmed, upon appeal, by
the Supreme Court of that state, and that the same was a final and conclusive adjudication
upon the merits as to the cause of action alleged in this complaint and was a bar to this
action.
3. Upon the trial, the evidence showed that, prior to July, 1889, the plaintiff had been for a
number of years employed by the defendants, in their silk department, at a fixed annual
salary; which, in 1888, was at the rate of $2,250. For the first six months of the year 1889, his
salary had been reduced to the rate of $2,000 a year ; but on June 21, 1889, certain changes
occurred in the department and a conversation was had between the plaintiff and this
respondent, J. Y. Farwell, Jr., with respect to an increase which the plaintiff requested in his
salary, under a threat of resignation by him if not conceded.
4. The plaintiff testified that the respondent then agreed to “reinstate the plaintiff’s old salary for -
the balance of the year” and to divide with him “all the profits that his department made over
his past average percentage of profits; ” which he said was satisfactory. At the end of the
year, the plaintiff left the defendants, because of their refusal to grant him “an increase in his
present salary.”
5. Subsequently, he brought the equity action in the Illinois court against the defendants;
the judgment roll in which the plaintiff introduced in evidence.
a. The bill of complaint in that action alleged the agreement by the defendants to give
complainant “in addition to the same salary that he had heretofore been paid a
certain interest'in the profits,” to the extent of an equal division thereof, and that that
agreement was made in order to recompense him for his extra services in lieu of an
addi tional salary which he had demanded. The bill alleged the refusal of the
defendants to recognize the plaintiff’s claim for one-half of the profits, at the
expiration of the period to which the alleged agreement related, and prayed that-the
defendants be decreed to pay to him what might appear, upon an accounting, to be
due, etc.
b. The answer to the bill of complaint denied having promised to give the plaintiff an
interest in the profits of the business in his department, in addition to the salary to be
paid him, and, specifically, denied “ that it was agreed between the said complainant
and said J. Y. Farwell & Company, at said time, or at any time, that the said
complainant should have an interest in the said profits, over and above the past
average-of the profits therein, which should be an equal division between said
complainant and these defendants.”
c. The trial of the issues was had before a master in chancery, who reported against the
plaintiff’s prayer for relief. The master found that the defendant, John Y. Farwell, Jr.,
agreed to give complainant for the last half of the year 1889 a salary at the rate of
$2,250 per annum and to divide profits over and above the regular percentage of that
department, but he stated, as his conclusion from the evidence, “that said agreement
is too indefinite as to the salary for the last half of the year 1889, over and above the
specified amount, at the rate of $2,250 per annum, to constitute anything more than a
promise of a bonus; and also too indefinite to constitnte such an agreement as would
constitute a partnership as to profits, and entitle the complainant to an account.”
Objections were made to the master’s report; but, after a hearing before the court,
the report was confirmed and the complainant’s bill of complaint was dismissed, with
costs.
d. Upon appeal to the Supreme Court of Illinois,- the judgment in favor of the
defendants was affirmed.
6. At the conclusion of the plaintiff’s case below, the complaint was dismissed, upon the ground
that the plaintiff had failed to establish a cause of action against the defendants; as, also,
upon the ground that the questions had been adjudicated in the other action between the
parties. Upon appeal to the Appellate Division, in the first department, the judgment entered
in favor of the defendants was affirmed and the plaintiff has further appealed to this court.
Issue: Does the plaintiff have a right to recover upon a quantum meruit, when his proof discloses
an express contract between himself and the defendants, which provided for a definite salary to
be paid?
Held: No
Ratio:
1. It becomes unnecessary to discuss that question for the reason that it is our opinion that
the judgment of the Illinois court was a conclusive adjudication against the plaintiff’s
present claim. It adjudged that there was no contract made for a compensation over and
above the fixed salary. As the issue was framed in the Illinois suit, the precise question
was presented for determination, and was determined, as was presented in this suit. That
question was whether a contract had been made, as alleged in the complaint. The
decision was, in substance, that there was a contract, by which the defendants agreed to
pay for services, which the plaintiff agreed to render, a salary at a fixed annual rate and
that there was no contract to pay compensation heyond that.
2. The effect, or the force, of the adjudication, in its bearing upon this litigation, was to
establish that there was a contract created between the parties upon the subject of
plaintiff’s compensation. It makes no difference that the judgment, or decree, set up by
way of estoppel, was one rendered in an equitable action for an accounting; provided that
the question involved in this common-law action was involved and determined in the
equity action. That a decree rendered in a cause, depending between parties in equity,
may be a bar to an action at law between them cannot be questioned. It turns upon the
scope of the decree. If the same general question furnished the subject-matter of the
controversy — if the material issue was the same in each action — the prior decree must
he regarded as conclusive, under the authorities. If the court, which rendered the prior
judgment between the parties, had jurisdiction of them and of the subject-matter of their
controversy, the principle of its finality is unaffected by the nature of the proceedings
which led to the rendition of the judgment.
3. The law of estoppel is equally applicable. A prior judgment, whether rendered in an action
at law, or in equity concludes the parties upon tho material issues and is conclusive as to
all facts comprehended within the issues submitted, which were relevant and material
and which were so related to the issues that their determination was necessarily involved.
4. The judgment of the Illinois court has established that there was an express contract for
this plaintiff’s compensation, viz.: a salary at the rate of $2,250 a year. The plaintiff was
defeated in the Illinois courts in his claim that there was any promise of additional
compensation. Further, the theory of “ unjust enrichment,” which the appellant’s counsel
presses upon us with liability and with some elaborateness of discussion, is not
applicable; because this is not a case where there was no contract between the parties
providing for the plaintiff’s compensation. The theory depends for its application upon the
failure of the complainant to prove any contract, or to hold the defendants to a liability for
the benefits which they have received under a contract, which is invalid at law. Here there
was an express contract that the plaintiff was to receive a stipulated salary and the
adjudication in the Illinois action, necessarily, proceeded upon the ground that that was
the contract and the only one between the parties.
Tuttle v. Bank
44 N.E. 984
Doctrine: It is recognized that the relation of a stockholder to the corporation is determined by

the laws of the State of the creation of the corporate body, and where the law of the domicil of the
corporation creates a special remedy, that remedy cannot be enforced except within the
jurisdiction of the domicil of the artificial body.
Facts:
1. The National Bank of the Republic of St. Louis, Missouri, recovered a judgment against
Sidney Tuttle by reason of his being a stockholder in the Edwards Country Bank of
Kansas, which became insolvent. The Edwards Country Bank of Kansas owes the
National Bank of the Republic of St. Louis.
2. Edwards Country Bank of Kansas was dissolved and a receiver was appointed.
3. National Bank of the Republic of St. Louis brought an action against the bank and
receiver and recovered a judgment, on which execution issued and was returned since
there were no properties found. The National Bank of the Republic of St. Louis then filed
suit against the stockholders.
4. The Circuit Court of McLean county made a judgment in favor of National Bank of the
Republic of St. Louis, which was affirmed by the Appellate Court of Illinois.
Issue: W/N the creditor bank can sue the stockholders of a bankrupt bank debtor.
Held: The judgment of the appellate court must be reversed and the cause remanded.
Ratio:
1. The court held that the Kansas Constitution, which provided that dues from corporation
should be secured by individual liability of the stockholders to an additional amount equal
to the stock owned by each stockholder and such other means as provided by law, was
not self-executing.
2. The court also found that the creditor cannot rely on Kansas statute that provided for a
remedy against an insolvent corporation’s stockholders.
a. It is recognized that the relation of a stockholder to the corporation is determined
by the laws of the State of the creation of the corporate body, and where the law
of the domicil of the corporation creates a special remedy, that remedy cannot be
enforced except within the jurisdiction of the domicil of the artificial body.
3. It was for the courts of Kansas to determine the relations of the stockholders, creditors,
and corporations to each other. Because such relations had not yet been determined, the
statutes had no effect in the Illinois court.
a. No decree of the courts of this State could result in taking an account and
dissolving a corporation of another State. It is of the courts of that State to enter a
decree stating the account, the winding up of the affairs of the corporation, and
determining the relations of the stockholders, creditors, and corporation to each
other.
b. When that question has been determined by the courts of that State, then of it
becomes necessary, the creditors, stockholders and the corporation, or its
representative, may, as against stockholders who are domiciled here, appeal to
the courts of this State, and have, as against such domiciled stockholders,
adequate relief.
Nat. Bank of Auburn v. Dilingham
42 N.E. 338
Doctrine: The statute which creates the liability is in the nature of a penalty for disobedience to
its commands, while it may not have all the characteristics of a ‘penalty,’ as that term is
commonly understood, being in the nature of a penalty, the rules under the lex fori shall govern.
Facts
1. The action was filed to recover four notes amounting to $20,000 from Auburn Moolen, a
manufacturing corporation. However, the action was filed not against the corporation but
against the trustees of Auburn Wollen.
2. Additionally, neither was there any allegation that the judgment was rendered against the
corporation nor any suit was commenced for that purpose or that it is insolvent nor that
any proceeding for its dissolution has been filed.
3. The defendant trustee filed a demurrer to the action alleging that (1) there is a defect in
parties since the neither corporation nor its other corporations were impleaded and (2)
the complaint did not allege a cause of action.
4. The plaintiff argues that each creditor of such corporation who holds a debt, created by
the trustees or with their assent, in excess of the paid up capital stock may maintain an
action at law against the trustee to recover such debt without any recourse to the
corporation itself and without reference to any creditor.
Issue: Is the statute in question, being in the nature of a penalty, governed by the lex fori?
Ratio:
1. Construction of §24 of the “Stock corporation Law” as to its nature and extent of liability:
No stock corporation except a monied corporation shall create any debt if any, if its total
indebtedness not secured by mortgage shall exceed the amount of paid up capital stock
and the directors creating or consenting to the creation of any such debt shall be
personally liable to the creditors of the corporation.
2. If the bonds or other obligations of the corporation, secured by a mortgage, the directors
voting for such issue or illegal issue shall be personally liable to the holders of the bonds
and other obligations illegally issued for the amounts held by them and to all persons
sustaining damage by such illegal issues for any damage caused thereby.
3. The notes set our in the complaint are the debts of the corporation and not the debts of
the trustees though the latter are subject to a certain liability in regard to them, for the
reason that they have disregarded the statute which forbids the creation of debts in
excess of capital stock. The excess of debts over and above capital stock measures the
possible liability of the trustees, and until the statutory limit is reached there is no liability
whatsoever.
4. To enforce this liability, the benefit of the provision extends to all creditors of the
corporation, not part of them. It was the intention of the law to limit the amount of
unsecured debts, which such corporation might contract to the amount of its paid-up
capital to secure the interest of all creditors. It is an essential and inherent characteristic
of a corporation that it is primarily liable for its own debts. Individual may only be held
liable, except under common law conditions and instances wherein incorporators act as
sureties or guarantors, after the usual remedies against the corporation have been
exhausted.
5. Statutes substantially identical have received construction in the Supreme Court, in
federal courts and in the courts of sister states, in accordance with the views herein
expressed. The court sustained the demurrer inasmuch as the complaint failed to allege
a cause of action (a single creditor seeking to enforce its claim against the trustees) and
failed to implead the proper party.
Marshall v. Sherman
42 N.E. 419
Doctrine: It is a principle of universal application, recognized in all civilized states, that the
statutes of another state have, ex proprio vigore, no force or effect in another. There is, however,
a large class of foreign laws and statutes which, under the doctrine of comity, have no force in
this jurisdiction. It belongs exclusively to each sovereignty to determine for itself whether it can
enforce a foreign law without, at the same time, neglecting the duty that it owes to its own citizens
or subjects.
Facts:
1. This action was brought by a creditor of the Miltonvale State Bank, a corporation
organized under the laws of Kansas or banking purposes, against the defendant, a
stockholder, residing in the state of New York.
2. The bank was incorporated under the laws of Kansas and continued to transact a
banking business in that state until, eventually, wind up its affairs. It has not since that
date transacted any business and it left debts unpaid.
3. Defendant has been the owner of 30 shares of the capital stock of the bank, and at the
time of the appointment of the receiver, the bank was indebted to the plaintiff, as a
depositor. It is then stated that the plaintiff is the owner, by assignment or transfer, of the
claims of other depositors to whom the bank was indebted at the time of the appointment
of the receiver in various small sums, upon which, together, with the claim held by the
plaintiff in his own right, judgment was recovered in the courts of Kansas. The plaintiff
caused execution to be issued upon this judgment against the property of the bank,
which was returned unsatisfied.
4. Judgment against the defendant as a stockholder is demanded for the balance unpaid.
The complaint sets forth certain provisions of the constitution of the state of Kansas, and
the statutes of that state, which, it is claimed, impose a legal liability upon the defendant
in the courts of this state for the payment of the money still due upon the judgment.
Issue: W/N a right of action unknown to the common law, and existing only by force of the
statutes of another state, can be enforced in the courts of this state, or outside of the local
jurisdiction where the corporation is domiciled.
Held: No
Ratio:
1. A right of action against the stockholders of a corporation does not exist at common law,
and ordinarily exists only by virtue of some statutory enactment. In this case the right of
action is founded upon the constitution and statutes of another state.
2. The general rule is that the statutory liability of stockholders in foreign corporations
cannot be enforced except at the domicile of the corporation when the law of the domicile
provides the remedy.
3. It is quite well established that in a case like this an action at law by a single creditor
against a single stockholder for the recovery of a specific sum of money cannot be
maintained in our courts, under our statutes declaring the liability of stockholders. In such
cases the liability must be enforced in equity in a suit brought by or in behalf of all the
creditors against all the stockholders, wherein the amount of the liability and all the
equities can be ascertained and adjusted.
4. All of them that are solvent should contribute in proportion to the amount of their holdings
of stock. We are not informed by the complaint how many stockholders there are, or even
the amount of the capital stock. Nor are we informed whether any of the stockholders are
insolvent. It is quite evident, therefore, that the equitable proportion of the corporate debts
which this defendant should pay cannot be ascertained or determined in this action.
5. In the case at bar the plaintiff's right of action has no other legal or moral basis than the
fiat of a legislature of another state. It is a principle of universal application, recognized in
all civilized states, that the statutes of another state have, ex proprio vigore, no force or
effect in another. The enforcement in our courts of some positive law or regulation of
another state depends upon our own express or tacit consent. The consent is given only
by virtue of the adoption of the doctrine of comity as part of our municipal law.
Scudder v. Bank
91 U.S. 411
Facts:
1. This was an action of assumpsit against William H. Scudder and others, constituting the
firm of Henry Ames & Co., to recover the amount of a bill of exchange. Process was
served only upon Scudder, who pleaded non-assumpsit and several special pleas.
2. The drawees were members of a firm for which a second firm purchased some barrels of
pork. After the purchase was made, a member of the second firm, which was located in
Illinois, prepared a bill of exchange for the amount of the purchase plus the second firm's
commission. The bank refused to accept the bill of exchange without the bill of lading for
the pork or some other security. A member of the second firm then directed the firm's
clerk to return to the bank and to say that one of the members of the drawees's firm,
Scudder, was present, had verbally authorized the drawing of the draft, and that the draft
was drawn against the pork, which was shipped to the drawees's firm. The member of the
drawees's firm heard the direction and did not protest.
3. The statute of Illinois on which one of the pleas is based provides that no action shall be
brought whereby to charge the defendant upon any special promise to answer for the
debt, default, or miscarriage of another person, "unless the promise or agreement upon
which such action shall be brought, or some memorandum or note thereof, shall be in
writing, and signed by the party to be charged therewith, or some other person thereunto
by him specially authorized."
4. The statute of Missouri, on the other hand, provides that:
a. "SECTION 1. No person within this State shall be charged as an acceptor of a bill of
exchange, unless his acceptance shall be in writing, signed by himself or his lawful
agent.
b. "SECT. 2. If such acceptance be written on a paper other than the bill, it shall not
bind the acceptor, except in favor of a person to whom such acceptance shall have
been shown, [***2] and who, upon the faith thereof, shall have received the bill for a
valuable consideration.
c. "SECT. 3. An unconditional promise in writing, to accept a bill before drawn, shall be
deemed an actual acceptance in favor of every person to whom such written
promise shall have been shown, and who, upon the faith thereof, shall have received
the bill for a valuable consideration.
d. "SECT. 4. Every holder of a bill presenting the same for acceptance may require that
the acceptance be written on the bill; and a refusal to comply with such request shall
be deemed a refusal to accept, and the bill may be protested for non-acceptance.
e. "SECT. 5. The proceeding sections shall not be construed to impair the right of any
person to whom a promise to accept a bill may have been made, and who, on the
faith of such promise, shall have drawn or negotiated the bill, to recover damages of
the party making such promise, on his refusal to accept such bill."
5. The jury found a verdict in favor of the bank; and the court, overruling a motion for a new
trial, rendered judgment. Scudder sued out a writ of error.
Issue: Whether Mr. Scudder authorized the drawing of the draft in question, and expressly or
impliedly promised to pay it.
Held: The Court affirmed the findings of the jury, holding that a written promise or agreement to
accept the bill of exchange was unnecessary.
Ratio:
1. Although the bill was payable in Missouri, where a promise to pay was unenforceable
unless written, the court held that the promise to pay was enforceable although not in
writing because it was made in Illinois, where parole promises to pay bills of exchange
were enforceable.
Milliken v. Pratt
28 Am. Rep. 241
Facts:
1. The plaintiffs are partners doing business in Portland, Maine, under the firm name of
Deering, Milliken & Co.
2. The defendant is and has been since 1850, the wife of Daniel Pratt, and both have
always resided in Massachusetts. In 1870, Daniel, who was then doing business in
Massachusetts, applied to the plaintiffs at Portland for credit, and they required of him, as
a condition of granting the same, a guaranty from the defendant to the amount of five
hundred dollars, and accordingly he procured the guaranty from his wife.
3. The guaranty provided :” In consideration of one dollar paid by Deering, Milliken & Co.,
receipt of which is hereby acknowledged, I guarantee the payment to them by Daniel
Pratt of the sum of five hundred dollars, from time to time as he may want—this to be a
continuing guaranty. Sarah A. Pratt." The Guaranty was executed in Massachusetts
4. Relying on such guaranty the plaintiffs subsequently delivered goods to Daniel on credit
from time to time.
5. This action was brought for the payment of goods that were unpaid however the one
dollar mentioned in the guaranty was not paid, and the only consideration moving to the
defendant therefor was the giving of credit by the plaintiffs to her husband.
6. Payment was duly demanded of the defendant before the date of the writ, and was
refused by her.
7. The Superior Court ordered judgment for the defendant; and the plaintiffs appealed to
this court.
Issue: Whether a contract made in another state by a married woman domiciled here (Pratt),
which a married woman was not at the time capable of making under the law of this
Commonwealth, but was then allowed by the law of that state to make, and which she could now
lawfully make in this Commonwealth, will sustain an action against her in our courts.
Held: Yes
Ratio:
1. The general rule is that the validity of a contract is to be determined by the

law of the state in which it is made; if it is valid there, it is deemed valid everywhere, and
will sustain an action in the courts of a state whose laws do not permit such a contract.
Even a contract expressly prohibited by the statutes of the state in which the suit is
brought, if not in itself immoral, is not necessarily nor usually deemed so invalid that the
comity of the state, as administered by its courts, will refuse to entertain an action on
such a contract made by one of its own citizens abroad in a state the laws of which
permit it
2. If the contract is completed in another state, it makes no difference in
principle whether the citizen of this state goes in person, or sends an agent, or writes a
letter, across the boundary line between the two states
3. The guaranty, bearing date of Portland, in the State of Maine, was executed
by the defendant, a married woman, having her home in this Commonwealth, as
collateral security for the liability of her husband for goods sold by the plaintiffs to him,
and was sent by her through him by mail to the plaintiffs at Portland. The sales of the
goods ordered by him from the plaintiffs at Portland, and there delivered by them to him
in person, or to a carrier for him, were made in the State of Maine. The contract between
the defendant and the plaintiffs was complete when the guaranty had been received and
acted on by them at Portland, and not before. It must therefore be treated as made and to
be performed in the State of Maine.
4. It has been often stated by commentators that the law of the domicil,
regulating the capacity of a person, accompanies and governs the person everywhere.
But this statement, in modern times at least, is subject to many qualifications
5. As the law of another state can neither operate nor be executed in this state
by its own force, but only by the comity of this state, its operation and enforcement here
may be restricted by positive prohibition of statute. A state may always by express
enactment protect itself from being obliged to enforce in its courts contracts made abroad
by its citizens, which are not authorized by its own laws. Under the French code, for
instance, which enacts that the laws regulating the status and capacity of persons shall
bind French subjects, even when living in a foreign country, a French court cannot
enforce a contract made by a Frenchman [**19] abroad, which he is incapable of
making by the law of France. See Westlake, §§ 399, 400.
6. It is possible also that in a state where the common law prevailed in full force,
by which a married woman was deemed incapable of binding herself by any contract
whatever, it might be inferred that such an utter incapacity, lasting throughout the joint
lives of husband and wife, must be considered as so fixed by the settled policy of the
state, for the protection of its own citizens, that it could not be held by the courts of that
state to yield to the law of another state in which she might undertake to contract.
7. But it is not true at the present day that all civilized states recognize the
absolute incapacity of married women to make contracts. The tendency of modern
legislation is to enlarge their capacity in this respect, and in many states they have nearly
or quite the same powers as if unmarried. In Massachusetts, even at the time of the
making of the contract in question, a married woman was vested by statute with a very
extensive power to carry on business by herself, and to bind herself by contracts with
regard to her own property, business and earnings, and, before the bringing of the [**20]
present action, the power had been extended so as to include the making of all kinds of
contracts, with any person but her husband, as if she were unmarried. There is therefore
no reason of public policy which should prevent the maintenance of this action.
Pritchard v. Norton
106 U.S. 124
Doctrine:
1. The principle is, that whatever relates merely to the remedy and constitutes part of the
procedure is determined by the law of the forum, for matters of process must be uniform
in the courts of the same country; but whatever goes to the substance of the obligation
and effects the rights of the parties, as growing out of the contract itself, or inhering in it
or attaching to it, is governed by the law of the contract.
2. The question of consideration, whether arising upon the admissibility of evidence or
presented as a point in pleading, is not one of procedure and remedy. It goes to the
substance of the right itself, and belongs to the constitution of the contract.
3. The question of consideration, whether arising upon the admissibility of evidence or
presented as a point in pleading, is not one of procedure and remedy. It goes to the
substance of the right itself, and belongs to the constitution of the contract.
Facts:
1. This action was brought by Eliza D. Pritchard, a citizen of Louisiana, executrix of Richard
Pritchard, deceased, against Norton, a citizen of New York, in the court below, upon a
writing obligatory, of which the following is a copy: --
"STATE OF NEW YORK,
"County of New York.
"Know all men by these presents, that we, Henry S. McComb, of
Wilmington, State of Delaware, and Ex Norton, of the city of New York,
State of New York, are held and firmly bound, jointly and severally, unto
Richard Pritchard, of New Orleans, his executors, administrators, and
assigns, in the sum of fifty-five thousand ($55,000) dollars, lawful money
of the United States, for the payment whereof we bind ourselves, our
heirs, executors, and administrators firmly by these presents. Sealed with
our seals and dated this thirtieth day of June, A.D. eighteen hundred and
seventy-four.
"Whereas the aforesaid Richard Pritchard has signed an appeal bond as
one of the sureties thereon, jointly and severally, on behalf of the
defendant, appellant in the suit of J. P. Harrison, Jr. v. The New Orleans,
Jackson, and Great Northern Railroad Co., No. 9261 on the docket of the
Seventh District Court for the Parish of Orleans:
"Now, the condition of the above obligation is such that if the aforesaid
obligors shall hold harmless and fully indemnify the said Richard
Pritchard against all loss or damage arising from his liability as surety on
the said appeal bond, then this obligation shall be null and void;
otherwise, shall remain in full force and effect.
"H. S. McCOMB. [L.S.]
"EX NORTON. [L.S.]"
2. The appeal bond mentioned in the bond was executed.
3. A judgment was rendered on that appeal in the Supreme Court of Louisiana, May 30,
1876, against the railroad company, in satisfaction of which Pritchard became liable to
pay, and did pay, the amount, to recover which this action was brought against Norton.
The condition of this appeal bond was that the company "shall prosecute its said appeal,
and shall satisfy whatever judgment may be rendered against it, or that the same shall be
satisfied by the proceeds of the sale of its estate, real or personal, if it be cast in the
appeal; otherwise that the said Pritchard et al., sureties, shall be liable in its place."
4. The defendant set up, by way of defence, that the bond sued on was executed and
delivered by him to Pritchard in the State of New York, and without any consideration
therefor, and that by the laws of that state it was void, by reason thereof.
5. There was evidence on the trial tending to prove that the appeal bond was not signed by
Pritchard at the instance or request of McComb or Norton, and that there was no
consideration for their signing and executing the bond of indemnity passing at the time,
and that the latter was executed and delivered in New York. There was also put in
evidence the following provisions of the Revised Statutes of that State, 2 Rev. Stat. 406:
--
"SECT. 77. In every action upon a sealed instrument, and when a set-off is
founded upon any sealed instrument, the seal thereof shall only be presumptive
evidence of a sufficient consideration, which may be rebutted in the same
manner and to the same extent as if the instrument were not sealed.
"SECT. 78. The defence allowed by the last section shall not be made unless the
defendant shall have pleaded the same, or shall have given notice thereof at the
time of pleading the general issue, or some other plea denying the contract on
which the action is brought."
6. At the request of the defendant the Circuit Court Charged the jury that the indemnifying
bond, in respect to its validity and the consideration requisite to support it, was to be
governed by the law of New York, and not of Louisiana; and that if they believed from the
evidence that the appeal bond signed by Richard Pritchard as surety was not signed by
him at the instance or request of McComb and Norton, or either of them, and that no
consideration passed between Pritchard and McComb and Norton for the signing and
execution of the indemnifying bond by them, then that the bond was void for want and
absence of any consideration valid in law to sustain it, and no recovery could be had
upon it.
7. The plaintiff requested the court to charge the jury that if they found from the evidence
that the consideration for the indemnifying bond was the obligation contracted by
Pritchard as surety on the appeal bond, and that the object of the indemnifying bond was
to hold harmless and indemnify Pritchard from loss or damage by reason of or growing
out of said appeal bond, then that the consideration for said indemnifying bond was good
and valid, and is competent to support the action upon the bond for the recovery of any
such loss or damage sustained by Pritchard. This request the court refused. Exceptions
were duly taken to these rulings, which the plaintiff now assigns for error, there having
been a judgment for the defendant, which she seeks to reverse.
8. Plaintiff executrix sought review of a judgment the Circuit Court of the United States for
the District of Louisiana, which ruled in favor of defendant in the executrix's action to
enforce an appeal bond.
Issue: Whether the law of New York or that of Louisiana defines and fixes the rights and
obligations of the parties. If the former applies, the judgment of the court below is correct; if the
later, it is erroneous.
Held: We do not hesitate, therefore, to decide that the bond of indemnity sued on was entered
into with a view to the law of Louisiana as the place for the fulfilment of its obligation; and that the
question of its validity, as depending on the character and sufficiency of the consideration, should
be determined by the law of Louisiana, and not that of New York. For error in its rulings on this
point, consequently, the judgment of the Circuit Court is reversed, with directions to grant a new
trial. New trial ordered.
Ratio:
1. The argument in support of the judgment is simple, and may be briefly stated. It is, that
New York is the place of the contract, both because it was executed and delivered there,
and because no other place of performance being either designated or necessarily
implied, it was to be performed there; wherefore the law of New York, as the lex loci
contractus, in both senses, being lex loci celebrationis and lex loci solutionis, must apply
to determine not only the form of the contract, but also its validity.
2. On the other hand, the application of the law of Louisiana may be considered in two
aspects: as the lex fori, the suit having been brought in a court exercising jurisdiction
within its territory and administering its laws; and as the lex loci solutionis, the obligation
of the bond of indemnity being to place the fund for payment in the hands of the surety, or
to repay him the amount of his advance, in the place where he was bound to discharge
his own liability.
3. If now we examine the terms of the bond of indemnity, and the situation and relation of
the parties, we shall find conclusive corroboration of the presumption that the obligation
was entered into in view of the laws of Louisiana.
4. The antecedent liability of Pritchard, as surety for the railroad company on the appeal
bond, was confessedly contracted in that State, according to its laws, and it was there
alone that it could be performed and discharged. Its undertaking was, that Pritchard
should, in certain contingencies, satisfy a judgment of its courts. That could be done only
within its territory and according to its laws.
a. The condition of the obligation, which is the basis of this action, is, that McComb
and Norton, the obligors, shall hold harmless and fully indemnify Pritchard
against all loss or damage arising from his liability as surety on the appeal bond.
A judgment was, in fact, rendered against him on it in Louisiana.
b. There was but one way in which the obligors in the indemnity bond could
perfectly satisfy its warranty. That was, the moment the judgment was rendered
against Pritchard on the appeal bond, to come forward in his stead, and, by
payment, to extinguish it. He was entitled to demand this before any payment by
himself, and to require that the fund should be forthcoming at the place where
otherwise he could be required to pay it.
c. Even if it should be thought that Pritchard was bound to pay the judgment
recovered against himself, before his right of recourse accrued upon the bond of
indemnity, nevertheless he was entitled to be reimbursed the amount of his
advance at the same place where he had been required to make it.
d. So that it is clear, beyond any doubt, that the obligation of the indemnity was to
be fulfilled in Louisiana, and, consequently, is subject, in all matters affecting its
construction and validity, to the law of that locality.
Ruhe v. Buck
27 S.W. 412
Doctrine: It is universally admitted and established that forms of remedies and modes of
proceeding and the execution of judgments are to be regulated solely and exclusively by the laws
of the place where the action is institution, or according to the lex fori.
While the rights emanating from the contract are determined by the lex loci contractus, the law of
the remedy is no part of the contract.
Facts:
1. Mrs. Buck, the wife of O. W. Buck, became the purchaser of a city lot in Tarkio, Missouri., and
held a bond for title from Perkins, the owner, until a balance of the purchase money should be
paid.
a. Under the firm name of O. W. Buck & Co., Mrs. Buck and her husband became indebted
in Dakota, and the interest of herself and her husband in said lot was attached for said
debt, in an action commenced in the circuit court of Atchison county, Missouri.
b. After this attachment was levied on the lot, Mrs. Buck sold the lot to Thompson and Trout,
who then paid the balance of the purchase money to Perkins, and received a warranty
deed from Perkins, which was recorded.
2. At the time of the transactions involved, a married woman in Missouri incompetent to make a
valid contract at law. However, she was authorized by the laws of Dakota to contract as a
feme sole, and sue and be sued as such.
Issue: Whether an action against a married woman alone can be pursued in the State of
Missouri.
Held: No. A purchaser's rights ought not to depend upon the accidental circumstance of the place
of the execution of the contract upon which the judgment is based. The circuit court properly held
that the proceedings by attachment against Mrs. Buck were void, and hence presented no
obstacle to the purchase by Trout and Thompson, and its judgment is affirmed.
Ratio:
1. It is universally admitted and established that forms of remedies and modes of proceeding
and the execution of judgments are to be regulated solely and exclusively by the laws of the
place where the action is institution, or according to the lex fori.
a. While the rights emanating from the contract are determined by the lex loci contractus,
the law of the remedy is no part of the contract.
b. When the question is settled that the contract of the parties is legal and valid, and what is
the true interpretation of the language employed by the parties in forming it, the lex loci
ceases its functions, and the lex fori steps in, and determines the time, the mode, and the
extent of the remedy.
c. While the spirit of comity between states gives sufficient ground for a state to give effect
to a contract executed outside its borders even if it does not conform to the required
forms in its own jurisdiction (as in the case of Milliken v. Pratt), such spirit of comity does
not require a state to award a non-resident a remedy at war with its own policy, and one
which the constantly denied her own citizens.
i. The rule which recognizes the binding force of the contract where made has never
gone to the extent of attaching to it the local remedies. Each jurisdiction is allowed to
enforce a contract according to its own laws.
2. It is settled in Missouri that a married woman does not have the power and capacity to sue
and be sued by herself.
Atwood v. Walker
61 N.E. 58
Doctrine: Where contract was made in one state for purchase of land in another, and suit
for breach was brought in state where land is located, the law of the state where the contract was
executed governs.
Facts
1. Plaintiff Atwood commenced the action for breach of contract for failure of Walker to convey a
parcel of land and personal property found in Massachusetts. Atwood was a resident of
Connecticut and was temporarily residing in Springfield. Conversely, the defendant was
resident of New York.
2. The parties never met. William Man (from New York) entered into negotiations in behalf of
the defendant as his agent and attorney.
3. The alleged contract was mentioned in various letters between Man and Atwood. Moreover,
there were verbal negotiations between the two at Man’s office in New York. Defendant
however failed to make good her title to the real estate, but defendant was in good faith.
4. Plaintiff did not pay anything but still filed a claim for damages in a Massachusetts court.
Under the Massachusetts law, the plaintiff can recover damages regardless of whether there
was good faith on the part of the defendant. However the New York law states that if the
contract was made and to be executed in such place, when the defendant was in good faith,
the plaintiff who has paid nothing, can recover nothing.
5. The Massachusettes jury found for the plaintiff, awarding an amount based on the instruction
of the judge who said that “if the contract was made, and the defendant failed to carry it out,
or refused to do so, by reason of inability to give a good title, the plaintiff can’t recover
damages. This is now an appeal to that decision.
Issue: Which law should apply, Massachusetts or New York law?
Held: The law of New York applies.
Ratio:
1. Although the land and the action for breach was bought in Massachusetts, the contract
was made in New York.
2. The nature, validity and interpretation of a contract is governed by the lex loci contractus.
The contracts are presumed to be made with reference to the law of the place where they
are entered into, unless they are entered into with reference to the law of some other
state or country.
a. So the lex loci contractus governs in all matters relating to the substantive rights
of the parties, and these rights will be enforced by a foreign jurisdiction, if there is
nothing in them against its view of public policy.
3. The New York contract sought to convey a certain piece of land. Its meaning and effect,
according to the New York law applicable to it, is that the defendant who was acting in
good faith, turns out to be unable to make a good title, should not give to the plaintiff the
profits of his bargain, but should save him from loss, and put him in as good a position as
if the contract had not been made.
a. This is the true interpretation of the contract, reading it in connection with the law
that determines its effect, which is New York law.
b. The contract cannot be made a different contract, or given a greater effect, by
bringing an action upon it in the writing and the law by which it is to be
interpreted.
c. When the breach occurred, the details of the damages were immediately fixed by
the writing, the law, and the conditions then existing. When the present action
was brought, it was to recover the damages due under the contract. These
damages grew out of a contract and transactions which had been concluded in
New York, and were the cause of action on which the plaintiff seeks to recover
here. The ruling of the trial court, awarding damages based on Massachusetts
law, is therefore incorrect.
Wolf v. Burke
32 Pac. 427
Doctrines:
1. The rights and titles to real property are governed by the law of the situs, and there is
strong reason, supported by good authority, for saying that the law of evidence of the
situs respecting such rights and titles should also govern.
2. The contract was made, and is to be performed, in that territory, and the property to be
affected by its terms is there situate. By well-settled principles, the validity of the contract,
under these circumstances, must be determined by the laws of Idaho.
Facts:
1. Wolf alleges that on September 3, 1885, Thomas Burke, A. Weed, and R. L. Hopkins
were partners doing a general mining and other business under the name and style of the
Coeur D'Alene Bed-Rock Flume Pool, and were engaged in the construction of a mining
ditch or flume, in Idaho territory, for the purpose of mining the property purchased by
them from Wolf.
2. Burke, et al. (defendant) sought to buy the property from Wolf, and Wolf agreed. Wolf
even agreed to sell the interest of a certain Sanders, who owns 1/6 of the property should
he obtain that interest in his name.
3. The defendants made a promissory note in which they promised to pay Wolf in exchange
for the interest in the property.
4. Extension of time for payment and receipt of some of the payments were entered into in
the note.
5. In pursuance of this agreement, Wolf brought suit against Sanders for his interest in said
placer claim, and, as the result of said suit, obtained title thereto, to himself, for the
benefit of the defendants, as per their agreement.
6. Wolf alleged that in bringing such suit, and obtaining such title, he incurred and paid out
the sum of $124.10. It was further alleged that no part of said note, and no part of the
deferred payments have been made, and same are wholly unpaid and due to Wolf,
together with interest thereon; that the deed from Wolf, transferring his interests to the
defendants, still remains in the bank, in accordance with the agreement between plaintiff
and defendants.
7. Wolf sought judgment on the note, and deferred payments with interests.
8. District Court held in favor of the defendants because the contract was not written, in
accordance with the statues of Colorado.
Issue:
o W/N the law of the State of Colorado shall govern the contract executed in the state of
Illinois
Held: No
Ratio:
1. The district court was of the opinion that the contract was in contravention of the statute
of frauds, and void. If we are to assume that the contract is void in consequence of not
being in writing, it must be so by reason of the laws of the territory of Idaho. The contract
was made, and is to be performed, in that territory, and the property to be affected by its
terms is there situate. By well-settled principles, the validity of the contract, under these
circumstances, must be determined by the laws of Idaho. It was a valid contract at
common law, and no evidence was introduced to show that it was not valid under the
laws of the territory of Idaho. No presumption should therefore have been indulged in,
against the validity of the contract, by reason of any statute of this state.
2. The Court cited Railroad Co. v. Betts, 10 Colo. 437, 15 Pac. Rep. 821; and the court cited
with approval Whitford v. Railroad Co., 23 N. Y. 465, in which case the court says:
‘Where the condition of the law of another state becomes material, and no evidence has
been offered concerning it, our courts will presume that the general principles of the
common law, which we always consider to be consonant to reason and natural justice,
prevail there. But no such presumption obtains respecting the positive statute law of the
state. There is generally no probability in point of fact, and there is never any
presumption of law, that other states or countries have established, precisely or
substantially, the same arbitrary rules which the domestic legislature has seen fit to
enact.’
3. The law of Colorado provides: ‘Every contract for the leasing for a longer period than one
year, or for the sale of any lands, or any interest in lands, shall be void, unless the
contract, or some note or memorandum thereof, expressing the consideration, be in
writing, and be subscribed by the party by whom the lease or sale is to be made.’
o It does not prohibit the bringing of an action in cases falling within its provisions,
but declares that the contract itself shall be void in such cases.
o Such a statute does not affect the rules of evidence governing contracts like the
one now under consideration.
4. The entire trial in the court below proceeded upon the assumption that the eighth section
of the statute of frauds of Colorado controlled. This was error, for which the judgment of
the district court must be reversed. Case remanded.
Southern Express Co. v. Gibbs
46 South 465
Donctrine: The lex loci contractus is to govern, unless it appears upon the face of the contract
that it was to be performed in some other place, or made with reference to the laws of some other
place, and then the rule of interpretation is governed by the law of the place.
Facts:
1. An action for damages for breach of a contract against Gibbs for his failure to deliver to
Southern Express Company at Birmingham, Alabama certain goods which it contracted
to deliver as a common carrier for a reward.
a. Goods valued at $800 but Gibbs wants to confine it to $50 since is alleged in
these pleas was the agreed value of the goods when accepted for shipment by
the Adams Express Company in the city of New York, and that such a stipulation
is valid under the laws of New York.
b. There was no contention as to where the contract of acceptance and delivery
was made.
2. The court noted that the contract did not appear to have been entered in New York.
a. Although it might appear that the contract was made in some state other than
New York, the same rule prevails as to the invalidity of the contract as it does in
this state.
i. Court also noted that in Alabama, the limitation of liability is a violation of
public policy where the agreed valuation is disproportionate to the real
value of goods, although the contents of the package or its real value
were not disclosed to the carrier.
Issue: W/N New York Law or Alamba law applies
Held: Alabama rule governs
Ratio:
1. The universal rule is that a contract, as to its nature, obligation, and validity, is to be
governed by the law of the state where made, unless it is performed in another state.
a. Lex loci contractus is to govern, unless it appears upon the face of the contract
that it was to be performed in some other place, or made with reference to the
laws of some other place, and then the rule of interpretation is governed by the
law of the place.
b. The place of delivery was a material and important part of the contract, and until
such delivery the same was not completed and fulfilled.
2. Failure to deliver baggage to plaintiff in Alabama lead to a breach of the contract and as
the final destination. Thus, the law to govern delivery is Alabama law. This is different
from place where the contract was made, and it is a reasonable inference that it was in
the contemplation of the parties at the time, and that it was entered into with reference to
the laws of the place where it was to be delivered.
Beggs vs. Bartels
46 Atl. 874
Facts:
1. Beggs sold a stationary engine, boiler, and machinery to Roberts.
2. They executed a written contract of sale in New York.
3. The contract reserved title in the sellers until full payment was made.
4. The property was delivered to the buyer in Connecticut.
5. The contract complied with all the provisions of New York law on conditional sale, except
for the acknowledgment, making it an absolute sale in Connecticut but not between the
parties.
6. The properties were later sold on execution against the buyer and are now in the hands
of the buyer’s creditors, Bartels.
7. In a suit in the lower court by the sellers against the execution purchasers, the trial court
held that Connecticut law must govern the contract since the contract was to have its
whole beneficial operation and effect in Connecticut even though it was made in New
York and the property was delivered there.
Issue: Whether Connecticut or New York Law applies.
Held: Connecticut law governs the contract
Ratio:
1. The general rule that the lex loci contractus is applicable to the validity and construction
of contracts assumes that the contract is to be performed where it is made.
2. The reason for this rule is that the parties are ordinarily supposed to contract in view of
the laws in force at the time and place of the making of the contract.
3. The general rule does not apply when it appears that the contract is to be performed or is
to have beneficial operation and effect elsewhere, or that it is made with reference to the
laws of another place.
4. From the facts that the contract was executed in New York and the goods delivered to
Roberts upon the cars in that state, it does not necessarily follow that the laws of New
York govern upon the question of the validity and effect of the contract.
5. While the formal execution of the contract was in New York, the principal acts necessary
to effect its objects were by the terms of the contract to be performed in Connecticut.
6. The transaction was begun in New York, but was to be performed and completed in
Connecticut, and the parties must be held to have contracted with reference to the law of
this state, and that law must govern.
7. Defendants thus obtained valid title by the levy of execution upon the property in
Connecticut.
8. The contention of the defendants may not also be sustained upon considerations of
public policy.
Fidelity Mut. Life Assn. v. Jeffords
107 Fed. 402
Facts:
1. Jeffords is a citizen of Georgia.
2. Fidelity Insurance was incorporated under the laws of Pennsylvania.
3. An action based on a life insurance policy was brought by Jeffords against Fidelity Mutual
Life in the city court of Savannah, Georgia.
4. According to the petition, Fidelity issued to Martin Jeffords a policy of insurance,
promising to pay $10,000 to Thomas Jeffords and $3,000 to Edna Jeffords within three
months, after satisfactory proof of the death of Martin.
5. Thomas (beneficiary) claims that due notice of death was given and thereafter, a demand
for payment was made to and refused by Fidelity.
6. The three month period to pay had elapsed.
7. Fidelity said that the reason for refusal was because Martin concealed his illness.
Thomas countered that Martin had no knowledge of his illness when he contracted the
insurance policy.
8. Georgia’s Laws require applications for life insurance to be made in the utmost good
faith, and declares that representations are considered as covenanted to be true and that
a variation by which the nature, extent, or character of the risk is changed will void the
policy.
9. It also declares that failure to state a material fact, if not done fraudulently, does not avoid
the policy, but the willful concealment thereof enhancing the risk will avoid it.
10. Lastly, it avoids a policy for willful misrepresentation as to any material inquiry made.
11. Meanwhile, Pennsylvania law voids policies by reason of concealment without any
qualification.
Issue: Whether Georgia Law or Pennsylvania Law would apply
Held: Georgia Law applies and as such, beneficiaries may claim insurance proceeds
Ratio:
1. A contract of life insurance, made and delivered and the premiums paid in the state
where insured resided, is a contract of that state and governed by its laws.
2. In the case at bar, it was in Georgia wherein the contract of insurance was made and
delivered, and the premiums paid. Georgia is also the state where the insured Martin
resided.
3. In the eyes of the law, the insurance policy is therefore a Georgia contract. The effect of
being such a contract is that it governed by the laws of that state.
4. In view of the statute, that an untrue statement by insured would not avoid his policy, if
his answers were made in good faith, and the misstatement or omission was not willful,
but due solely to his ignorance or failure to recollect, even if he distinctly certified that his
answers were true, and agreed that, if any concealment or untrue statement or answer
be made, the policy should be void.
Northwestern S. S. Co. v. Ins. Co.
161 Fed. 166
Doctrine: A policy of insurance on an American vessel issued in England and there delivered to
brokers who paid the premium, is an English contract to be construed and enforced according to
English law.
Facts:
1. There was a policy insuring the steamship Tacoma, merchant vessel of the United
States, against war risks only for a voyage from Seattle to Vladivostok.
2. Charles Neston Company acted as agent for the owner of the ship and obtained a policy
in San Francisco. It was issued in England, delivered to brokers there, and premium was
paid there.
3. The ship was detained by ice in the Okhostk Sea while attempting its voyage for 40 days.
When released, the Japanese confiscated it as a prize of war.
4. The insurance company claims that the policy excluded warranted free of capture,
seizure and detention.
5. In England, if the cargo is being carried for use by the belligerent forces, it would justify
the condemnation of the ship
Issue: W/N English law governs
Held: Yes
Ratio:
1. A policy of insurance on an American vessel issued in England and there delivered to
brokers who paid the premium, is an English contract to be construed and enforced
according to English law.
2. Under English law, in their contractual relations, parties are required to be candid and
reasonable in negotiating contracts and to keep good faith in discharging obligations.
3. In England, the law applicable to insurance contracts requires an applicant to disclose all
material facts. A policy insuring a ship for a voyage insures only for that particular
voyage.
4. Here, the plaintiff did engage in material representations. The policy must be recognized.
Equitable Life Assur. Soc. Of U.S. v. Trimble
83 Fed. 85
Doctrine:
1. The laws of the place of making of the contract, and the place where all the conditions of
the policy are to be performed, shall govern with respect to the stipulations of the
contract.
Facts:
1. This suit was brought upon a policy of assurance issued by the Equitable Life Assur. Soc.
of the United States (Equitable), a New York corporation, upon the life of one Edward H.
Fleming, a then resident of Fresno county, California, payable upon his death to his wife,
Sallie F. Fleming. Edward H. Fleming having deceased, the suit was begun October 17,
1895, by the beneficiary named in the policy, under the name of Sallie F. Redding.
2. Thereafter, upon suggestion to the court below of the death of Sallie F. Redding since the
beginning of the action, and upon the production of letters of administration with the will
annexed granted to William P. Trimble upon the estate of the deceased, Sallie F.
Redding, the court, on the application of the administrator, made an order permitting
Trimble, as such administrator, to prosecute the action, and substituting him as plaintiff
therein, of which due notice was given the defendant's attorneys. The trial of the cause
resulted in a judgment for the plaintiff.
3. The main point presented and argued on the part of Equitable is that the policy sued on
was not a New York contract, and therefore not governed by the New York statute in
relation to life insurance companies.
4. Equitable argued that since the premiums to the policy were not paid, the policy and all
the payments paid pursuant to it would be forfeited.
Issue: W/N the insurance policy was a New York contract governed by New York law?
Held: YES
1. The policy was a New York contract as New York was the place of its making and the
place where all the conditions of the policy were to be performed, i.e., the premiums were
to be paid in New York, proof of loss was to be made there, and the payment in the event
of the death of the insured was to be made there.
2. Under New York law, the insurer could not declare the policy lapsed or forfeited by
reason of nonpayment of premium without proper notice.
a. The New York statute provides that “Whenever any premium or interest due
upon any such policy shall remain unpaid when due, a written or printed notice
stating the amount of such premium or interest due on such policy, the place
where said premium or interest should be paid, and the person to whom the
same is payable, shall be duly addressed and mailed to the person whose life is
assured, or the assignee of the policy, if notice of the assignment has been given
to the company, at his or her last known post-office address, postage paid by the
company, or by an agent of such company or person appointed by it to collect
such premium. Such notice shall further state that unless the said premium or
interest then due shall be paid to the company or to a duly appointed agent, or
other person authorized to collect such premium within thirty days after the
mailing of such notice, the said policy and all payments thereon will become
forfeited and void.”
3. The Statute is mandatory in nature. Here, Equitable failed to provide proper notice of
non-payment of premiums, so the policy remained in effect, and Trimble may claim the
proceeds thereof.
Phipps v. Harding
70 Fed. 468
Doctrine: The nature of the liability created is governed by the law of the place of creating the
obligation. Thus whether an anomalous indorser is a joint maker is determined by the law of the
place of indorsement.
Facts:
1. Harding loaned the sum of $5,000 to Hudson Furniture Co., which amount was payable
by a promissory note executed by the latter in the state of Wisconsin, its state of creation.
2. In the course of its delivery, the plaintiffs signed their names on the back of the note for
the purpose of giving credit to such note with the payee.
3. Ultimately, the promissory note was mailed to Harding at his residence in the state of
Massachusetts. It was received by Harding in Massachusetts, and there accepted by
him.
4. The note was not paid at maturity. The plaintiffs were not notified of its non-payment.
5. However, the laws of Massachusetts state that “all persons becoming parties to
promissory notes payable on time, by signatures on the back thereof, shall be entitled to
notice of the non-payment thereof the same as endorsers.”
Issue: W/N the statute of the state to which reference has been made is operative to clothe the
joint makers with the rights to notice of protest that an indorser is entitled to.
Held: Yes
Ratio:
1. If the note is delivered at a place other than at the place of execution, the law of the place
delivered controls. The plaintiffs being joint makes of a note payable and delivered in the
state of Massachusetts, their obligation is to be judged by the law of that state.
2. The nature of the liability created is governed by the law of the place of creating the
obligation. Thus whether an anomalous indorser is a joint maker is determined by the law
of the place of indorsement.
3. Each state has the right to impose such conditions and limitations upon contracts, not
inhibited by the terms of its own or the federal constitution, as it may see proper.
4. The laws of Massachusetts is a valid exercise of power, and became a term of this
contract. That there should be demand of payment and notice of dishonor were terms
incorporated into this contract. The reason for the law is that the indorser might take
prompt measures for his security, and the law presumed injury from want of notice of
dishonor.
Smith v. Ins. Co.
5 Fed 582
Facts:
1. This suit is an action brought in the court of Massachusetts upon a policy of insurance for
$3,000, issued by the defendant corporation upon the life of Arthur R. Smith, and payable
at the office of the company, in the city of New York, to his personal representatives, in
60 days after notice and proof of the death of the assured.
2. The plaintiff is the widow of the assured, and has become the purchaser of the policy
from the administrator of her husband
3. The defendant corporation is a life insurance company, incorporated by the laws of the
state of New York, having its usual place of business in the city of New York, and has
been duly authorized to do business in the state of Massachusetts, under the laws
thereof. Its business here is conducted by a general and subagents, who have received
certificates from the insurance commissioner, authorizing them to transact its business
within the state.
4. The application of the assured, a citizen of Massachusetts, was made through the agent
of the company in Springfield, and was by him transmitted to the office of the company in
New York. The policy was made and executed in New York, and was sent by mail to the
agent in Springfield, and there delivered by him to the assured.
5. The premiums, which became due prior to May 18, 1867, were duly paid, but those that
became due on that day and on May 18, 1877, were never paid. Arthur R. Smith died
July 24, 1877. The value of the policy on May 18, 1876, was sufficient to have continued
it in force if the Massachusetts Statute is applicable.
Issue: W/N the non-forfeiture law of the state of Massachusetts applies
Held: The non-forfeiture law of the state of Massachusetts does not apply
Ratio:
1. In elaborate and exhaustive judgments it was decided by the learned justice that the
policies were to be governed by the law of the states where the companies were
incorporated, and where the contracts were to be performed, and the Act does not have
the effect to extend to such policies the non-forfeiture act.
2. Policies of insurance issued by foreign companies doing business in Massachusetts,
under the laws thereof, to citizens of Massachusetts, are governed by the laws of the
state where the companies were incorporated, and where the contracts were to be
performed.
Sturdivant v. Bank
60 Fed. 730
Doctrine: A note made in one state and payable in another, is not subject to the usury laws of the
latter state, if it is valid in that respect in the state where it was made.
Facts:
3. Sturdivant executed a promissory note, in the amount of $7,500 with 8% interest, in favor
of Waddill, Catchings & Co., payable in Memphis, Tennessee (Waddill’s office).
4. For value and before maturity, Waddill indorsed and delivered said note, to the Valley
Commission Company, who afterwards, before maturity of said note, indorsed and
delivered the same to Memphis National Bank, who bought said note in good faith, for
value.
5. Memphis filed this action against Sturdivant upon promissory note.
Issue: W/N the Tennessee Law will apply

Held: Yes
Ratio:
17. The obligation sued on appears to have been executed by citizens of Mississippi in the
state of Mississippi, where the laws permit a rate of interest to be stipulated not in excess
of 10 per centum per annum. The general principle in relation to contracts made in one
place, to be performed in another, is well settled: They are to be governed by the law of
the place of performance. If the interest allowed by the law of the place of performance is
higher than that permitted at the place of contract, the parties may stipulate for the higher
interest without incurring penalties of usury. The converse of this proposition is also well
settled: If the rate of interest be higher at the place of the contract than at the place of
performance, the parties may lawfully contract in that case, also, for the higher rate.’
18. The obligation having been made in the state of Mississippi, but being by the parties
made payable in the state of Tennessee, said obligation, in the matter of performance, is
to be governed by the law of the place where the performance is stipulated to be made.
The general principle in relation to contracts made in one place, to be performed in
another, is well settled: They are to be governed by the law of the place of performance.
19. In this case, the law of the state of Tennessee, applicable, is that any contract made in
another state, valid according to the laws of that state, to be performed in the state of
Tennessee, shall be executed in Tennessee, in respect to interest, according to the
stipulation of the parties.
20. So that, as we view the case, the whole matter of performance, both as to principal and
interest, is determined in accordance with the laws of the state of Tennessee.
Wayman v. Southard
6 L. Ed. 253
Doctrine: In every forum a contract is governed by the law with a view to which it was made.
Facts:
1. This case stems from a motion made by Wayman to quash the Marshal's return on an
execution issued on a judgment obtained in the Circuit Court for the District of Kentucky,
and also to quash the replevin bond taken on the said execution, on the following
grounds:
a. Because the Marshal, in taking the replevin bond, and making said return, has
proceeded under the statutes of Kentucky, in relation to executions; which
statutes are not applicable to executions issuing on judgments in this Court, but
the Marshal is to proceed with such executions according to the rules of the
common law, as modified by acts of Congress, and the rules of this Court, and of
the Supreme Court of the United States.
2. That if the statutes of Kentucky, in relation to executions, are binding on this Court, viz.
the statute which requires the plaintiff to endorse on the execution, that bank notes of the
Bank of Kentucky, or notes of the Bank of the Commonwealth of Kentucky, will be
received in payment, or that the defendant may replevy the debt for two years, are in
violation of the constitution of the United States, and of the State of Kentucky, and void.
3. That all the statutes of Kentucky which authorize a defendant to give a replevin bond in
satisfaction of a judgment or execution, are unconstitutional and void.
4. Because there is no law obligatory on the said Marshal, which authorized or justified him
in taking the said replevin bond, or in making the said return on the said execution.
5. Wayman contends that Congress had the authority to regulate the proceedings of federal
courts, while Southland argued that Congress had no power over executions issued on
judgments obtained by individuals, and the authority of states on this issue remained
unaffected by the U.S. Constitution. Southland further alleged that Congress should not
by law regulate the conduct of its officers in the service of executions on judgments
rendered in the federal courts as such power was reserved to the states.
Issues:
1. Whether, by the constitution of the United States, Congress has the power to regulate the
proceedings of the Federal Courts
2. Whether Congress has regulated those proceedings, and in what manner
Held/Ratio:
1. The Constitution concludes its enumeration of granted powers, with a clause authorizing
Congress to make all laws which shall be necessary and proper for carrying into
execution the foregoing powers, and all other powers vested by this constitution in the
government of the United States, or in any department or officer thereof. The judicial
department is invested with jurisdiction in certain specified cases, in all which it has
power to render judgment. That a power to make laws for carrying into execution all the
judgments which the judicial department has power to pronounce, is expressly conferred
by this clause, seems to be one of those plain propositions which reasoning cannot
render plainer. The terms of the clause, neither require nor admit of elucidation. The
court, therefore, will only say, that no doubt whatever is entertained on the power of
Congress over the subject. The only inquiry is, how far has this power been exercised?
2. Section 13 of the Judiciary Act of 1789, ch. 20, describes the jurisdiction of the Supreme
Court, and grants the power to issue writs of prohibition and mandamus, in certain
specified cases. Section 14 enacts, that all the before mentioned courts of the United
States shall have power to issue writs of scire facias, habeas corpus, and all other writs
not specially provided by statute, which may be necessary for the exercise of their
respective jurisdictions, and agreeable to the principles and usages of law. Section 17
authorizes the courts to make all necessary rules for the orderly conducting business in
the said courts; and the section 18, empowers a court to suspend execution, in order to
give time for granting a new trial.
3. The jurisdiction of a court is not exhausted by the rendition of its judgment, but continues
until that judgment shall be satisfied. Many questions arise on the process subsequent to
the judgment, in which jurisdiction is to be exercised. It is, therefore, no unreasonable
extension of the words of the Judiciary Act of 1789, ch. 20, to suppose an execution
necessary for the exercise of jurisdiction.
4. On the clearest principles of just construction, then, the Judiciary Act of 1789, ch. 20, §
14 must be understood, as giving to the courts of the Union, respectively, a power to
issue executions on their judgments.
5. The Judiciary Act of 1789, ch. 10, § 34 provides that the laws of the several states,
except where the constitution, treaties, or statutes, of the United States, shall otherwise
require or provide, shall be regarded as rules of decision in trials at common law, in the
courts of the United States, in cases where they apply.
6. The Judiciary Act of 1789, ch. 20, § 34 has no application to the practice of a federal
court, or to the conduct of its officer, in the service of an execution.
7. It will not be contended that Congress can delegate to the federal courts, or to any other
tribunals, powers which are strictly and exclusively legislative. But Congress may
certainly delegate to others, powers which the legislature may rightfully exercise itself.
The 17th section of the Judiciary Act of 1789, ch. 20, and the 7th section of the additional
act, empower the federal courts respectively to regulate their practice.
In every forum a contract is governed by the law with a view to which it was made.
Hall v. Cordell
35 L.Ed. 956
Doctrine: The laws of the state where the contract was to be performed determine the rights of
the parties to the contract.
Facts:
1. This is an action of assumpsit based upon an alleged verbal agreement made at
Marshall, Missouri, between bankers Cordell & Dunnica, who were operating in Missouri,
and, Hall Bros. & Co. who was doing business in Illinois.
2. The alleged agreement was, in substance, that Hall Bros. & Co. would accept and pay, or
pay on presentation, all drafts made upon them by one George Farlow in favor of Cordell
& Dunnica, for the cost of any livestock bought by Farlow and shipped by him from
Missouri to Hall Bros. & Co. at the Union Stockyards at Chicago.
3. At the time of the shipment, Farlow, at Marshall, Missouri, the place of agreement, made
his draft, upon Hall Bros. & Co. at the Union Stockyards, Chicago, in favor of Cordell &
Dunnica.
4. Upon the presentation of the draft to Hall Bros. & Co., they refused to pay it, and the
same was protested for nonpayment.
5. The agreement in question, having been made in Missouri, and not having been reduced
to writing, was invalid under the statutes of that state, and could not be recognized in
Illinois as the basis of an action there against the defendants.
Issue: W/N the contract was to be governed by the laws of Missouri

Held: No
Ratio:
1. No. The contract should be governed by the place of performance, Illinois, and not by the
law of the place where the contract was made.
2. The contention of the plaintiffs is that the rights of the parties are to be determined by the
law of the place where the alleged agreement was made.
 If this be so, it may be that the judgment could not be sustained; for the statute of
Missouri expressly declares that no person within that state shall be charged as
an acceptor of a bill of exchange unless his acceptance be in writing.
 The statute, as construed by the highest court of Missouri, equally embraces
within its inhibitions an action upon a parol promise to accept a bill, except as
provided in another section.
3. If the law of Missouri governs, this action could not be maintained under that section,
because, as held in Flato v. Mulhall, the plaintiffs, being the payees in the bill drawn by
Farlow upon Hall Bros. & Co., could not, within the meaning of the statute, be said to
have "negotiated" it.
4. We are however of opinion that upon principle and authority, the rights of the parties are
not to be determined by the law of Missouri.
 The statute of that state can have no application to an action brought to charge
a person in Illinois upon a parol promise to accept and pay a bill of
exchange payable in Illinois.
 The agreement to accept and pay, or to pay upon presentation, was to be
entirely performed in Illinois, which was the state of the residence and place of
business of the defendants. They were not bound to accept or pay elsewhere
that at the place to which, by the terms of the agreement, the stock was to be
shipped.
5. Nothing in the case shows that the parties had in view, in respect to the execution of the
contract, any other law than the law of the place of performance. That law consequently
must determine the rights of the parties.
Mutual Life Ins. Co. v. Hill
48 L. Ed. 788
Doctrine: The laws of the Place of contract will apply. Exception is when there is an agreement
by the parties to the contrary - that laws of another place/state will apply. In such case they can
select particular laws or limit its application. Exception to the Exceptions is where there are two
clauses in any respect conflicting, that which is specially directed to a particular matter controls in
respect thereto over one which is general in its terms although within its general terms the
particular may be included.
Facts:
1. Hill, at Seattle, Washington, signed a written application to the Mutual Life Insurance
Company of New York for a policy.
2. The insurance company accepted the application, executed a policy, and forwarded it to
its local agent at Seattle, who there received the first premium and delivered the policy to
Hill. The beneficiary named in the policy was Ellen K. Hill, the wife. Wife however died
first. They have four children, the present defendants in error
3. A premium receipt for the second annual premium was, in 1887, forwarded to the local
agent at Seattle, presented by him to Hill, and not paid. No subsequent premiums were
paid, and on December 4, 1890, Hill died.
4. This action was commenced in the circuit court of the United States for the district of
Washington. The contention of the plaintiffs is that, although the annual premiums for
1887, 1888, 1889, and 1890 had not been paid, the insurance company was
nevertheless indebted to them for the full amount of the policy and interest, by reason of
the fact that it had failed to give the notice of forfeiture prescribed by laws of the state of
New York. The heirs said that New York Laws (not Washington – place of contract-
Laws) applies and that the former requires notice first before insurer can be in default.
5. The defendant relied upon the nonpayment of the premiums other than the first, and an
abandonment of the contract.
Issue: W/N New York laws, where the Insurance company is located, and not Washington Laws,
the place of contract, will apply.
Held: No
Ratio:
1. General Rule is that Washington was the place of the contract thus, the laws of that state
control its terms and obligations. The statutory provision of the state of New York in
reference to forfeitures has no extraterritorial effect, and does not of itself apply to
contracts made by a New York company outside of that state.
2) Parties contracting outside of the state of New York may, by agreement, incorporate into
the contract the laws of that state and make its provisions controlling upon both parties,
provided such provisions do not conflict, with the law or public policy of the state in which
the contract is made. Such a stipulation, it is insisted, is found in this contract.
3) In determining the effect of such a stipulation it must be borne in mind that the
applicability of other laws than those of the state of the place of contract is a matter of
agreement, and that the agreement may select laws and also limit the extent of their
applicability.
4) It is stated in the application that the contract of insurance is to 'be held and construed at
all times and places to have been made in the city of New York.' It might with some
plausibility be contended that this general provision is limited to the matter which
precedes it in the same sentence, to wit, the 'declarations, agreements, and warranties
herein contained.' This contention is reinforced by the fact that elsewhere in the contract
there is special mention of one statute of New York, which is made controlling in
reference to a single matter.
5) But assuming that the general declaration that the contract is to be held and construed to
have been made in the city of New York would, if there was nothing else, make
controlling all the applicable statutes of that state, it is limited by other express
agreements of the policy, Among these are that 'notice that each and every such
payment is due at the date named in the policy is given and accepted by the delivery and
acceptance of this policy, and any further notice required by any statute is thereby
expressly waived, 'policyholders must not expect to be notified when their premiums will
be due. It is a practice of the company to send these notices, as reminders when the
address is known, but no responsibility is assumed on the part of the company in
consequence of their non-reception.
6) Where there are two clauses in any respect conflicting, that which is specially directed to
a particular controls in respect thereto over one which is general in its terms, although
within its general terms the particular may be included. Because, when the parties
express themselves in reference to a particular matter, the attention is directed to that,
and it must be assumed that it expresses their intent; whereas a reference to some
general matter, within which the particular may be included, does not necessarily indicate
that the parties had the particular matter in thought.
7) In this case, when the parties stipulate that no other notice shall be required, attention is
directed to the particular matter of notice. When the stipulation is that the contract shall
be construed to have been made in New York, no particular statute is referred to, and the
attention may not be directed to the matter of notice or any other special feature of New
York law.
Lewisohn v. Steamship Co.
56 Fed.. 602
Facts:
1. The shipper sued the owner to recover for the subject injuries, which occurred while the
hair was being transported from England to New York. The evidence showed that the hair
was damaged on the voyage by the gas and odor from barrels of ale over which the hair
was stowed onboard the steamer. The subject bill of lading exempted the steamer from
liability for damage caused by negligence. It also contained a clause providing that in
accepting the bill of lading, the shipper agreed that the contract was to be governed by
the law of the flag of the ship carrying the goods after delivery to the ship which law was
England.
2. By the law of England, such provision in a bill of lading relieved the shipowner from the
liability sued for. Provisions exempting carriers from damage caused by negligence were
void and unenforceable in the United States.
Issue: Whether the bill of lading could validly exempt the steamer from liability. In other words
what law applies, the law of England or the law of the United States
Held: The law of the United States
Ratio:
1) It has been established by the Court that a provision which exempts the carrier from
damage caused by negligence is void, and will not be enforced, because contrary to
public policy; and that the principle laid down by the supreme court in Oscanyan v. Arms
Co., 103 U.S. 261, requires this court to decline to enforce such a provision in this bill of
lading, notwithstanding the bill of lading was lawful by the law of the place where the
goods were shipped. Stipulations held void because against the public policy of the
United States are not made valid by the stipulations of the parties.
Dimpfel v. Wilson
6 Atl. 561
Facts:
1. Dimpfel was a resident of Atlanta and was married to Sherman. Sherman obtained a
divorce in New York which dissolved his marriage with Dimpfel and prohibited the latter
from re-marrying during the lifetime of Sherman. Under such decree however Dimpfel
was not prohibited from re-marrying in another state.
2. Dimpfel contracted a marriage in the District of Columbia while Sherman, his former wife,
was still living.
3. When the second marriage was entered into, an Act of Congress was in effect and which
provided that if a marriage was contracted while either party thereto had a former wife or
husband living, unless the former marriage shall have been dissolved and no restraint
shall have been imposed upon the party contracting such second marriage, then there is
a valid ground for divorce.
Issue: W/N the second marriage is valid
Held: Yes
Ratio:
1. Dimpfel's second marriage was not void but only voidable upon a divorce, and that the
issue of that marriage is legitimate, unless the construction placed in the District of
Columbia upon the Act of Congress be to the effect that the restraint imposed by the
decree of the New York Court operated in the District of Columbia to render the re-
marriage there null and void.
2. The General rule is that such a prohibition as the New York Statue has no extra-territorial
effect. What should properly govern us in this case is the law of the District, when the
marriage took place, and the construction placed upon the statute of New York, where
the decree was passed.
3. The Act of Congress provides not for a decree of nullity but as a ground for divorce, that
when "such marriage was contracted while either of the parties thereto had a former wife
or husband living, unless the former marriage shall have been lawfully dissolved, and no
restraint shall have been imposed upon the party contracting such second marriage. It is
one thing to prohibit a marriage and declare it null and void if made under certain
conditions, and quite another to authorize a divorce-- thereby making it voidable only and
not ab initio void.
4. A distinction must be made between the marriage of a person, who has been previously
married, and who has not been divorced from a spouse who is still living, and that of one
who has been divorced but was prohibited by a decree from re- marrying--the one case
would be clearly polygamous, while the other would not be under the general rule, if the
second marriage occurred outside of the State where the decree was passed.
5. Although the decree did not on its face so limit the restriction, it was passed after the
Court of Appeals of that State had construed the statute not to apply to a marriage
outside of the State.
Lanham v. Lanham
117 N.W. 787
Doctrines:
1. A marriage valid where it is celebrated is valid everywhere. To this rule, however, there
are two general exceptions which are equally well recognized, namely (1) marriages
which are deemed contrary to the law of nature as generally recognized by Christian
civilized states; and (2) marriages which the lawmaking power of the forum has declared
shall not be allowed validity on grounds of public policy.
2. A state undoubtedly has the power to declare what marriages between its own citizens
shall not be recognized as valid in its courts, and it also has the power to declare that
marriages between its own citizens contrary to its established public policy shall have no
validity in its courts, even though they be celebrated in other states under whose laws
they would ordinarily be valid. In this sense, at least, it has power to give extraterritorial
effect to its laws. The intention to give such effect must, however, be quite clear.
Facts:
1. On and prior to the 15th day of September, 1905, the plaintiff was a resident of this state
and was the wife of one J. R. Sherman. On the day named she obtained a judgment of
divorce from Mr. Sherman for the purpose of marrying the deceased, who was then a
resident of Wisconsin and a man eighty-four years of age.
2. After the divorce both parties learned that the law of Wisconsin prohibited the plaintiff
from marrying again until the expiration of one year from the divorce. For the purpose of
avoiding the effect of the law they went to Menominee, Michigan, October 10, 1905, and
were there married by a justice of the peace, and returned to Wisconsin on the following
day.
3. They immediately assumed the relations of husband and wife and lived and cohabited
together in Monroe county (Wisconsin) until Lanham's death March 13, 1907.
4. On March 8, 1907, the plaintiff made application to the county judge of Monroe county for
a permit to marry Lanham, but he was then very ill and no ceremony was ever performed.
5. The circuit court concluded that there was a valid common-law marriage between the
parties, resulting from their living and cohabiting together as man and wife after the
expiration of one year from the date of the decree of divorce, and held that the plaintiff
was the lawful widow of the deceased and entitled to an allowance as such.
6. Appellant heirs sought review of the order of the Circuit Court for Monroe County
(Wisconsin), which reversed a county court and granted an application by respondent
wife for an allowance for her support out of the estate of the heir's decedent.
Issue: W/N the marriage in Michigan may be recognized in Wisconsin?
Held: Judgment reversed, and action remanded to the circuit court with directions to affirm the
judgment of the county court.
Ratio
1. The Law in Wisconsin says that “It shall not be lawful for any person divorced from the
bonds of matrimony by any court of this state to marry again within one year from the
date of the entry of such judgment or decree and the marriage of any divorced person
solemnized within one year from the date of the entry of any such judgment or decree of
divorce shall be null and void.”
a. A proviso to the section authorizes the circuit judge to grant permission to the
divorced parties to remarry within the year, but this is of no moment here. The
first question is whether the Michigan marriage was valid notwithstanding the
provisions of this law.
2. The general rule of law unquestionably is that a marriage valid where it is celebrated is
valid everywhere.
3. To this rule, however, there are two general exceptions which are equally well
recognized, namely:
a. Marriages which are deemed contrary to the law of nature as generally
recognized by Christian civilized states; and
b. Marriages which the lawmaking power of the forum has declared shall not be
allowed validity on grounds of public policy.
4. The first of these exceptions covers polygamous and incestuous marriages and has no
application here, and the question presented is whether the case comes within the
second exception.
5. A state undoubtedly has the power to declare what marriages between its own citizens
shall not be recognized as valid in its courts, and it also has the power to declare that
marriages between its own citizens contrary to its established public policy shall have no
validity in its courts, even though they be celebrated in other states under whose laws
they would ordinarily be valid.
a. In this sense, at least, it has power to give extraterritorial effect to its laws. The
intention to give such effect must, however, be quite clear. So the question must
be, in the present case, whether our legislature by the act quoted declared a
public policy and clearly indicated the intention that the law was to apply to its
citizens wherever they may be at the time of their marriage.
6. To our minds there can be no doubt that the law was intended to express a public policy.
a. `There have been many laws in other states providing that the guilty party in a
divorce action shall not remarry for a term of years, or for life, and these laws
impose a penalty local only in its effect. Under this construction the remarriage of
such guilty party in another state has generally been held valid notwithstanding
the prohibition of the local statute.
b. It is very clear, however, that the statute under consideration is in no sense a
penal law. It imposes a restriction upon the remarriage of both parties, whether
innocent or guilty. Upon no reasonable ground can this general restriction be
explained except upon the ground that the legislature deemed that it was against
public policy and good morals that divorced persons should be at liberty to
immediately contract new marriages.
c. In a word, the intent of the law plainly is to remove one of the most frequent
inducing causes for the bringing of divorce actions (the desire on the part of one
of the parties to marry another). This means a declaration of public policy or it
means nothing. It means that the legislature regarded frequent and easy divorce
as against good morals, and that it proposed, not to punish the guilty party, but to
remove an inducement to frequent divorce.
7. To say that the legislature intended such a law to apply only while the parties are within
the boundaries of the state, and that it contemplated that by crossing the state line its
citizens could successfully nullify its terms, is to make the act essentially useless and
impotent and ascribe practical imbecility to the lawmaking power.
8. The Michigan marriage being held void, the question recurs whether the finding that there
was a common-law marriage, resulting from the fact that the parties lived and cohabited
together as man and wife for about six months, can be sustained. This must be answered
in the negative. This court has held that, where cohabitation is illegal in its inception, the
relation between the parties will not be transformed into marriage by evidence of
continued cohabitation, or by any evidence which falls short of establishing either directly
or circumstantially the fact of an actual contract of marriage after the bar has been
removed.
Pennegar v. State
10 S.W. 305
Doctrine: A marriage, when celebrated in another jurisdiction, shall be valid and subsisting in any
jurisdiction outside of the place where it was celebrated, except if prohibited pursuant to a
declared public policy.
Facts:
1. E.U. Hovey and John Hovey are spouses. John obtained a divorce decree against E.U. on
the ground of E.U.’s act of adultery with Pennegar.
2. E.U. and William shortly, after the divorce, went to Alabama where they were married to each
other, and on the next day after their marriage, returned to Tennessee, where they are
cohabiting openly as man and wife.
Issue: Whether the marriage of E.U. and William are recognized in the state of Tennessee.
Held: No, the marriage is not recognized.
Ratio:
1. It is a rule of universal recognition in all civilized countries that in general, a marriage valid
where celebrated is valid everywhere.
a. However, these are subject to two exceptions: (1) marriages which are deemed contrary
to the law of nature, as generally recognized in Christian countries (such as incest and
polygamy), and (2) marriages which the local law making power has declared shall not be
allowed any validity, either in express terms or by necessary implication.
2. The second exception has two branches. The first branch is where the statutory prohibition
relates to form, ceremony, and qualification, it is held that compliance with the law of the
place of marriage is sufficient, and its validity will be recognized, even if they left their
domicile and marry in another state for the purpose of evading their law of domicile. This
branch is more of an exception to the exception.
3. The second branch belong cases which are prohibited by statute as affecting the morals or
good order of society. If the statutory prohibition is expressive of a decided state policy as a
matter of morals, the courts must adjudge the subsequent marriage void.
4. The second branch applies to the case at bar. The statute of Tennessee is expressive of a
decided state policy not to permit the sensibilities of the innocent and injured husband or wife,
who has been driven by the adultery of his spouse to the necessity of obtaining a divorce, to
be wounded, nor the public decency to be affronted, by being forced to witness the continued
cohabitation of the adulterous pair, even under the guise of marriage. It is believed that the
moral sense of the community is shocked and outraged by such an exhibition, hence, the
shield behind the general rule of the law of marriage should be pierced.
Johnson v. Jonson
106 Pac. 500
Doctrine: Where a marriage is prohibited either by the statute or by those rules of morality and
decency which make it against the natural law of civilized nations for two persons to marry, as
incestuous or polygamous marriages, it is vain for them to go beyond their domicile to engage in
a contract of marriage for the purpose of avoiding the prohibition.
Facts:
1. The parties were married on May 2, 1905, in Victoria. Plaintiff and defendant are first blood
cousins; their mothers were sisters.
2. The parties were domiciled in Seattle, Washington. To avoid the law of the state prohibiting
said marriage they went to Victoria and married there. They returned to Seattle afterwards
and maintained it as their place of domicile.
3. An annulment was filed in Seattle, however, the trial court denied the annulment.
4. Section 1791 of Pierce’s Code and Section 4468 of Ballinger Ann Code provides: Code, SS
7151, declares that:
5. “Marriages in the following cases are prohibited: . . .
(2) When the parties thereto are nearer of kin to each other than second cousins,
whether of the whole or half-blood, computing by the rules of the civil law;
(3) and if any person being within the degrees of consanguinity or affinity in which
marriages are prohibited by this section carnally know each other, they shall be deemed
guilty of incest, and shall be punished by imprisonment in the state penitentiary for a term
not exceeding ten years and not less than one year.”
Issue: W/N the marriage should be annulled.
Held: Yes
Ratio:
1. The marriage should be annulled. The general rule is that the lex loci contractus is
controlling in adjudications involving the validity of marriages. Such doctrine has an
exception, as seen in the case at bar. “Marriages between parties so nearly related are
prohibited in nearly all civilized countries, and if argument in support of such a policy is
needed, the fact that the only offspring of this marriage is deaf and dumb supplies it. The
marriage being void, it was the duty of the trial court to declare it so, and the judgment is
reversed, with directions to annul the marriage, and for further proceedings not
inconsistent with this opinion.
2. Where a marriage is prohibited either by the statute or by those rules of morality and
decency which make it against the natural law of civilized nations for two persons to
marry, as incestuous or polygamous marriages, it is vain for them to go beyond their
domicile to engage in a contract of marriage for the purpose of avoiding the prohibition.
Their contract will be held void upon their return.
Garcia v. Garcia
127 N.W. 586
Doctrine: A marriage which was validly celebrated in one state is held to be valid in other states.
Facts:
1. Eloise Garcia is a resident of South Dakota. According to her, she married Emanuel
Garcia at Los Angeles, California.
2. She alleged that she and her husband were actually whole cousins, since her father and
her husband’s mother were siblings of full blood.
3. The said marriage was and is incestuous and void under section 38, Civil Code of the
state of South Dakota (Revised Code of South Dakota, 1903), and prohibited under
section 350, Penal Code of the state of South Dakota.
4. Eloise thus prayed to have the marriage be declared null and void.
5. Emanuel filed for demurrer on the ground that the court has not jurisdiction over his
person or over the subject matter, and that the complaint did not state facts sufficient to
constitute a cause of action.
6. Judgment was entered in favor of Emanuel since Eloise failed to amend her complaint.
Issue: W/N a marriage celebrated as valid in one state may be nullified in the state where it is
considered void
Held: No
Ratio:
1. The court was clearly without jurisdiction to annul the marriage so conceded to be legal
and valid in the state of California where it took place.
2. It will be observed by the complaint that it is not alleged therein that the contract of
marriage was legal at the time it was solemnized in the state of California by the laws of
that state, and that the law of California relating to the subject of marriage is not set out in
the complaint.
o But it is conceded by counsel for the respective parties that the marriage was
valid at the time it was solemnized in the state of California under the laws of that
state, and no question in the briefs of counsel is raised as to that point. We will
therefore assume for the purposes of the decision in this case that the marriage
between the parties was at the time of its solemnization valid and legal in the
state of California.
3. The Court cited the case of Medway v. Needham which states
o Now, it is a principle adopted for general convenience and security that a
marriage which is good according to the laws of the country where it is entered
into shall be valid in any other country. And this principle is considered so
essential that, even when it appears that the parties went into another state to
evade the laws of their own country, the marriage in the foreign state shall
nevertheless be valid in the country where the parties live. *** The law now in
force in this state not only prohibits the marriage of negroes and mulattoes with
white persons, but expressly declares such marriages to be void. But they are
only void if contracted within this state in violation of its laws. If the marriage
takes place in a state whose laws allow it, the marriage is certainly good there;
and it would produce greater inconveniences than those attempted to be guarded
against if a contract of this solemn nature, valid in a neighboring state, could be
dissolved at the will of either of the parties by stepping over the line of a state
which might prohibit such marriages.”
4. The marriage therefore being valid in the state where it was contracted, is to be regarded
as valid in this state, and fully supports the decision of the court in sustaining the
demurrer to the complaint in this action.
State v. Fenn
92 Pac. 417
Doctrine: The power of the state to declare void marriages contracted beyond its borders does
not apply to marriages contracted in other states by citizens of other states
Facts:
1. An Information was filed against Elizabeth Fenn in the court of Washington accusing her
of the crime of bigamy.
2. She was lawfully divorced from Edward Hodges in the court of Washington on February
1901.
3. Within 10 days after obtaining such divorce she married Joseph Clark in Victoria, British
Columbia and continued to cohabit with him until the month of January 1907. Such being
a valid marriage according to the laws of British Columbia.
4. Now the alleged bigamous marriage was contracted with Arthur Fenn in the state of
Washington on Jan. 16, 1907, within a few years after her marriage with Clark.
Issue: W/N Fenn committed Bigamy
Held: Yes
Ratio:
1. Marriage valid where contracted is valid everywhere.
a. Exceptions include: (1) incestuous and polygamous marriages prohibited by
natural law; and (2) marriages prohibited by positive law.
i. Victoria marriage now under consideration may fall within the second
exception.
2. A state has the power to declare void marriages contracted beyond its borders, at least
where such marriages are contracted by its own citizens in violation of its laws.
3. A state law regulating marriage may and does have an extraterritorial effect when the
legislature so intends, at least where the parties to the marriage have their domicile within
the state
a. Also, all marriages contracted within the state, and all marriages contracted
without the state by persons domiciled here, for the purpose of evading our laws,
should be null and void.
4. The validity of a marriage is determined by reference to the law of the place where
contracted.
a. Exception is sometimes made in favor of the law of the domicile of the parties.
5. Whenever a divorce is granted by Washington courts neither party shall be capable of
marrying a third person until the expiration of certain periods, and that all marriages
contracted in violation of the section, whether “within or without the state,” shall be void.
a. This law, though invalidating a remarriage in Washington within the prohibitory
period of persons divorced in that state and marriages in other states and
countries of persons divorced and domiciled in Washington made to evade her
laws, the parties intending to return to Washington, did not invalidate a foreign
marriage within the prohibited period of a woman divorced in Washington, if she
was domiciled in good faith in the country where the marriage occurred at the
time it was performed.
6. Thus, in this case, the British Columbia marriage was valid because if the parties were
domiciled in British Columbia at the time of the marriage the marriage did not fall within
the prohibition of the statute.
Bronson vs. Lumber Co.
46. N.W. 570
Facts:
1. This is an action filed by Bronson to recover from the St. Croix Lumber Company a
quantity of logs or the value of the same which the aforesaid corporation had cut in the
winter of 1882-183 from land in the state of Wisconsin, and which it had brought down
the tributaries of the river St. Croix into Lake St. Croix.
2. The title of the logs was in issue and said title depended upon the title to the lands from
which they had been cut.
3. The title of the lands is conceded to have been in the plaintiffs, unless it had been
divested by tax proceedings through which title is claimed to have become vested to the
intervenor, Wing, under whose authority the timber was cute and converted into logs.
4. At the trial, the defendants relied upon certain tax-deeds, executed to the intervenor,
Wing, as proof of the divestiture of the plaintiff’s title.
5. It was admitted that the plaintiffs had not paid taxes for the year 1874, for which it is
claimed that the land was sold, and that they had never redeemed the land form any tax-
sale.
6. It is to be taken as a fact from the admissions of the parties that the lands have always
been vacant and unoccupied.
7. It was stipulated for the purpose of the trial that the court should take judicial notice of the
statutes of Wisconsin.
8. The defendants made no proof of tax proceedings affecting this land other than the tax-
deeds, and the recording of the same more than three years prior to the cutting of the
timber in question. The trial court held this to be insufficient to show that the plaintiffs’
original title had been divested, and judgment was rendered for the plaintiffs.
9. On appeal, the issue is the effect of the recorded tax deed of 1878, as evidence in this
action, as to the title of the lands in Wisconsin.
10. Respondent contends that the statutory limitation and the declared conclusive effect of
the tax deed, are by the terms of the law, not operative or of any effect unless it be shown
affirmatively and otherwise than by the tax-deed, that the land had been sold for taxes, it
being conceded that if this were shown, the law of Wisconsin would be applicable as a
rule of property to determine the effect of the recorded deed; that the statute making the
tax deed conclusive evidence, is unconstitutional, if in fact no tax had been levied, and
that preliminary proof of taxation must be made before any such effect can be given to
the deed; and that, at most, the statute was but a rule of evidence having no force in this
state.
Issue: Whether the law of Wisconsin is applicable as regards the effect of the recorded tax deed
of 1878, as evidence in this action, as to the title of the lands in Wisconsin.
Held/Ratio:
1. A tax deed of lands in Wisconsin is conclusive evidence of title in the grantee, after the
lapse of the statutory period of limitations; the land being unoccupied, but constructively
in the possession of the grantee in the tax deed.
2. Chapter 138, § 5, Laws 1861 provided that “no action should be commenced by the
former owner or owners of any lands, or by any person claiming under him or them, to
recover possession of land which has been sold and conveyed by deed for non–payment
of taxes, or to avoid such deed, unless such action shall be commenced within three
years next after the recording of such deed.”
3. The following provision was added to the above statute: “But, whenever any such action
shall be commenced after the expiration of three years from the date of recording such
deed, such deed, if executed substantially in form prescribed by law for the execution of
tax–deeds, shall be conclusive evidence of the existence and legality of all proceedings
from and including the assessment of the property for taxation up to and including the
execution of such deed.”
4. It will be necessary for us to declare what we might deem to be the proper construction
and effect of the statutes of Wisconsin, for the reason that the Supreme Court of that
state has by its decisions, authoritatively and finally declared the law affecting and
determining the title to this land.
5. It has been decided with reference to the statutes like those in question, or so nearly the
same that the decisions must be regarded as controlling this case, that the grantee in a
recorded tax deed which is valid on its face, is to be deemed constructively in the
possession of the land, if it be in fact vacant and unoccupied.
6. If the original owner neglects to sue until the prescribed period of limitation shall have
expired, he is barred by the statue; and that the title vests absolutely in the party in
whose favor the limitation has thus been perfected, all questions of the validity of the
proceedings, whether going to the groundwork of the tax, or in the nature of mere
irregularities, being thenceforth set at rest, excepting, perhaps, as to the taxability of the
land and the jurisdiction of the officers to the institute and carry on tax proceedings, and
perhaps, also as to the fact of the tax having been paid, or the land redeemed therefrom;
and that, although the statutes refer to deeds for lands as “sold for taxes,” the deed itself
becomes, under such statutes as that above recited, conclusive evidence to the extent
above indicates, without proof of the preliminary proceeding.
7. The law of Wisconsin giving such conclusive effect to the tax deed, after the expiration of
the statutory limitation, is not merely a rule of evidence which is no effect elsewhere, but
rather a law of property, and we must so regard it when, as in this case, an issue arises
respecting the title to the land in Wisconsin.
Cochran v. Benton
25 N.E. 870
Doctrine: Subject to certain qualifications, the lex situs regulates all transfers of land, in every
point which constitutes the conveyance. The capacity to devise lands, or to be a devisee thereof,
or to transfer them inter vivos by conveyance or mortgage, will be controlled by the lex situs of the
realty. So also the forms and solemnities required by the lex situs for valid conveyances or
devises of land, or for powers of attorney to convey the same, must be followed. Compliance with
the law of the party’s domicile or of the place where the instrument is executed will not suffice.
Post v. Bank
28 N.E. 978
Doctrine: A mortgage of land in Illinois, invalid in Texas, where it was executed, will be enforced
in Illinois, if valid under its laws.
Facts:
1. This is a bill in chancery exhibited by appellee against appellant and her husband, to
correct a mistake in and to foreclose a mortgage.
2. The note purported to be secured by the mortgage is that of appellant’s husband, only for
the payment of which she is not otherwise liable than she may have become so by the
execution of the mortgage.
3. The mortgage was executed in Texas and pertains to land in Illinois. She contends that
Texas law is governing. That is, she cannot make a valid mortgage to secure her
husband’s note and to have executed any valid mortgage as a married woman without
her husband’s acknowledgement.
4. The Illinois court held that Illinois law will govern, where no such disability attaches to the
wife.
Issue: W/N Texas law applies.
Held: No
Ratio:
1. A mortgage of land in Illinois, invalid in Texas, where it was executed, will be enforced in
Illinois, if valid under its laws.
2. The mortgage, having been acknowledged in conformity with the law of Illinois, is
admissible in Illinois courts, and the uncorroborated evidence of the mortgagor that she
did not have knowledge that the mortgage in the manner recited is not sufficient to
overcome evidence presented against her.
Hauensten v. Lynham
100 U.S. 490
Doctrine: It must always be borne in mind that the Constitution, laws, and treaties of the United
States are as much a part of the law of every State as its own local laws and Constitution. This is
a fundamental principle in our (US) system of complex national polity
Facts:
1. Solomon Hauenstein, a citizen of Switzerland, died in the city of Richmond, Virginia, USA
in the year 1861 or 1862, intestate, unmarried, and without children. At that time, he
owned and held considerable real estate in the city of Richmond,
2. An inquisition of escheat was prosecuted by the escheator for that district. A verdict and
judgment were rendered in his favor. When the escheator was about to sell the property,
the plaintiffs in error, pursuant to a law of the state of Virginia, filed their petition, setting
forth that they were the heirs-at-law of the deceased, and praying that the proceeds of
the sale of the property should be paid over to them. The plaintiffs are all citizens of
Switzerland.
3. Under Virginia law, aliens could not inherit property through the intestacy statutes.
4. However, under a treaty executed between the United States and the Swiss
Confederation, the following provision is present: "But in case real estate situated within
the territories of one of the contracting parties should fall to a citizen of the other party,
who, on account of his being an alien, could not be permitted to hold such property in the
State or in the canton in which it may be situated, there shall be accorded to the said heir,
or other successor, such term as the laws of the State or canton will permit to sell such
property; he shall be at liberty at all times to withdraw and export the proceeds thereof
without difficulty, and without paying to the government any other charges than those
which, in a similar case, would be paid by an inhabitant of the country in which the real
estate may be situated."
Issue: W/N the treaty between the United States and Switzerland governs
Held: Yes
Ratio:
1. The plaintiffs in error are exactly covered by the treaty. It was clearly the intention of the
clause in question in the treaty of 1850 to secure to the beneficiaries absolutely the right
"to sell said property," and "to withdraw and export the proceeds thereof without
difficulty." Otherwise the language used is a sham and a mockery.
2. It must always be borne in mind that the Constitution, laws, and treaties of the United
States are as much a part of the law of every State as its own local laws and Constitution.
This is a fundamental principle in our system of complex national polity.
3. We have no doubt that this treaty is within the treaty-making power conferred by the
Constitution. And it is our duty to give it full effect.
Peck v. Hibbard
62 Am. Dec. 605
Doctrine: When the maker of a note is regularly discharged as a bankrupt in Canada, under the
laws of that province, so that such discharge would be a good defense to the note there, then
also will it be a good defense to the note in Vermont; and it is immaterial whether the maker was
domiciled in Vermont or Canada at the time of the discharge; and whatever will be a good
defense, by the laws of Canada, where the note was given and payable, will be a good defense
wherever and by whomsoever the note may be prosecuted.
The general rule is equally well settled, that a defense which is good by the law of the place
where the contract was made, or was to be performed, is of equal validity in every other place,
where the claim may be prosecuted, whether it operates between citizens of that country, or
between a citizen and a foreigner, or between foreigners.
A discharge in bankruptcy obtained in a foreign country by a person residing therein from a debt
contracted and payable in such country due to a citizen of one of the United States will bar a
subsequent action on the debt.
A note naming no place of payment must be construed according to the lex loci contractus.
Facts:
1. Defendant executed a promissory note in Montreal, Canada, wherein both defendant-
maker and the payee resided.
2. The note was subsequently indorsed by the payee to various persons, all in the State of
Canada, and during the course of these indorsements, the said note was presented to
and discharged by a Canadian court under proceedings in bankruptcy.
3. However, not shortly thereafter, the same note was transferred to plaintiff, for a valuable
consideration, in the State of Vermont, United States. Plaintiff, a citizen and resident of
Vermont, U.S., was ignorant of any proceedings in bankruptcy that had been
commenced, or that any defense whatever existed to the note.
4. When plaintiff sought to enforce the note against defendant, the latter raised the defense
that his discharge by the court of Montreal, California, is a bar to the suit initiated in the
United States
Issue: W/N the discharge in bankruptcy obtained by the defendant in the Canadian court, in
which state the debt was contracted and is payable, will bar a subsequent action on the debt by a
United States resident
Held: Yes. The general rule is that a defense which is good by the law of the place where the
contract was made, or was to be performed, is of equal validity in every other place, where the
claim may be prosecuted, whether it operates between citizens of that country, or between a
citizen and a foreigner, or between foreigners.
Ratio:
1. A note naming no place of payment must be construed according to the lex loci
contractus.
2. When the maker of a note is regularly discharged as a bankrupt in Canada, under the
laws of that province, so that such discharge would be a good defense to the note there,
then also will it be a good defense to the note in Vermont; and it is immaterial whether the
maker was domiciled in Vermont or Canada at the time of the discharge; and whatever
will be a good defense, by the laws of Canada, where the note was given and payable,
will be a good defense wherever and by whomsoever the note may be prosecuted.
3. In sum, a discharge in bankruptcy obtained in a foreign country by a person residing
therein from a debt contracted and payable in such country due to a citizen of one of the
United States will bar a subsequent action on the debt.
Peck v. Mayo
39 Am. Dec. 605
Doctrine: All the incidents pertaining to the validity and construction, and especially to the
discharge, performance, or satisfaction of contracts, and the rule of damages for a failure to
perform such contract, will be governed by the lex loci contractus.
Facts:
1. This action is upon a promissory note made in Montreal, Canada where the legal rate of
interest is 6% payable at the M & F’s Bank in Albany, New York where the legal rate of
interest is 7% and indorsed in Vermont where the rate of interest is 6%.
2. The note was payable at a day certain but no interest was stipulated in the contract
3. On its due date, the note was not paid
Issue: What is the rate of interest (for damages in not paying the money when due) are the
defendants liable for?
Held: Both the makers and indorsers were liable to pay 7% interest as damages for such
delay.
Ratio:
1. It is an elementary principle, upon this subject, that all the incidents pertaining to the
validity and construction, and especially to the discharge, performance, or satisfaction of
contracts, and the rule of damages for a failure to perform such contract, will be governed
by the lex loci contractus.
2. The elementary principle undoubtedly is that the rate of interest, whether stipulated in the
contract, or given by way of damages for the non-performance, is the interest of the place
of payment.
3. When the contract is entered into in one country, to be performed in another, having
established a lower rate of interest than the former, and the contract stipulates interest
generally, it has always been held that the rate of interest recoverable was that of the
place of performance only.
Young v. Harris
61 Am. Dec. 170
Facts:
1. Keene issued a promissory note and of which Young was assignee or indorsee and
the latter brought this action to recover the amount with interest, etc., against H. C.
Harris, his immediate indorser.
2. The note is dated at Cincinnati (Ohio), and payable nine months after date at the La
Fayette Bank of Cincinnati, to J. M. Tipton.
3. It was written by Young and signed by Keene, in Cincinnati, in the absence of Tipton
the payee, and it remained in the hands of Keene that he might procure good
indorsers in Covington, Kentucky, and then to be delivered to Young in lieu of a note
previously held by him on Keene, his debtor.
4. The note in the hands of Keene was indorsed in blank by Tipton and Harris at
Covington, in Kentucky, and was shortly afterward delivered in Cincinnati to Young,
who may be supposed to have resided in that city.
5. By the law of Ohio, in which state the note is dated and made payable, it is admitted
that such a note is placed on the footing of a bill of exchange, and timely presentation
at the place of payment, and due notice of non-payment, are conditions on which the
liability of the indorser, prima facie, depends. Young, the holder of the note,
considering the liability of the indorser and the mode of fixing it as dependent upon
the law of Kentucky, in which state Harris indorsed his name on the note, prosecuted
the maker to insolvency by suit, and with such diligence as according to the law of
Kentucky would authorize a recovery against the assignor, and did not pursue the
course required by the law of Ohio. Harris maintains that the law of Ohio furnishes
the proper test of diligence, and that, as according to that test, proper diligence has
not been used, he is not liable, and the plaintiff cannot recover.
Issue: Which law shall be applied in this case?
Held: The law of Ohio

1. Where one, for the accommodation of the maker, writes his name on the back of a note
in Kentucky, and it is afterwards delivered to one in Ohio, it is this delivery which
consummates the contract, and the law of Ohio governs it. The liability of an indorser
does not attach until the delivery of the note.
2. The general principle determining the law by which a contract is to be construed is, that
unless the place appointed for its payment be different from that in which it is made, it is
to be governed by the law of the place where it is made, which is the lex loci contractus.
3. The place where a note is endorsed or assigned is the place where the law regards the
contract or assignment to have been made, but the mere indorsing the name at one
place does not amount to a transfer or contract of transfer. If the physical act of writing
the name be at one place, and the delivery at another, the latter is the place of the
contract.
4. If one indorses a note in Kentucky, as an accommodation note, which is subsequently
delivered to one in Ohio, the law of Ohio governs the contract and responsibility of the
indorser.
Brown v. Jones
25 N.E. 452
Doctrine: Commercial papers are governed by the laws where they are payable.
Facts:
1. The action rests upon a bill of exchange drawn by the appellant in favor of himself upon a
form doing business in the city of Chicago, State of Illinois.
2. The bill was drawn on Feb. 11, 1884, and accepted on the same day. It was a 30 day bill.
The acceptance was without qualification, except as to the place of payment.
3. After the acceptance of the bill, it was endorsed to the appellees.
4. It is contended that the copy of the acceptance filed with the complaint limited the time of
payment to 28 days from the date of the bill and hence it was not protested in time, and
therefore the drawer was discharged. It is also contended that the notice of protest was
not mailed by the notary at Chicago within the proper time.
Issue: W/N the notice was mailed within the proper time.
Held: Yes
Ratio:
1. The paper was payable in the State of Illinois, hence was controlled by the statutes of
Illinois relating to commercial paper.
2. By the laws of the State of Illinois, there was a period of 3 days allowed as grace after the
maturity of the bill, and 48 hours thereafter given to the notary in which to mail the notice.
3. In this case, the notice was mailed the next day after the protest, which was in time.
Rathbone v. Coe
50 N.W. 620
Doctrine: Where the statute of the state where the contract was made extinguishes the debt
itself, instead of merely affecting the remedy, and the parties have resided there during the period
of limitation, it is a good defense in a foreign jurisdiction
Facts:
1. Two promissory notes were executed by Coe in favor of Rathbone.
2. Both were executed at Milwaukee, Wisconsin, and payable on demand.
a. Coe had resided at Milwaukee continuously from the giving of the note until
sometime in 1885. The action was commenced in 1886.
3. In answer to each cause of action, defendant alleged that the execution and delivery of
the notes at Wisconsin, it being payable on demand, his residence there, and that he
could have been served with process in that state at any time from the giving of the note
until 1884.
4. Appellants contend that Wisconsin’s statute of limitations did not extinguish the debt but
merely affected the remedy; and that even if it did, such was not so pleaded.
5. The Wisconsin statute states:“The following actions must be commenced within the
periods hereinafter prescribed after the cause of action has accrued.” (The period
prescribed is six years)
6. Counsel for appellants further argued that:
a. The general rule is that where the statute of limitations is pleaded the lex fori
governs.
b. This rule applies even though the action was barred in the state where it arose
before the debtor removed therefrom.
c. The only two exceptions are: (1) when the statute where the contract was made
extinguishes the
d. debt, and (2) where the lex fori provides that an action shall not be maintained
where it is barred in the state where it arose.
e. The Wisconsin statute does not extinguish the debt, and there is no statute here
(Dakota) covering
f. the second exception, hence lex fori governs.
Issue: W/N the applicable law is that of Dakota (lex fori) or that of Wisconsin
Held: The law of Wisoncsin
Ratio:
1. The debt of the plaintiffs is barred by the statute of Wisconsin.
a. According to the Supreme Court of Dakota agrees with the counsel for
respondent in saying that where the statute of the state where the contract was
made extinguishes the debt itself, instead of merely 45 affecting the remedy, and
the parties have resided there during the period of limitation, it is a good defense
in foreign jurisdiction.
b. The Wisconsin statute extinguished the debt.
c. The answer of the defendant is sufficient to allow the defendant to prove the
defense, considering that it sufficiently alleged the facts showing that the
Wisconsin statute was a bar to this action.
Tarbox v. Childs
43 N.E. 124
Doctrine: The law of the place where the contract is to be performed controls relative to the
performance of the parties.
Facts:
1. The defendants contend that the notes given to the plaintiff were Massachusetts
contracts, and that they should be interpreted and have effect according to the law of
Massachusetts.
2. The plaintiff seeks to recover what the defendants agreed to pay him as the price of the
horses sold. The defendants' promise was made in New York, and was to be performed
there. They were bound to make payment in that state, and the question is whether they
have done so. They paid a part in cash, and for the residue they sent, by mail, to the
plaintiff, in New York, their note, made in Massachusetts, and payable on Massachusetts.
3. By the law of Massachusetts, a negotiable note taken for an antecedent debt is deemed
to be a payment, unless there is something to show a contrary intention. The rule in New
York is the other way.
Issue: W/N the notes be interpreted and have effect according to the law of Massachusetts.
Held: No
Ratio:
1. That would be so if a question arose in an action upon the notes or either of them. But
the present action is brought on the original contract and not on either of the notes.
2. The plaintiff in New York was not affected by the rule which prevails in Massachusetts.
The defendants' promise to pay him in that state remained unperformed and
undischarged according to the law of that state. It makes no difference that successive
notes were given. The plaintiff was to be paid there, and he has not yet been paid
according to the law of New York, and is entitled to recover.
Fanning v. Consequa
8 AM. Dec. 442
Facts:
1. The seller, who was located in China, consigned to the buyers several shipments of
goods.
2. The buyers issued promissory notes for the goods and were to resell the goods in New
York and remit the proceeds therefrom to the seller.
3. At least one promissory note was issued to the seller by the buyers' agent.
4. When the buyers failed to make payments on the notes, the seller filed an action to
recover thereon.
5. A master recommended judgment for the seller, and the trial court affirmed that
recommendation, awarding payment to the seller with 12% interest. This, despite the
fact that the law of New York only allows an interest of 7%.
Issue: W/N the trial court erred when it awarded payment to the seller with 12% interest.
Held: Yes
Ratio:
1. Interest is payable according to the laws of the country where the contract is made; but
if, by the terms of nature of the contract, it appears that it is to be executed in another
country, or that the parties had reference to the laws of another country, then the place
in which it was made is, in this respect, immaterial, and it is to be governed by the laws
of the country in which it is to be performed.
2. The court found that the trial court's order charging 12% interest was in error. The court
determined that the interest had to be paid according to the law of the country in which
the debt was contracted. The court, therefore, applied the laws of New York and ordered
the buyers to pay an interest rate of 7%.
Odom v. Security Co
18 S.E. 131
Facts:
1. A promissory note payable in New York City with an interest rate of 8% per annum is
being assailed for being usurious pursuant to a New York statute that limits that the
interest rate to 6% per annum and declared void all contracts which provide for an
interest rate in excess thereof.
2. The note was secured by a deed executed in Georgia and conveying land in Georgia.
The note itself was also executed in Georgia.
3. When the New York Statute was offered to prove that the note was usurious it was
objected to on the ground of it being irrelevant.
Issue: W/N the New York Statute is admissible to prove that the note was usurious and thus void
Held: Yes
Ratio:
1. The general rule is that as to the rate of interest the law of the place of the performance
controls unless the parties intended that the law of some other place should apply and
contracted with reference to the latter.
2. The question if one of fact. The parties to this note seem to have had in view the law of
the state of New York as the one applicable to the payment of interest as well as to the
payment of principal. If they did they must have intended to violate the law for they
stipulated for a rate of interest which it forbids.
3. The pleas of usury in the case are based upon this theory and if in point in fact the parties
contemplated the laws of New York and not the laws of Georgia as governing
performance in respect to the rate of interest, the defense ought to prevail.
4. The plaintiff’s evidence might answer the please by the evidence already in as well as by
more to come in but that would not render the statute of New York inadmissible as
evidence in support of the please.
Matthews v. Paine
46 .W. 463
Doctrine: Whatever of usury there was in the transaction must inhere in it by virtue of the laws of
Tennessee, where the original contract was made, and where, presumably, it was to be
performed. And exercising that comity which exists between courts of the different states, we
adjudicate the rights of the parties precisely as we understand they would be adjudicated if they
were in a court of Tennessee.
Facts:
1. The administratrix of the estate of J. F. Davies, deceased, brought an action against
Mathews on two promissory notes, made at Osceola, in this state, July 12, 1877, for $
627.62 and $ 500, respectively, and due and payable to her intestate on the 1st day of
January, in the years 1878 and 1879, with interest from date at ten per cent per annum.
2. The defendant admitted the execution of the notes, but alleged that:
a. They were given for an alleged balance due Davies on a certain other
promissory note, dated Memphis, Tenn., April 17, 1873, for the sum of $ 3402,
made by J. H. Edrington & Co., of which he was a member, with twelve per cent
interest from date, and payable on the 15th day of November, 1873;
b. That said note was illegal by the laws of the state of Tennessee where it was
made;
c. That the notes sued on and given for said alleged balance were executed in
Arkansas after the adoption of the constitution of 1874;
d. That they included interest at a greater rate than ten per cent per annum, and by
the laws of Arkansas were absolutely void for usury;
e. That he had more than paid said original note with six per cent interest thereon,
and denied that he was indebted to Davies in any sum whatever.
3. The defendant introduced the original note made by J. H. Edrington & Co., with the
indorsements thereon, showing partial payments made at various times and amounting in
the aggregate to $ 3025.42.
4. Blackwood, a witness for him, testified:
a. That he recognized said original note;
b. That some of the credits thereon were in his handwriting;
c. That he made the calculation of interest thereon at the rate of twelve per cent per
annum;
d. That the other credits on the back of said note, except two, are in the handwriting
of J. F. Davies;
e. That the last two credits are in the handwriting of J. W. Clapp, Jr., who was the
bookkeeper of J. H. Edrington & Co.;
f. That at the time the note for $ 3402 was made he was in the employment of J. H.
Edrington & Co., that he knew John Mathews was a member of said firm; and
g. That the words "Paid by new notes July 12, 1877," indorsed across the face of
said original note, are in the handwriting of John Mathews.
5. The defendant then introduced the Statutes of Tennessee, which it was agreed was the
law at the date of the making of said original note.
a. The substance of this legislation is, that six per cent is established as the legal
rate of interest when no other rate is specified, but parties may contract in writing
for the payment of as much as ten per cent per annum.
b. The taking or reservation of more than ten per cent is declared to be usury; but
the effect is not to avoid the contract in toto, but only to forfeit the interest in
excess of six per cent., and to entitle the debtor if he has paid usurious interest to
recover the same by suit, and to subject the usurer to a criminal prosecution.
6. The court found, as a fact, that said two notes sued on were given for the balance due on
the note of J. H. Edrington & Co., and to arrive at the amount of the notes sued on
interest was calculated on said original note at twelve per cent per annum;
7. But, as a question of law, said two notes became an executed contract, and a plea of
usury in defense thereto was bad; and rendered judgment for the plaintiff for the full
amount of the notes sued on.
8. The defendant thereupon filed his motion for a new trial, which was by the court
overruled. The defendant excepted and prayed an appeal to this court.
Issue: W/N the plea of usury is a valid defense?
Held: Affirmed.
Ratio:
1. At the date of the making of the original note, the laws of Arkansas authorized the taking
of any rate of interest for the loan or forbearance of money that the parties might agree
upon.
a. Section 13 of Article 19, Constitution of 1874, avoids all contracts for a higher
rate than ten per centum per annum both as to principal and interest. But the
several notes, which are the foundation of this action, do not violate this
provision.
b. The parties had a settlement in 1877, and found that, computing the interest at
twelve per cent., there remained due of the principal $ 1127.62. For this balance
one of the debtors made his two notes carrying interest until maturity at the rate
of ten per cent and thereafter only six per cent.
2. So that whatever of usury there was in the transaction must inhere in it by virtue of the
laws of Tennessee, where the original contract was made, and where, presumably, it was
to be performed. And exercising that comity which exists between courts of the different
states, we adjudicate the rights of the parties precisely as we understand they would be
adjudicated if they were in a court of Tennessee.
3. The answer avers the payment of usurious interest, and seeks to apply it by way of
payment to the note in suit. But illegal interest actually paid cannot be applied to the
discharge of the principal debt. The statute confers the right of reclamation, and
prescribes the remedy, viz., by suit to recover it back; and that remedy is exclusive. Such
is the construction placed upon analogous provisions contained in the national currency
act of congress, of June 3, 1864.
Bank of the United States v. Lee
10 L. Ed. 81
Doctrine: As against subsequent creditors of the husband, the bona fides of the transfer was not
affected by the facts that he removed from Virginia; that a note given by him after the deed of
trust, and after his removal, was indorsed by one of the trustees in the deed, and secured by a
deed of trust on the same property; and that other portions of the trust property were sold by the
husband without objection from the wife.
Facts:
1. In 1809, R.B.L., then residing in Virginia, for a valuable consideration made a
conveyance in trust for the benefit of his wife, Elizabeth, a certain personal property, and
slaves. A deed of trust was duly recorded according to the laws of Virginia. The property
thus conveyed remained in the possession of the husband and wife while they resided in
Virginia.
2. In 1814, R.B.L. moved to the District of Columbia with his wife and family and brought
with him the slaves and property conveyed in trust for his wife.
3. In 1817, R.B.L. borrowed a sum of money of the Bank of the United States on his
promissory note, endorsed by one of the trustees named in the deed of trust of 1809. At
the time the loan was made, R.B.L. executed a deed of trust of eleven slaves, and among
them were the slaves and the household furniture conveyed by the deed of 1809, to
secure the bank for the amount of the loan.
4. In 1827, R.B.L. died, entirely insolvent.
5. During his residence in Washington, being in reduced circumstances, he sold some of
the slaves, conveyed by the deed of 1809, for the support of his family, without objection
by his wife or her trustees.
6. In 1834, the debt to the bank being unpaid, a bill was filed against Elizabeth, and the
trustees. This is in order to compel the surrender of the remaining slaves and the
household furniture to the trustee for the bank for the sale of the same to satisfy the debt
due to the bank.
Issue: Whether the Deed of trust was effective in accordance with the laws of Virginia.
Held: Yes.
Ratio:
1. As against subsequent creditors of the husband, the bona fides of the transfer was not
affected by the facts that he removed from Virginia; that a note given by him after the
deed of trust, and after his removal, was indorsed by one of the trustees in the deed, and
secured by a deed of trust on the same property; and that other portions of the trust
property were sold by the husband without objection from the wife.
2. The deed was effective according to the laws of Virginia. This is in order to protect the
title against the subsequent creditors or purchasers from R.B.L. The removal of the
spouses into the District of Columbia with the property conveyed to the trustees for the
use of Elizabeth did not affect or impair the validity of the deed of trust.
Green v. Van Buskirk
19 L. Ed. 109
Doctrine: The state which has dominion over property located therein has the right to regulate its
transfer and subject it to process and execution.
Facts:
8. Bates, a resident of New York, owned safes in Illinois on which he gave a chattel
mortgage to secure a debt in favor of Van Burskirk and others.
9. Two days after, Green, also a resident of New York and a creditor of Bates, sued in the
Illinois Court a writ of attachment, caused it to be levied on the sage of Bates, got
judgment in the attachment, and had the safes sold in satisfaction of his debt.
a. At the time of the levy of this attachment, the mortgage had not been recorded in
Illinois nor had possession of the property been delivered under it nor had the
attaching creditor notice of its existence.
10. After the levy of the attachment, Green received notice of the mortgage, and the claim
under it, and Van Buskirk and the others, were informed of the attachment but they did
not make themselves parties to it and contest the right of Green to levy on the safe,
which was authorized under Illinois law.
a. Under Illinois law, any debtor can sue out a writ of attachment against a non-
resident debtor. It is also provided by these law that mortgages of personal
property are void as against 3 rd persons, unless acknowledge and recorded, and
unless the property be delivered to and remain with the mortgagee.
11. Van Buskirk sued Green in the New York Courts for taking and converting the safes, sold
under the attachment.
12. Green pleaded in bar the attachment proceeding in Illinois
13. The New York Court ruled that the New York law was to govern the case and not the law
of Illinois, although the property was situated there.
a. Under New York law, title to the safes passed on execution and delivery of the
mortgage.
14. The Green appealed, arguing that the Illinois judgment had been denied full faith and
credit.
Issue: Whether the proceedings in the Illinois court have effect over the properties located in
Illinois and the parties who are all citizens of New York?
Held: Yes.
Ratio:
5. The New York court is required to recognize that title to the safe was transferred under
the lawful Illinois sale.
6. Illinois had dominion over property located within the state and had the right to regulate
its transfer and subject it to process and execution.
a. Each state has the right to regulate the transfer of property, both personal and
real, within its jurisdiction, and this right exists and may be exercised as to
personal property of non-residents, if within the state, as well as residents.
7. The fiction of law that the domicile of the owner draws too it his personal estate wherever
it may happen to be, yields whenever the actual situs of the property should be
examined.
8. By the laws of Illinois, an attachment on personal property will take precedence of an
unrecorded mortgage executed in another State were record is not necessary, though
owners of the chattels, the attaching creditor, and the mortgage creditor, are all residents
of such other State.
Hervey v. Locomotive Works
93.S. 664
Doctrine: The liability of property to be sold under legal process, issuing from the courts of the
State where it is situated, must be determined by the law there, rather than that of the jurisdiction
where the owner lives.
Facts:
1. The parties entered into a contract wherein Rhode Island Locomotive Works of
Providence, R. I.(first party), owner of a locomotive engine, agreed to lease the said
property to J. Edwin Conant & Co. (second party).
2. The contract contained the following stipulations:
a. First party agrees to lease to the second party the said locomotive engine and
the latter will pay the former for its use
b. Second party promises to keep and maintain the said one locomotive-engine and
tender in as good condition as it now is, reasonable and ordinary wear and tear
excepted
c. First party agrees that if the notes were all paid on time, at the payment of the
last note, it will grant, sell, assign, transfer, and convey to the said party of the
second part the said one locomotive-engine and tender in the condition it then is,
to have and to hold the same to the said party of the second part, its legal
representatives, successors, and assigns
d. That upon default, the second party shall return the property to the first party
e. The first party shall then, after due notice to the other party, sell the engine and
apply the proceeds to the balance, and the second party’s obligation shall be
extinguished
3. The agreement was executed at its place of business, in Rhode Island, by the Rhode
Island Locomotive Works, and in New York by Conant & Co., where they resided.
4. Conant & Co. paid no part of the principal of the purchase-money, except the amount
admitted on the face of the agreement; and that they obtained possession of said engine
and its tender under said agreement, and took it to Illinois.
5. An order of attachment was issued by the court of Illinois, whereby the engine was seized
by the sheriff, and was later on sold to Hervey.
6. The marshal of the United States for the southern district of Illinois took possession of the
engine under a writ of replevin sued out of the Circuit Court of the United States for that
district by the Rhode Island Locomotive Works against Hervey, and the Paris and
Decatur Railroad Company.
7. The court ruled in favor of Hervey.
Issue: W/N the laws of the state where the party resides govern personal properties found in
another state
Held: No
Ratio:
1. The plaintiffs (Rhode Island) contended that it never lost ownership over the engine, and
thus it still had the ability to sell it.
2. The only statutory provisions which relate to cases like this are found in the Statute of
Frauds, and are intended to cover cases in which possession of chattels has been
delivered to one who never had the title, while the ownership remains in another.
3. One party resided in New York, the other in Rhode Island. The construction and effect of
the contract depended on the laws of those States, as it was made there. If they, when
applied to the contract, did not vest the title in Conant & Co., but held them to be mere
bailees, that relation followed them to Illinois, unless some positive provision of local law
changed their status.
4. There was no rule of Illinois law which operated to divest the title of defendant in error. In
fact, the question at issue is one of commercial law. Such contracts are almost universal
in this country.
5. The defendant, residing in Rhode Island, cannot be held guilty of violating the policy of
Illinois, with respect to a mere rule of commercial law. This court, while paying all respect
to State courts as to matters peculiarly within their jurisdiction, will settle the principles of
the common law and of the law of commerce for itself.
6. It was decided by this court, in Green v. Van Buskirk, 5 Wall. 307, 7 id. 139, that the
liability of property to be sold under legal process, issuing from the courts of the State
where it is situated, must be determined by the law there, rather than that of the
jurisdiction where the owner lives. These decisions rest on the ground that every State
has the right to regulate the transfer of property within its limits, and that whoever sends
property to it impliedly submits to the regulations concerning its transfer in force there,
although a different rule of transfer prevails in the jurisdiction where he resides. He has
no absolute right to have the transfer of property, lawful in that jurisdiction, respected in
the courts of the State where it is found, and it is only on a principle of comity that it is
ever allowed. But this principle yields when the laws and policy of the latter State conflict
with those of the former.
7. The policy of the law in Illinois will not permit the owner of personal property to sell it,
either absolutely or conditionally, and still continue in possession of it. Possession is one
of the strongest evidences of title to this class of property, and cannot be rightfully
separated from the title, except in the manner pointed out by statute.
8. The real owner of personal property, who vests another, to whom it is delivered, with an
interest therein, must, if desirous of preserving a lien on it in Illinois, comply with the
requirements of the chattel-mortgage act of that State.
9. Secret liens which treat the vendor of personal property, who has delivered possession of
it to the purchaser, as the owner until the payment of the purchase-money, cannot be
maintained in Illinois. They are held to be constructively fraudulent as to creditors, and
the property, so far as their rights are concerned, is considered as belonging to the
purchaser holding the possession.
10. Nor is the transaction changed by the agreement assuming the form of a lease.
Mumford v. Canty
99 Am. Dec. 525
Dcotrine: General Rule is that the validity of the contract is governed by the law of place where it
is made and the law of place where contract is made. Foreign laws will not be permitted to
contravene the pocourts of that State have held, where possession remains with the mortgagor,
that it is not fraudulent per se, as against creditors, but that it might be shown to be bona fide.
Facts:
1. Action of replevin in City Court of East St. Louis against Canty to recover two mules, a
two-horse wagon and a set of double harness.
2. After trial, the cause was removed to the Circuit Court of St. Clair county by appeal and
resulted in a judgment in favor of appellee.
3. John Knight was a resident and citizen of St. Louis Missouri and that he duly executed
the deed offered in evidence, to secure a bona fide debt which was unpaid at the
commencement of the suit.
4. Knight was indebted to George Pointen, resident of St. Clair County, Illinois for property
which Knight used to haul coal.
5. Pointen sued through City Court of East St. Louis and an attachment over goods of
Knight was issued. The Order was directed to Canty who then levied the same.
6. Property was mortgaged by Knight to Mumford through a deed of trust for the benefit of
Huse, Loomis & Co. This then is to be released upon payment of notes when due and
upon failure to do so, trustee will sell property in St. Louis at public sale for cash & after
notice.
Issue: Whether the Missouri Act or Illinois Act should be followed
Held: The laws of Missouri will govern.
Ratio:
1. The Chattel Mortgage Law of Missouri has similarities with that of Illinois.
a. The slight difference is in the phraseology between the 1st section of Illinois
statute and the 8th section of the Missouri law, the 3d section of Illinois act
declares that possession of the mortgaged property may remain with the
mortgagor, if it is so provided in the conveyance. The Missouri Act states courts
of that State have held, where possession remains with the mortgagor, that it is
not fraudulent per se, as against creditors, but that it might be shown to be bona
fide. (several other provisions were compared)
b. The construction given to Illinois act is different from Missouri Act because
herein, parties may declared that mortgaged property should remain with
mortgagor.
2. General Rule is that the validity of the contract is governed by the law of place where it is
made and the law of place where contract is made.
a. Foreign laws will not be permitted to contravene the pocourts of that State have
held, where possession remains with the mortgagor, that it is not fraudulent per
se, as against creditors, but that it might be shown to be bona fide.
3. The court held that the laws of Missouri were to govern the action because the contract
was made in Missouri and the laws of Missouri did not contravene the positive laws,
institutions or policy, which prohibited such a contract.
Keenan vs. Stimson
20 N.W. 364
Facts:
1. In 1876, Schlotman, residing and having in his possession two horses, in Hardin county,
Iowa, executed two notes, due in six and twelve months, to Mills & Fail, and to secure
the notes duly executed to them a chattel mortgage upon the horses, which was forthwith
filed for record and recorded in Hardin county, pursuant to the laws of Iowa. Schlotman
remained in possession of the horses.
2. Mills & Fail indorsed and transferred the notes secured by mortgage to S.L. Sheldon,
without a formal assignment of the mortgage.
3. In 1878, he moved to Mower Count bringing the horses with him. In said county, he
executed a chattel mortgage on the horses, still in his possession, to B. F. Dow & Co., to
secure a debt which then accrued to them, they having no actual notice of the Iowa
mortgage.
4. B. F. Dow & Co. foreclosed their mortgage by a sale of the property, and the plaintiff
Keenan became the purchaser.
5. The defendant Stimson,, being authorized by Sheldon to do so, took the horses from
Keenan.
6. Keenan brought this action in replevin. Upon a trial with a jury the court directed a verdict
for plaintiff.
Issue: W/N the mortgage executed by Schlotman to Mills & Fail became invalid as to any one by
Schlotman’s change of residence to Mower County.
Held: No
Ratio:
1. By the laws of Iowa no mortgage of personal property, where the mortgagor remains in
possession, is valid against creditors, or subsequent purchasers without notice, unless
the instrument is filed for record with the recorder of the county where the holder of the
property resides, and from the time of the entry by the recorder of the filing for record the
mortgage shall be deemed complete as to third persons, and have the same effect as
though it had been accompanied by the actual delivery of the property.
2. It prescribes no limit as to time during which this effect shall continue. It seems conceded
that it will continue during the life of the mortgage; in that state, 10 years.
3. Until the time that Schlotman, bringing the horses with him, came into this state, the
mortgage to Mills & Fail was, notwithstanding he remained in possession, valid, not only
as against him, but as against third parties, precisely as though it had been accompanied
with an actual change of possession.
4. Had he executed the Dow mortgage before that time it would have been of no avail
against the Mills & Fail mortgage.
5. The general rule is that the validity and effect of contracts relating to personal property
are to be determined by the laws of the state or country where they are made, and, as a
matter of comity, they will, if valid there, be enforced in another state or country, although
not executed or recorded according to the law of the latter.
6. This rule has been applied, in a great number of cases, to chattel mortgages, where the
mortgagor removes with the property into another state, continuing in possession of it,
permissible by the law of the former, under circumstances that, had the mortgage been
executed in the latter state, by one resident therein, would have made it invalid as against
creditors or purchasers.
7. When it is recorded as required by the law of the state where it is executed, it need not,
to preserve its validity, be recorded in the state to which the mortgagor removes with it.
8. The fact that Schlotman remained in possession without the mortgage being filed in the
town in which he acquired a residence after his removal to this state, did not render the
mortgage invalid.
9. The recording in Iowa, as required by the law in that state, was, so far as the validity of
the mortgage was concerned, equivalent to a change in the possession, as filing is in this
state in respect to a mortgage executed by a resident within it.
10. Judgement is reversed and a new trial is ordered.
Jhonson v. Hughes
8 South 147
Doctrine: The mortgage of the claimant, having been duly executed and acknowledged in the
laws of Florida, where it was made, and recorded in that state, is an operative security, though
the property is brought into this state, unless it becomes inoperative by our law.
Facts:
1. This was a statutory claim suit, instituted upon the levy of an attachment upon certain
property supposed to belong to one commander.
2. Upon affidavit and the bond being made, the appllants had an attachment issued against
the said commander, and this attachment was levied on a yoke of oxen and a wagon.
3. After levy, the appellee made an affidavit and gave a bond to interpose a clain on the
property levied on.
4. The instrument or mortgage upon which the claimant relies was duly attested and
acknowledged under the laws of Florida, and its execution is admitted.
5. There was judgment for the claimant, and the plaintiffs appeal, and assign the error the
giving of the charge requested by claimant and refusing to give charge asked by plaintiff.
Issue: W/N a mortgage to which personal property is subject at the time of its removal to the
State, and which has been recorded in the proper county, has a lien superior to the lieu of an
attachment before the mortgage is recorded.
Held: No
Ratio:
1. The mortgage of the claimant, having been duly executed and acknowledged in the laws
of Florida, where it was made, and recorded in that state, is an operative security, though
the property is brought into this state, unless it becomes inoperative by our law.
2. The consequence of an omission to record a mortgage depends upon the terms of the
statute, which makes registration necessary for the protection of creditors and purchases.
Harrison v. Sterry
3 L. Ed. 104
Facts:
1. This was an appeal from a decree of the Circuit Court for the District of South Carolina in a
suit in equity.
2. Richard Harrison was complainant and the following parties defendants: The United States;
Sterry and others, assignees of H. M. Bird and Benjamin Savage under a British commission
of bankruptcy; Aspinwall and others, assignees of Robert Bird, under an American
commission of bankruptcy; several American creditors who had attached the effects of Bird,
Savage & Bird, in South Carolina; several British creditors who had also attached the same
effects.
3. Thomas Parker, who, by consent of the creditors, had been appointed by the court of
common pleas in South Carolina, an agent for all the parties concerned, to collect and
receive the debts due to Bird, Savage & Bird, which had been attach and when received, to
hold the same till the further order of the court.
4. The question was how those attached effects should be distributed.
5. Harrison, the complainant, claimed them as a trustee for the benefit of certain creditors of the
house of Robert Bird & Co., which was the name of the firm by which the house of Bird,
Savage & Bird of London carried on merchandise at New York.
6. Robert Bird, desirous of aiding and supporting the credit of the house of Bird, Savage & Bird,
by raising funds, upon the security of the cargo of the East India ship Semiramis, and certain
debts to a large amount due to them in South Carolina, made a deed of trust on 3 December,
1802, intending thereby to assign that cargo and those debts to the complainant.
7. The deed purported to be signed and sealed by H. M. Bird and Benjamin Savage, by Robert
Bird, their attorney, and by Robert Bird, in his own right. It recited that:
1. "Whereas H. M. Bird, Benjamin Savage and Robert Bird, being co-partners in trade
under the several firms of Bird, Savage & Bird, and Robert Bird & Co. have in
consequence of disappointments been obliged to borrow money from the Bank of
England, and under the firm of Robert Bird & Co. to purchase bills of exchange, public
and bank stocks and goods upon credit in America in order to furnish means of more
effectually supporting the credit of the said Bird, Savage & Bird of London.
2. And whereas it may be necessary for the purpose aforesaid that the said Robert Bird &
Co. should continue to make such purchases until the present difficulties may be
removed, and security having been already given to the persons bound as sureties to the
Bank of England, for their responsibilities, the said H. M. Bird, Benjamin Savage and
Robert Bird, are desirous to secure all persons from whom purchases have been or may
be made as aforesaid, for the purpose of aiding the said house or firm of Bird, Savage &
Bird. Now therefore know ye that the said Henry M. Bird, Benjamin Savage and Robert
Bird, for the purpose above expressed.”
1. The trust expressed was "to apply the same and every part thereof for the equal security and
indemnification, in proportion to their just demands, of all persons from whom the said Robert
Bird & Co. shall have made any such purchases of goods, stocks or bills, or who before that
time shall be holders of any bills of exchange drawn or negotiated by the said Robert Bird &
Co. for the purpose of giving support to the house of Bird, Savage & Bird, as aforesaid.”
2. Another ground of Harrison's claim was a similar instrument of writing, not under seal, but
signed, "Bird, Savage & Bird," and "Robert Bird & Co." which signatures were in the
handwriting of Robert Bird.
3. The bill of complaint stated that Robert Bird & Co., before and after 3 December, 1802, and
before the end of the year 1803, made various purchases of stocks, goods and bills of
exchange, and became indebted for bills drawn and negotiated by them for the purpose of
giving support to the house of Bird, Savage & Bird, which debts remain unpaid.
4. There was a letter of attorney from Henry M. Bird and Benjamin Savage to Robert Bird, but it
did not authorize him to execute deeds in their names generally.
5. The claim of the United States rested upon the priority given by the Act of Congress of 3
March, 1797.
6. The attaching creditors relied upon their attachments under the laws of South Carolina.
7. The assignees under the several commissions of bankruptcy relied upon the British and
American bankrupt laws.
8. The United States had proved its claim under the American commission and had voted in the
choice of assignees. They had also attached the effects in South Carolina under the laws of
that state, and had arrested Robert Bird and held him to bail in New York.
9. The court below decided that the United States was entitled to priority of payment.
9.1. That after satisfaction of that claim Harrison would be entitled, under the assignment, to
Robert Bird's third part or share of the property mentioned in the deed, and the attaching
creditors to the other two-thirds.
9.2. That the assignees under the British commission could take nothing, and that the
assignees under the American commission could take nothing but the surplus after all
the other classes of creditors were satisfied.
10. From this decree all the parties excepting the United States appealed.
Issue: Whether or not the US is preferred amongst the creditors
Held: Yes
Ratio:
1. The Court held that:
3. The words of the act, which entitled the United States to a preference, do not restrain
that privilege to contracts made within the United States, or with American citizens.
4. To authorize this Court to impose that limitation on them, there must be some principle in
the nature of the case, which requires it. The Court fails to see the existence of such
principle.
11. The general rule is that the law of the place where a contract is made is the law of the
contract -- i.e. it is the law by which the contract is expounded.
12. However, the right of priority (of the United States in this case) forms no part of the contract
itself. It is extrinsic, and is rather a personal privilege dependent on the law of the place
where the property lies, and where the court sits which is to decide the cause.
13. In the familiar case of the administration of the estate of a deceased person, the assets are
always distributed according to the dignity of the debt, as regulated by the law of the country
where the representative of the deceased acts, and from which he derives his powers, not by
the law of the country where the contract was made.
14. In this country, and in its courts, in a contest respecting property lying in this country, the
United States is not deprived of that priority which the laws give them by the circumstance
that the contract was made in a foreign country with a person resident abroad.
15. In the distribution of a bankrupt's effects in this country, the United States is entitled to a
preference, although the debt was contracted by a foreigner in a foreign country, and
although the United States had proved its debt under the commission of bankruptcy and had
voted for an assignee.
16. An assignment by one partner, in the name of the co-partnership, of the partnership effects
and credits, is valid.
17. Under a separate commission of bankruptcy against one partner, only his interest in the joint
effects passes.
18. The bankrupt law of a foreign country cannot operate a legal transfer of property in this
country.
Vining v. Miller
67.W. 126
Doctrine: If there are two chattel mortgages executed covering the same personal properties,
with one being executed earlier, the mortgagee in possession of the property itself has priority
over the other mortgagee, despite the fact that the chattel mortgage of the latter was executed
prior to the one of the former.
Facts:
1. Vining et al., Canadian residents, gave Leroy, a resident of Illinois (USA), $1,600, and as
security for the loan, Leroy executed a chattel mortgage covering a one-half interest in
three horses, which interest was then owned by Leroy. The other ½ interest in two of the
horses was owned by Vining et al., and the third horse by another person not a party to
the suit. The chattel mortgage was executed in Detroit, Michigan, USA.
2. Vining et al. and Leroy, at or about the execution of the mortgage, agreed that these
horses should be raced on joint account during the winter of 1892 and the racing season
of 1893, the winter racing to be in the Southern United States; the plaintiff Vining to
manage the horses, making all contracts and entries, collecting the moneys, and doing all
the business, Leroy to do the driving, and the money for expenses to be furnished by
Vining et al., the profits and losses of the racing to be equally shared among the three
horses. This arrangement was not to affect the property rights of the several parties in the
horses.
3. After racing the horses in the US through the winter and spring, they were shipped back
from the US to Canada, on May 4, 1893, and passed through Detroit, USA in transit to
Canada, where they arrived on May 8th. In order to get them into Canada, the plaintiff
Vining gave a bond in the sum of $10,000, conditioned to return the horses to the US
within 70 days.
4. The horses were raced at various places in Canada. The plaintiff Ferguson attended at
these races, and instructed Leroy to ship the horses on July 10th to Detroit, where they
were next to race, and left him to do so. Instead of shipping the horses, Leroy
disappeared; and, the plaintiffs learning from one Stilson, the assistant driver, who was in
their employ, that Leroy had disappeared. Plaintiff Ferguson went to Toronto, the last leg
of the Canada races, and on July 15th (the period within which the horses were to be
returned according to the condition of the bond being nearly up), shipped them back to
Detroit, USA, where plaintiff Vining took charge of them.
5. It appears that the horses, before coming to Toronto, were in Tilsonburg, Canada, which
is about 100 miles from Toronto. Leroy had gone ahead to Toronto, and there met the
defendant Millar on June 30th, and represented to him that he had these horses at
Tilsonburg, and wanted to get them down to Toronto for the races, and wanted to borrow
from Millar money to pay to bring and to keep them in Toronto during the races. Millar
gave him some money then, and agreed to make further advances, taking a mortgage on
the horses as security.
6. This mortgage Millar filed in the county clerk's office in Toronto on July 5, 1893.
Defendant Millar testifies that on July 8th, with Leroy's consent, he put the horses in the
care of one Biggs, the keeper of a hotel at the Toronto race track, to hold possession for
him. At the time when Ferguson returned to Toronto, after Leroy's disappearance, he
found the horses in the possession of Stilson, the plaintiffs' assistant driver, at the stable
of Biggs; saw Biggs, and paid him all his charges for feeding the men and horses, and
told him he was going to ship the horses. Biggs made no claim of possession, and
Ferguson learned nothing about Millar or his mortgage.
7. On Monday, the 17th of July, when the horses arrived in Detroit, USA, where they were
to race, the plaintiffs Vining et al. recorded their mortgage; and, on the following day, the
defendant Millar came to Detroit, and had the defendant Fox, who is a constable, seize
the horses under his chattel mortgage. The plaintiffs Vining et al., to whom this act was
the first notice of Millar's mortgage, demanded the return of the property, and, on its
being refused, brought this action of replevin, upon the trial of which a verdict was
directed in their favor.
Issue: Whether the defendant Millar's mortgage has preference over that of the plaintiffs, which
was prior in date.
Held: Yes Defendant Millar’s mortgage has priority over the mortgage of Vining et al. over the
same horses, with Millar having been a mortgagee in possession when Vining et al. took the
horses from the hotel keeper.
Ratio:
1. We have then a case in which the mortgagee in Canada has taken possession of
mortgaged property, and in which the mortgagor has, without his assent, regained
possession, transported the property to Michigan, and a prior lien holder has asserted a
lien which, while the property was so in the possession of the Canadian mortgagee, was
inferior to the Canadian lien.
2. Defendant Millar had taken possession of the property, and placed it with a custodian
(Biggs), and this with the assent of the mortgagor, Leroy. The property was not detained
by the custodian, but, as his agency was a special one, it is clear that he exceeded his
authority in delivering it over to, or permitting it to be taken by, plaintiffs Vining et al.
3. To give the Michigan lien priority under these circumstances is certainly to go a step
further than this court has yet gone. In previous cases, it appears that the foreign
mortgagee permitted the mortgagor to retain possession. In Corbett v. Littlefield it was
said distinctly that the mortgagee had it in his power to protect himself by taking
possession of the mortgaged property. It can hardly be said that it was intended to imply
that the mortgagee must, in addition to taking possession, stand guard over the property
constantly, to see that the mortgagors do not take it out of his possession and to another
4. Certainly, plaintiff, as mortgagee, under a mortgage executed in Michigan, upon property
which was, by their direct assent, taken to Ontario, were not entitled to priority over a
mortgage given in Ontario, and under which possession was given to the mortgagee.
Can it be said, then, that because Biggs, the custodian, did not withhold the property from
them, and because they did not in fact know of the title acquired by Millar from Leroy,
they are to be given priority for this reason? We cannot understand how they could
occupy any better position than a purchaser from Leroy could occupy; and if the
mortgage to Millar was taken by him in good faith, and the possession was actually
transferred as testified to by him, we think the mortgage as to Leroy's half interest in the
horses was good, and entitled to priority over plaintiffs.
Commonwealth v. Lane
18 Am. Rep. 509
Doctrine: The general rule is that a marriage, when celebrated in another jurisdiction, shall be
valid and subsisting in any jurisdiction outside of the place where it was celebrated. If the
statutory inhibition relates to matters of form or ceremony, and is some respects to qualifications
of the parties, the courts would hold such marriage valid here. But if the statutory prohibition is
expressive of a decided state policy as a matter of morals, the court must adjudge the marriage
void here, as contra bonus mores. Without intent to evade the law of origin, a person cannot be
considered guilty of polygamy.
Facts:
1. Lane and Morrill married in the state of Massachusetts. Thereafter, Morrill divorced Lane
on the ground of the latter having committed adultery.
2. The divorce laws of Massachusetts prohibited Lane from contracting another marriage
without prior leave of court. It states that “whoever, having a former husband or wife
living, marries another person, or continues to cohabit with such second husband or wife
in this state, shall be deemed guilty of polygamy and punished accordingly.”
3. Nevertheless, Lane met and married Upham in the state of New Hampshire. As a result,
he was charged with polygamy.
Issue: W/N Lane is liable for polygamy.
Ratio:
1. Divorce laws are limited to marriages within the jurisdiction of this Commonwealth. In the
case at bar, the Massachusetts law has no application to this case, because it is not
shown that the parties to the second marriage went out of this state to evade our laws, or
even that the second wife had resided in this state or knew of the previous marriage and
divorce.
2. The general rule is that a marriage, when celebrated in another jurisdiction, shall be valid
and subsisting in any jurisdiction outside of the place where it was celebrated.
a. If the statutory inhibition relates to matters of form or ceremony, and is some
respects to qualifications of the parties, the courts would hold such marriage valid
here.
b. But if the statutory prohibition is expressive of a decided state policy as a matter
of morals, the court must adjudge the marriage void here, as contra bonus
mores. Without intent to evade the law of origin, a person cannot be considered
guilty of polygamy.
3. Hence, a marriage which is prohibited here by statute, because contrary to the policy of
our laws, is yet valid if celebrated elsewhere according to the law of the place, even if the
parties are citizens and residents of this Commonwealth, and have gone abroad for the
purpose of evading our laws, unless the Legislature has clearly enacted that such
marriages out of the state shall have no validity here. This has been repeatedly affirmed
by well considered decisions.
Njus v. Rey. Co.
40 N.W. 527
Doctrine: This is a case of torts in which plaintiff suffered an injury due to the negligence of a co-
servant in the employment of defendant company. Under the statute of the state prescribing
liability of railroad companies for injuries caused by the negligence of its employees, as construed
by the Supreme Court of that state, the plaintiff can recover. Lex Loci Delicti governed this case
of torts. The statute of Iowa as interpreted by its Supreme Court was applied in this case because
that is where the injury occurred. Examining the cases before the Supreme Court of that state,
the court in this case found a legitimate basis for the assertion of an interest in the application of
the policy expressed in those cases.
Facts:
1. Louis Njus was working as a sectionman for Chicago, Milwaukee & St. Paul Railway Co.
when he was injured in the state of Iowa, through the alleged negligence of other
sectionmen with whom he was working.
a. His section crew was ordered to go upon a train of four flat-cars loaded with
railroad iron, drawn by an engine going east, stopping at points where the men
threw off bars of iron to repair the track at each point.
b. At one point when the train was at rest, Njus was injured due to the negligent
manner in which the other men let one of the bars drop.
2. Njus sued the railway company for personal injuries.
a. The company urged that it was a case of co-employees, governed by the rules of
common law in respect to the right of a servant to recover from the master for an
injury caused by the negligence of a co-servant.
b. Njus urged that it comes within the statute of Iowa, prescribing the liability of
railroad companies for injuries caused by the negligence of their employees.
3. Judgment in favour of Njus. The company appealed.
Issue: As the injury occurred in the state of Iowa, whether the cause of action must be
determined by the law of that state
Held: Yes. Judgment affirmed.
Ratio:
1. The decisions of this court, upon our statute, do not determine the question; but it must
be determined by the decisions in Iowa whether they are in accord with the decisions in
this state or not.
2. The cases before the Supreme Court in Iowa, in which the statute has been held to
apply, have generally been cases where the injury was in some way connected with, or
caused by, the movement or operating of trains.
o But there are other cases in which the court held the statute to apply, although
the injury was not caused by the actual moving or operating of trains.
 Deppe v. Railway Co: an employee engaged in connection with a dirt
train, injured while loading a car, though it was standing still, by the fall of
an impending bank of earth, could recover.
 Smith v.Railway Co: the statute applied to a sectionman whose duty it
was to ride on the train, and remove obstructions of snow, and who was
injured, while the train was standing still, by stepping upon the platform of
a car in consequence of its unsafe condition.
o There are cases in which, though the servant was working on or about the
railroad or the cars, his work was not directly connected with the movement of
trains, and he was not injured by such movement, it was held that the case was
not within the statute.
3. This case is more like the Deppe and Smith cases.
o Njus was working on the train, which was on the company’s main track, and in
the way of trains running upon that track and the work of the sectionmen had to
be done.
o Were the case before the Supreme Court of Iowa, it would sustain plaintiff’s
action.
Erickson v. S. S. Co.
96 Fed. 80
Facts:
1. Daniel Ray Erickson, proceeding pro se, appeals the ruling of the court below. Erickson
asserts that the magistrate judge made several errors in affirming the Commissioner of
Social Security's denial of his request for a waiver of an overpayment charge in
connection with his Social Security disability benefits. His allegations are as ff:
a. First, the Commissioner violated his due process rights when the Commissioner
failed to correct the miscalculation of his benefits caused by a computer error in
1972, resulting in an underpayment of $150,000.
b. Second, Erickson argues that his due process rights were violated when funds
were deducted for overpayment without determining whether he was at fault and
that there was not substantial evidence to support the decision that there was an
overpayment.
c. Third, Erickson argues that his due process rights were violated when the
Commissioner held open the 1984 through 1985 suspension of his disability
insurance benefits ("DIB") but later determined that the suspension of benefits
issue was time barred.
d. Fourth, Erickson argues that the Commissioner, acting as an agent for Medicare,
failed to repay the amount deducted for insurance premiums, violating his due
process rights.
e. Fifth, Erickson contends that the magistrate judge did not have jurisdiction to rule
on the objections he filed to the magistrate judge's order and applied the
incorrect standard of review.
f. Lastly, Erickson argues that as to the 1995 through 1996 overpayment issue, the
Commissioner was barred by res judicata from revisiting the final decision and
acted vindictively in overturning the favorable 2000 decision of the Administrative
Law Judge ("ALJ").
Issue: W/N res judicata applies to the 2000 decision? NO. The 2000 decision was vacated by the
Appeals Council and no longer had any preclusive effect.
Held:
2. We find that the first four claims are time-barred. There is no evidence in the record to
support Erickson's fifth claim that the magistrate judge used an arbitrary standard of
review. We reject Erickson's sixth contention because Erickson's own decision to appeal
the partially favorable ruling contributed to the adverse result and substantial evidence
supported the ALJ's
3. We review de novo a district court's dismissal of a claim as barred by the statute of
limitations. Jackson v. Astrue, 506 F.3d 1349, 1352 (11th Cir. 2007). Chapter 42 U.S.C. §
405(g) provides the exclusive jurisdictional basis for cases arising under the Social
Security Act. 42 U.S.C. § 405(g). Section 405(g) states in relevant part: “Any individual,
after any final decision of the Commissioner of Social Security made after a hearing to
which he was a party, irrespective of the amount in controversy, may obtain a review of
such decision by a civil action commenced within sixty days after the mailing to him of
notice of such decision or within such further time as the Commissioner of Social Security
may allow.”
4. 42 U.S.C. § 405(g) (emphasis added). Section 405(g) limits judicial review to final
decisions of the Commissioner made after a hearing. Califano v. Sanders, 430 U.S. 99,
108, 97 S.Ct. 980, 986, 51 L.Ed.2d 192 (1977). "Congress' determination so to limit
judicial review to the original decision denying benefits is a policy choice obviously
designed to forestall repetitive or belated litigation of stale eligibility claims. Our duty, of
course, is to respect that choice." Id. As the regulations proscribe, where a claimant
seeks review of a determination, he must seek reconsideration within 60 days.
5. Erickson's claim that his benefits were miscalculated in 1972 resulting in an
underpayment of $150,000 is time- barred. In reviewing the record, there is no evidence
suggesting that Erickson requested review of his initial benefit calculation made in 1973
until 1998. Erickson failed to challenge the calculation of his benefits within 60 days so
his claim is untimely and must be dismissed. 42 U.S.C. § 405(g). Likewise, Erickson's
second and third claims are untimely. He again did not challenge the withholding of
benefits in the 1980s until 1998, failing to meet the 60 day statute of limitations.
6. Erickson's fourth claim is that he should not have been charged with Medicare premiums
during his incarceration. This claim is also time-barred. A 1986 letter stated that the
amount of $156.40 would be deducted from Erickson's benefits within 30 days unless he
requested relief from the payment or arranged an alternative method of payment. As
Erickson did neither, his attempt to renew any right of review by demanding
reconsideration in 1998 was untimely.
7. As to Erickson's fifth claim, there is no evidence in the magistrate judge's order to
suggest that an incorrect standard of review was applied. Erickson specifically relies on
the phrase "I guess" as the arbitrary standard applied, however, this phrase does not
appear in the magistrate judge's order. Pursuant to Federal Rule of Civil Procedure 59(e),
a court is afforded broad discretion to reconsider an order which it has entered. Erickson
cites to no evidence that the magistrate judge was incorrect in construing the
supplemented objections as a motion to reconsider. Consequently, we find no error.
8. When reviewing the ALJ's decision, we ask whether it was supported by substantial
evidence. "Substantial evidence is less than a preponderance, but rather such relevant
evidence as a reasonable person would accept as adequate to support a conclusion." Id.
This Court may not decide facts anew, reweigh the evidence, or substitute its own
judgment for that of the Commissioner.
9. Whenever the Commissioner finds that more than the correct amount of payment has
been made to any person under Title II of the Social Security Act, proper adjustment or
recovery must be made. 42 U.S.C. § 404(a)(1). An overpayment prompting such an
adjustment or recovery includes a payment resulting from the failure to terminate
benefits. Id. The Act provides that there shall not be recovery from any person who is
without fault if recovery would defeat the purpose of Title II. 42 U.S.C. § 404(b). Under
the regulations, the term "defeat the purpose of Title II" is defined to mean, "to deprive a
person of income required for ordinary and necessary living expenses." 20 C.F.R. §
404.508(a).
10. The ALJ's decision that the denial of a waiver of the overpayment would not defeat the
purpose of Title II was supported by substantial evidence. The record demonstrates that
Erickson could afford the amount of repayment without depriving him of income required
for necessary living expenses. Erickson testified that his mother died in April 2006,
leaving him approximately $50,000 in stocks, bonds, and cash. He also received a half
interest in his mother's house, which was worth approximately $100,000. Erickson
testified that he was "financially okay now," that he did not have any debt, and that
"everything's taken care of."
11. The Appeals Council's decision to reverse the 2000 decision was not vindictive because
Erickson himself appealed the ALJ decision, despite the partially favorable outcome. In
undertaking this appeal, Erickson risked losing the waiver he had been awarded by the
ALJ. The Appeals Council acted within its authority in remanding the case for further
consideration of whether the whole of the overpayment should be waived rather than just
the net balance.
12. But for the change in Erickson's financial circumstances resulting from his inheritance,
the findings of the ALJ in 2007 indicate that Erickson likely would have prevailed as to the
entire overpayment sum because he was found to be without fault in causing the
overpayments. Thus, the decision to reverse the favorable outcome of the 2000 was not
vindictive. Erickson is financially capable of repaying the overpayment, the ALJ did not
err in denying the waiver.
Burnett v. R. Co
34 Atl. 972
Doctrine: When the contract is made in one state or country to be performed in another state or
country, its validity and effect are to be determined by the laws of the place of performance.
Facts:
1. Plaintiff was employed by the defendant as a flagman at Trenton, New Jersey. He
applied for and was granted free transportation for himself, his wife, and daughter to
Elmira, New York. He received 2 passes: one from Trenton to Philadelphia, the terms of
which do not appear in evidence; and an employee’s trip pass from Philadelphia to
Elmira, by the terms of which he assumed all risks of accident.
2. Plaintiff was injured at Harrisburg, Pennsylvania through the admitted negligence of the
defendant’s employees.
3. It was proved that the trial under the laws of New Jersey, the contract by which the
plaintiff in consideration of free transportation assumed the risk of accident was valid, and
that in that state he could not recover.
4. It is also conceded that in Pennsylvania, the decisions are otherwise, and that such a
contract will not relieve a common carrier from responsibility for negligence.
5. The defendant is a corporation of the state of Pennsylvania. The injury occurred in the
operation of its road in this state. The passes, although issued and delivered in New
Jersey, were for transportation from the station in Trenton directly across the Delaware
River into Pennsylvania. The service was to be rendered in Pennsylvania.
Issue: Which law will govern the responsibility of the defendant?
Ratio:
1. Generally as to its formalities and its interpretation, obligation and effect, a contract is
governed by the laws of the place where it is made, and if it is valid there it is valid
everywhere.
2. But when the contract is made in one state or country to be performed in another state or
country, its validity and effect are to be determined by the laws of the place of
performance.
3. It is presumed that parties enter into a contract with reference to the laws of the place of
performance, and unless it appears that the intention was otherwise, those laws
determine the mode of fulfillment and obligation and the measure of liability for its breach.
Lehigh Valley Railroad Company v. Pennsylvania
145 U.S. 192
Facts:
1. The Auditor General of Pennsylvania settled an account with the Lehigh Valley Railroad
Company for its taxes on gross receipts for the six months ending December 31, 1866.
2. The Lehigh Company thereupon prayed an appeal to the Court of Common Pleas of
Dauphin County, Pennsylvania, where a declaration and copy of account were filed and
the case tried under stipulation by the court without a jury. Upon the trial, it appeared
from the affidavit of the treasurer of the Lehigh Company, given November 10, 1887, that
he had made to the Auditor General for the six months ending December 31, 1886, the
report of gross receipts upon which the account for taxes had been settled, and further
that "the main line of railroad operated by the Lehigh Valley Railroad Company extends
from Perth Amboy, in the State of New Jersey, to Wilkes Barre, in the State of
Pennsylvania, with numerous branches in Pennsylvania and New Jersey.
3. The company has also running arrangements with other companies whereby it runs its
own trains, both passenger and freight, on a through line from Jersey City, New Jersey,
to Buffalo, New York. A very large portion of its business consists of the transportation of
freight, passengers, etc., from points in Pennsylvania to points in other states, or from
points in other states to points in Pennsylvania, or from points in other states to points in
other states passing through the State of Pennsylvania, about one-half of its entire
receipts being derived from the transportation of anthracite coal from Pennsylvania into
other states."
4. It was admitted that the Lehigh Company was originally incorporated by the State of
Pennsylvania, and that it owned and operated, as part of its main line, about sixty-six
miles of railroad in New Jersey.
5. The court of common pleas found the facts, and held that the commonwealth could only
recover taxes upon the two items of $1,353,441.50 and $207,660.42 (classes one and
two), being the amount received for transportation between points both of which were in
the state, and directed judgment accordingly.
6. The case was carried by writ of error to the Supreme Court of Pennsylvania, and the
judgment affirmed upon the opinion of the court below. A writ of error was then sued out
from this Court.
7. The company, conceding its liability to taxation in respect of the receipts contained in
class one, questions by its assignment of errors the validity of the tax as to the receipts in
class two.
Issue: Whether the tax as to the receipts in class two is valid and does not amount to a
regulation of interstate commerce.
Held: Yes
Ratio:
1. the judgment of the state court in sustaining the validity of the tax herein involved is
affirmed.
2. A state tax against a railroad corporation, incorporated under its laws on account of
transportation done by it from one point within the state to another point within it, but
passing during the transportation without the state and through part of another state, is
not a tax upon interstate commerce, and does not infringe the provisions of the
Constitution of the United States.
3. The Lehigh Valley Railroad Company is a Pennsylvania corporation, which owns and
operates an extensive system of railroads in that state, but has no line of its own to
Philadelphia.
4. For the traffic from Mauch Chunk to Philadelphia it makes use of two routes:
a. one by the way of the Philadelphia & Reading road, being wholly within the
state,
b. and the other by its own line connecting with the lines of the Pennsylvania
Railroad at Phillipsburg, New Jersey, and thence via Trenton, in that state, to
Philadelphia.
5. The receipts named in class two are confined to that part of the transportation from
Mauch Chunk to Phillipsburg, and the taxation to the mileage wholly within the State of
Pennsylvania, and the question is whether this taxation in respect of such receipts from
freight and passengers carried by continuous transportation to Philadelphia from Mauch
Chunk by way of Trenton, New Jersey, amounts to a regulation of interstate commerce.
6. The tax under consideration here was determined in respect of receipts for the proportion
of the transportation within the state, but the contention is that this could not be done,
because the transportation was an entire thing, and in its course passed through another
state than that of the origin and destination of the particular freight and passengers.
There was no breaking of bulk or transfer of passengers in New Jersey. The point of
departure and the point of arrival were alike in Pennsylvania. The intercourse was
between those points, and not between any other points.
Le Bourgogne
210 U.S. 95
Doctrine: The law of France, which authorizes a recovery for loss of life against a vessel in fault,
will be enforced by the courts of the United States in a proceeding to limit liability for claims
against a French vessel found to be at fault for a collision in a fog on the high seas, although the
French courts, in applying to the facts found the international rule as to the speed of vessels in a
fog, might not have held such vessels to be at fault.
Facts:
1. In the Atlantic ocean, as the result of a collision between the British ship Cromartyshire
and the French steamship La Bourgogne, bound from New York to Havre, La Bourgogne
was hopelessly injured, sank in a short time, and most of her passengers, her captain,
other principal officers, and manyof the crew, went down with the ship.
2. La Compagnie Generale Transatlantique, a French corporation, the owner of La
Bourgogne, petitioned the United States district court of New York, seeking to obtain the
benefit of the laws of the United States limiting the liability of shipowners. The petitioner
challenged the validity and amount of the claims reported.
3. It is argued first, that, as La Bourgogne was a French ship, and as all the claims arose
exclusively because of damage done to persons or property on board the steamship, the
fault of that vessel should be tested by the theory which would be applied in the courts of
France; and, second, that, accepting the conditions as to fog and the rate of speed found
by the courts, if the international rule, as enforced in the French courts, be applied, it
would follow that the rate of speed was moderate, and therefore the steamship was not at
fault.
Issue: W/N the rule of practice of French court should apply in determination of fault of vessel
Held: No
Ratio:
1. It was settled in that a foreign ship is entitled to obtain in the courts of the United States
the benefit of the law for the limitation of liability of shipowners. But if a collision occurs
on the high seas, where the law of no particular state has exclusive force, but all are
equal, any forum called upon to settle the rights of the parties would, prima facie,
determine them by its own law, as presumptively expressing the rules of justice; but, if
the contesting vessels belonged to the same foreign nation, the court would assume that
they were subject to the law of their nation, carried under their common flag, and would
determine the controversy accordingly. If they belonged to different nations, having
different laws, since it would be unjust to apply the laws of either to the exclusion of the
other, the law of the forum that is, the maritime law, as received and practised therein
would properly furnish the rule of decision. In all other cases each nation will also
administer justice according to its own laws. And it will do this without respect to
persons, to the stranger as well as to the citizen.
2. The petitioner is here seeking the benefits conferred by a statute of the United States,
which it could not enjoy under the general maritime law. Strictly speaking, the
application for a limitation of liability is in effect a concession that liability exists, but,
because of the absence of privity or knowledge, the benefits of the statute should be
awarded. It is true that, under the rules promulgated by this court, the petitioner is
accorded the privilege not only of seeking the benefits of the statute, but also of
contesting its liability in any sum whatever.
3. This does not, however, change the essential nature of the proceeding. As the petitioner
called the various claimants into a court of admiralty of the United States, to test
whether, in virtue of the laws of the United States, it should be relieved, in part, at least,
of liability from the consequences of the acts of its agents, and as the international rules
have the force of a statute, we think the issues presented were of such a character as to
render it essential that the right to exemption should be tested by the law as
administered.
4. The law of France, which authorizes a recovery for loss of life against a vessel in fault,
will be enforced by the courts of the United States in a proceeding to limit liability for
claims against a French vessel found to be at fault for a collision in a fog on the high
seas, although the French courts, in applying to the facts found the international rule as
to the speed of vessels in a fog, might not have held such vessels to be at fault.
Armstrong v. Lear
6 L. Ed. 589
Facts:
1. The decedent (Thade) placed a large sum of money with an attorney (Jefferson) and
executed a will and testament.
2. Subsequently, while domiciled in Paris, the decedent executed a written instrument in
the nature and effect of a last will and testament, whereby he willed a legacy of
approximately $3,000 to appellant (Armstrong) and instructed Jefferson in the United
States to pay the sum to Armstrong upon his death.
3. The decedent signed and sealed the written instrument in the presence of two
competent witnesses and delivered the document to Armstrong’s father. The latter
document was admitted to probate as the decedent's last will and testament.
4. Jefferson, however, refused to take out letters testamentary on Thade’s estate after the
latter’s death. Consequently, Lear was appointed administrator of the estate.
5. Lear refuses to pay the amount of the legacy to Armstrong without an order rendered by
the court. Further, Lear claims that the letter of Thade to Jefferson revoked the
subsequent instrument and reestablished and republished Thade’s former will.
6. The circuit court dismissed the bill of complaint. An appeal was taken to the Supreme
Court.
Issue: Whether the letter of the Thade to Jefferson operates as a revocation of said instrument,
and a reestablishment and republication of his former will.
Ratio:
1. The Court reversed and remanded the decision of the lower court, ruling that in order to
assess the validity of the will, it was material that the law of France, the decedent's
domicil at the time of its execution, was to be brought before the court.
2. It was also material that a letter from the decedent to his attorney in the United States
allegedly revoking the supposed testamentary paper in favor of appellant and a
republication of the first will be produced and verified.
Kraft v. Wickey
23 Am. Dec. 569
Facts:
1. Michael Marck died with a will and was survived by hiswife Philippina and 5 minor
children namely Dorothea, Henry, Michael, John and George in the City of Baltimore.
2. Marck’s will was executed and probated according to the laws of Baltimore and his
estate was to be administered according to the laws of such county.
3. Philippina later on married Lewis Wickey and transferred to Pennslylvania along with her
children in 1922 where she continued to reside until 1929.
4. Dorothea however predeceased her mother and her siblings at the age of 14 when they
were already living in Pennsylvania.
5. Wickey was appointed as the guardian of the 4 remaining children by the orphans court
of york in Pennsylvania.
6. Subsequently however George kraft was appointed as a guardian of the same children
by the Orphans court of Baltimore which was uninformed of the previous appointment of
Wickey.
7. It is worth noting that Wickey was not required by the Court of Pennsylvania to give
security for the trust confided to him as guardian.
8. Later on the Orphans Court revoked George Kraft’s appointment as guardian inasmuch
as the children already had one who was regularly appointed in Pennsylvania. Thus
prompting Kraft to bring the case to the SC on appeal.
Issue: Whether a guardian appointed in another state, is authorized by virtue exclusively of such
appointment, to act as guardian in this state (the state of Baltimore) in respect of property lying
here and under the control of the Orphans Court?
Held: No
Ratio:
1. The Court rules in favor of the appellant stating that since the administration of the estate
of Marck was granted in Baltimore county, the Orphans Court of that county had express
power conferred upon it to appoint a guardian to his (Marck’s) infant children, and the
legality, and consequent regularity of this appointment could not be affected by the fact
tat a guardian for these children had been appointed by the Orphans’ Court in
Pennsylvania. The appointment of a guardian granted in a foreign state can have no
extra-territorial operation, so as to oust our court of their jurisdiction over the property of
infants. This is similar to the doctrine that foreign executors and administrators had not
only no power to supersede those appointed to the administration of the estate by the
domestic forum but had not even the power to sue for and recover rights and credits of
their testator or intestate.
2. The domestic guardian, having the property, is bound to pay for the maintenance and
education of the ward. And the foreign guardian, having the custody of the ward, can
enforce the fulfillment of this requisition by an application to the proper tribunal. In such
case the domestic guardian would be regarded as a trustee. This results from the extent
of the power granted to our courts, to appoint guardians, viz: in all cases where they
grant administration, they may protect the rights of infants interested therein.
Noonan v. Bradley
20 L. Ed. 757
Doctrine: In the absence of a statute no suit can be maintained by an administrator in his official
capacity, except within the limits of the state from which he derives his authority. If he desires to
prosecute a suit in another state he must first obtain a grant of administration therein in
accordance with its laws.
Facts:
1. In January 1860, a decision was rendered by the District Court of the United States for
the District of Wisconsin against the bond posted by Noonan in a sales transaction he
entered into with the deceased Lee over a certain property located in Wisconsin. This
was because Noonan failed to pay the installments on the purchase price of the subject
property.
2. It found that there was due on the bond a sum exceeding $5,000, and directed a sale of
the mortgaged premises (the property was likewise mortgaged as security for the
payment of its purchase price), and the application of the proceeds to the payment of the
amount found due. It was also decreed that Noonan should pay any deficiency which
might remain.
3. On appeal, this decision was modified with respect to the finding that Noonan should pay
any deficiency which might remain but was affirmed in all other particulars.
4. During the appeal, however, Lee died domiciled in NewYork, and Bradley, was duly
appointed by the proper tribunal in that State administrator of his estate. On his
application, Bradley was then substituted as representative of his intestate on the record
in the case on appeal in this court.
5. In another case (an ejectment case) filed by Noonan against the adverse possessor
Orton, a judgment was rendered in favor of the latter upon the ground that the Noonan
was not seized in fee of the premises, and acquired no title by his purchase from Lee,
and that Orton was thus seized.
6. Meanwhile, since Lee died leaving behind several effects of value belonging to him in
Wisconsin, one T. L. Ogden was duly appointed administrator of those effects by a
tribunal having jurisdiction of the matter in that State; and he qualified and entered upon
the discharge of his duties as administrator, and when this action was commenced had in
his possession the bond given by Noonan to Lee on the purchase of the premises.
7. In September, 1866, Bradley, as administrator of the estate of Lee, under the
appointment in the State of New York, brought an action upon the bond of Noonan which
was found liable in the January 1860 decicion (see par. 1).
8. Noonan, on the other hand, interposed three pleas:
a. That as to the supposed causes of action mentioned therein, the plaintiff was not
and never had been administrator of the effects of the deceased.
b. That there were effects of value of the decedent at the time of his death in the
State of Wisconsin, among which was the bond in suit; that T. L. Ogden was duly
appointed by a tribunal in that State administrator of those effects, and had
qualified and entered upon, and was engaged in the discharge of his duties as
such officer at the time the action was commenced; and that by reason of this
appointment and qualification, the effects of the decedent, in Wisconsin, were,
under the laws of that State, vested in him, with all rights of action in relation
thereto, and that as a consequence the letters issued to the plaintiff in the State
of New York, with reference to the causes of action stated in the declaration,
were void and of no effect
c. That the title of Lee to the premises sold had failed, the plea setting up the
agreement indorsed on the bond, and the proceedings and judgment in the
ejectment suit, to bring the case within the agreement.
9. To the pleas the Bradley demurred; the Circuit Court sustained the demurrer, and
entered final judgment thereon in favor of the Bradley for the penalty of the bond; and
Noonan brought the case to this court on writ of error.
Issue: W/N the administrator could could maintain an action in Wisconsin, when he had been
named administrator in New York.
Held: We are of opinion that the pleas of the defendant constitute a bar to the action, and that the
Circuit Court erred in sustaining the demurrer to them. It follows that its judgment must be
REVERSED, and the cause remanded FOR FURTHER PROCEEDINGS.
Ratio:
1. Upon this question the law is well settled. All the cases on the subject are in one way. In
the absence of any statute giving effect to the foreign appointment, all the authorities
deny any efficacy to the appointment outside of the territorial jurisdiction of the State
within which it was granted. All hold that in the absence of such a statute no suit can be
maintained by an administrator in his official capacity, except within the limits of the State
from which he derives his authority. If he desires to prosecute a suit in another State he
must first obtain a grant of administration therein in accordance with its laws.
2. So far has this doctrine been extended that in Fenwick v. Sears's Administrators, where
the plaintiff had obtained letters of administration in Maryland, before the separation of
the District of Columbia from the original States, it was held by this court that he could
not, after the separation, maintain an action in that part of the district ceded by Maryland
by virtue of these letters, but that he must take out new letters within the district.
3. The same doctrine is as applicable to the case of executors as to that of administrators;
the right to sue in both instances depending upon the letters.
4. The position of the plaintiff aided by the statute of Wisconsin, which enables foreign
executors and administrators to sue in certain cases in the courts of that State does not
affect the present case. That statute only applies where no executor or administrator of
the estate of the decedent has been appointed in the State, and then only in the counties
where the foreign executor or administrator has filed in the Probate Court an
authenticated copy of his appointment.
Cox v. United States (1832)
8 L. Ed. 359
Doctrine: The general rule, is that the law of the place where the contract is made, and not
where the action is brought, is to govern the parties. The exception would be where the parties
have a view to its being executed elsewhere, in which case, it is to be governed according to the
law of the place where it is to be executed. There is nothing appearing on the face of this bond
indicating the place of its execution, nor is there any evidence in the case showing that fact. In the
absence of all proof on that point, it being an official bond taken in pursuance of an act of
Congress, it might well be assumed as having been executed at the seat of government.
Facts:
1. U.S. instituted a suit in the District Court of the U.S. for the Eastern District of Louisiana,
according to the practice of that state, upon a joint and several bond given by a navy agent
and his sureties that Hawkins should faithfully account for all public moneys received by him.
Hawkins failed to account for these public moneys.
a. A verdict and judgment were entered in favor of the plaintiffs against the defendants
Hawkins, Dick, and Cox, who were held jointly and severally liable to the U.S. according
to the judgment.
Issue: Whether the contract and liability of the parties are to be governed by the rules of the civil
law prevailing in Louisiana or by the prevailing law in Washington.
Held: Washington; the bond being joint and several, each is bound for the whole, and that the
contribution between the co-sureties is a matter with which the U.S. has no concern.
1. The general rule, is that the law of the place where the contract is made, and not where the
action is brought, is to govern the parties, unless the in expounding and enforcing the
contract unless the parties have a view to its being executed elsewhere, in which case it is to
be governed according to the law of the place where it is to be executed.
2. There is nothing appearing on the face of this bond indicating the place of its execution, nor is
there any evidence in the case showing that fact. In the absence of all proof on that point, it
being an official bond taken in pursuance of an act of Congress, it might well be assumed as
having been executed at the seat of government. But it is most likely that in point of fact, for
the convenience of parties, the bond was executed at New Orleans, particularly as the
sufficiency of the sureties is approved by the District Attorney of Louisiana.
3. However, admitting the bond to have been signed at New Orleans, it is very clear that the
obligations imposed upon the parties looked for its execution at Washington.
a. It is immaterial where the services as navy agent were to be performed by Hawkins. His
accountability for nonperformance was to be at the seat of government.
b. He was bound to account, and the sureties undertook that he should account for all
public moneys received by him, with such officers of the government of the United States
as are duly authorized to settle and adjust his accounts. The bond is given with reference
to the laws of the U.S. on that subject. Also, accounting is required to be with the
Treasury Department at the seat of government, and the navy agent is bound by the very
terms of the bond to pay over such sum as may be found due to the U.S. on such
settlement, and such paying over must be to the Treasury Department or in such manner
as shall be directed by the Secretary. Thus, the bond is to be executed at Washington,
and the liability of the parties must be governed by the rules of the common law.
Duncan v. U.S.
8 L. Ed. 739
Doctrine: A government official’s bond conditioned for the performance of his duties must be
considered as having been executed at the seat of government of the United States, and is
governed by the common law and not by the lex loci contractus. A contract made with the
government is, in contemplation of law, executed at the seat of government, and the lex loci
contractus does not affect it.
Facts
1. Three sureties, William Carson, Abner Duncan and John Carson, executed a bond in
favor of the United States government.
2. Under the bond, they bound themselves, including their heirs, that William Carson (as
paymaster of the U.S.) shall well and truly perform and discharge, according to law, the
duties of the office of paymaster of the US, within the district of New Orleans.
3. Alleging breach of this bond, the United States filed an action against the Heirs of Abner.
It was claimed that William Carson, as paymaster, has not well and truly discharged the
duties of said office for the district of New Orleans, but on the contrary, although he
received large sums of money in this capacity, refused to pay the same to the US
treasury.
4. The Heirs of Abner denied liability on the following grounds:
a. When Abner he executed the bond, it was agreed that it should also be signed by
another surety named Thomas Duncan, but Duncan never signed the same; and
b. William Carson was appointed paymaster for a certain district, but he acted as
paymaster out of the limits of the district of Louisiana and the defalcation
occurred outside the limits of said district. The issue arose when during trial, the
Heirs offered a statement to the court for the purpose of obtaining a special
verdict on the facts pursuant to a Louisiana statute. However, the Court denied it
because it was contrary to the practice of the court. Judgment was rendered
against the Heirs.
Issue
Whether the bond, executed in New Orleans, was governed as to the manner of its execution and
obligations, by the principles of civil law (lex loci contractus)?
Held
1. No. The case involved an official bond that was given under the laws of the United
States. The conditions of the bond were fixed and the manner of its obligations should
be enforced under such law. It was delivered to the treasury department at Washington,
the paymaster and sureties became bound to the treasury. These powers exercised by
the Federal government cannot be questioned because the latter may prescribe, under
its own laws, what kind of security shall be given by its agents for the faithful discharge of
its duties.
2. Hence, the local law cannot affect the contract, as it is made with the government, and in
contemplation of law, at the place of where its principal powers are exercised. The bond
should be considered as having been executed at the seat of the government of the US,
and governed by the principles of common law and not of civil law.
Noble v. Oil Co.
21 Am. Rep. 66
Doctrine: The plaintiff in a foreign attachment stands on no better footing as to the thing attached
than his debtor, the defendant, whose property is sought to be seized. All that can be seized by
virtue of the attachment, is the property of the debtor. The original plaintiff in this judgment having
disposed of it in good faith and for a valuable consideration to the defendants in error, no creditor
of the assignor could set aside the assignment by proceedings in foreign attachment.
Facts:
1. A warrant issued was issued by a judge of the Supreme Court of New York, on the
affidavit of Woods & Wright Oil Company, to attach the property of Thompson Oil
Company, to satisfy the former's demand of money.
2. An execution was given by the court but the sheriff returned saying that the execution
was unsatisfied since Thompson Oil Company had no property in New York.
3. The sheriff returned to the warrant that on the same day he levied “upon property within
said county belonging to the defendant, and that said property consisted of an
indebtedness to said Thompson Oil Company” from Snow, Burgess, Woods & Wright, for
which Thompson Company had recovered a judgment of $27,000.
4. Alfred D. Snow, president of Woods & Wright Company, filed an affidavit that the
defendants in the attachment could not be found in the state; that the defendants were a
foreign corporation doing business in Pennsylvania, and one not incorporated by New
York, and had property within that state, consisting of an indebtedness to them from
Ambrose Snow et al.
5. Upon this affidavit, a judge of the Supreme Court directed that service of the summons in
the action be made on the defendants by publication in two newspapers in the city of
New York designated by the judge, and that a copy of the summons and complaint be
sent by mail to the defendant at Erie, Pennsylvania.
6. Ambrose Snow et al. made an affidavit, admitting the indebtedness, and alleging that
they had been notified that certain parties, whose names he could not remember,
claimed to own by assignment from Thompson Company the judgment obtained in
Pennsylvania against Snow, Burgess and others in favor of that company.
7. The plaintiff demanded judgment against Snow et al. that they should pay to Woods &
Wright Company the amount of the judgment against them in favor of Thompson
Company.
8. Snow et al. averred that after the attachment had been levied, they received notice that
the judgment in favor of Thompson Company had been assigned by that company to J.
C. & F. F. Marshall, J. H. Walker & Son, and Conrad Brown, who claimed to be the
owners of the judgment.
 They alleged that the assignment was made before the service of the
attachment, and that by reason of the assignments Thompson Company had no
claim against Snow et al., upon which execution could be levied.
Issue: W/N the writ of attachment obtained in New York will be effective against a property and
party in Pennsylvania
Held: No
Ratio:
1. Thompson Oil Company was a corporation formed under the laws of Pennsylvania and
doing business therein. The assignees were citizens and residents of Pennsylvania. The
judgment assigned was of record in a court of this state. When the assignment was
made, the assignor, the assignees, and the property assigned, were all within the
Commonwealth of Pennsylvania and governed by its laws.
2. It was not a statutory transfer of the judgment, but a voluntary sale and assignment of it.
It was then beyond all doubt a valid transfer here. Being a valid assignment when and
where made, it is valid everywhere.
3. The assignees took the judgment subject to the equities existing between the parties
thereto at the time of the assignment, and they also held it subject to any payments that
might be made by the defendants therein to the assignor before notice of the assignment.
By this transfer the whole property of Thompson Oil Company in the judgment passed to
the assignees. Thenceforth the oil company had no attachable interest in the judgment,
but held it as a mere naked legal trustee of their assignees. The defendants in that
judgment no longer owed or were indebted to the original plaintiff therein, but they owed it
to the assignees.
4. The plaintiff in a foreign attachment stands on no better footing as to the thing attached
than his debtor, the defendant, whose property is sought to be seized. All that can be
seized by virtue of the attachment, is the property of the debtor. The original plaintiff in
this judgment having disposed of it in good faith and for a valuable consideration to the
defendants in error, no creditor of the assignor could set aside the assignment by
proceedings in foreign attachment.
5. The writ of foreign attachment rests on the assumption that the debtor is beyond the
limits of the state, but his property is within the reach of process. A judgment in
personam is invalid unless procured after service of summons or after appearance.
Without one of these the court would have no jurisdiction of the person. So if the
judgment be in a proceeding in rem it is void if the court has no jurisdiction of the
property.
6. The fact that the garnishees in the attachment after judgment has been recovered
against the assignor, notified the assignor and the assignee, by letter, of the pendency of
the proceedings, does not change the result. The notice was insufficient in substance and
unreasonable in time.
 The assignees were not bound to appear on such a notice and contest the case.
If they had done so, and had been admitted as parties to the suit, the case
of Moore v. Spackman, 12 S. & R. 287, would bind them to acquiescence in the
judgment. On the contrary, they waived none of their rights. They were neither
parties nor privies to the suit.
7. We assent to the conclusiveness of the judgment of a court of a sister state, when that
court has jurisdiction, yet we cannot concede that a person resident within this state, and
owning property situated therein, shall involuntarily and by such a proceeding be
constructively brought within the jurisdiction of the court of another state, so as to divest
his rights in that property.
8. If the garnishees had properly averred the claim of the assignees, which the record
shows was known to them, the plaintiffs in the attachment would have been compelled to
amend their summons and complaint so as to have made the assignees a party to the
action. Nor is it a valid objection to such a course that the assignees are residents of
another state
9. The rights of third persons can be brought into litigation only in a regular way by suit.
10. The judgment pleaded shows on its face that it was obtained in disregard of the laws of
New York and of the rights of the assignees. No property was seized. No appearance of
the defendants in error was procured. No effort was made to bring them in on process.
They were not substituted of record. They were not in any sense a party to the action.
Their rights as assignees were, therefore, not affected.
The Rio Grande
23 L. ED. 158
Doctrine: Jurisdiction of the res is obtained by a seizure under process of the court, whereby it is
held to abide such order as the court may make concerning it. The power to render the decree or
judgment which the court may undertake to make in the particular case depends upon the nature
and extent of the authority vested in it by law in regard to the subject-matter of the cause.
Facts:
1. Williams, a steamboat captain bought in New Orleans, a steamboat called The Rio
Grande and took her to Alabama. This was then mortgaged to Steward and Ross and
was employed in running in between towns. This remained in Williams possession.
2. The steamboat was then libelled by Otis and others in District Court of Alabama for
repairs alleging that the steamer was owned by persons outside of Alabama and
belonged to Mexico and that repairs had been made on credit of the vessel.
3. This was denied by Williams as owner and Ross and Stewart as mortgages.
4. Evidence then showed that vessel had been originally a vessel of war built for rebel
confederacy and was sold as a prize to Harzard. This was later sent to Matamoras in
Mexico. Vessel was registered under name of Francisco Alcala, a citizen of New Orlean.
Tyler brought vessel to New Orleans for special purposes but while it is property of an
American Citizen, it was not allowed registration so was given a temporary permit.
5. Alabama district considered that the debts set forth in libels did not constitute a maritime
lien so as to give Alabama district court jurisdiction.
6. The proctor of the mortgagees obtained order of retention of the steamboat to them.
7. The marshal then surrendered it to them and the steamboat was carried to sea.
8. The Libellants gave their appeal bonds.
9. The company acquired the right of the owner and the mortgagees intervened.
Issue: W/N there was a valid siezure

Held: Yes
Ratio:
1. A valid seizure and actual control of the res by the marshal gives jurisdiction of the subject-
matter, and that an accidental or fraudulent or improper removal of it from his custody, or a
delivery to the party upon security, does not destroy jurisdiction.
a. In the present case the order for restoration was in direct violation of the statute
regarding appeals, and did not operate to destroy the jurisdiction of the Circuit
Court. That court was authorized to proceed as if no such order had been made.
2. The judgment of the Alabama circuit court that the steamboat was subject to the lien was
conclusive of the right of such claim when alleged in the Louisiana district court.
Pennoyer vs. Neff
24 L. Ed. 565
Facts:
1. Neff brought an action against Pennoyer for the recovery of a land situated in Oregon.
2. He obtained the title to said land under a patent issued by the US.
3. Pennoyer claimed that he had title over the land by virtue of a sale made by the Sheriff of
Oregon, under an execution and sued out upon a judgment against Neff by the Circuit of
Oregon, in the case of Mitchell vs. Neff.
4. In Mitchell vs. Neff, jurisdiction over Neff, who resided in California, was obtained by
service of summons by publication. Peyonner offered evidence of the complaint and
summons & judgment.
5. Neff objected to admission of the evidence, contending that the judgment against him in
that case was void for being in personam and the service of summons was not given
personally. He also said that the judgment was not in rem therefore it was not a basis of
title for the defendant and finally, there was no proof of service by publication offered.
Issue: Whether the law of Oregon applies rendering that jurisdiction was validly acquired over
Neff in Mitchell vs. Neff and consequently rendered Peyonner’s title over the land in question
valid.
Held: Yes, the law of Oregon applies
Ratio:
1. A state through its tribunals may compel persons domiciled within its limits to execute in
pursuance of their contracts respecting property elsewhere situated instruments in such
form and with such solemnity as to transfer the title so far as such formalities can be
complied with and the exercise of such jurisdiction did not interfere with the supreme
control over the property by the state within which it is situated.
2. Every state has the power to determine for itself the civil status or capacities of its
inhabitants, to prescribe the subjects upon which they may contract and the forms with
which their contracts shall be executed, the rights and obligations arising from them and
the mode in which their validity shall be determined and their obligations enforced, and to
regulate the manner and conditions upon which property situated within such territory
may be acquired and transferred.
3. While the courts of the United States are not foreign tribunals in their relations to the
State courts, they are tribunals of a different sovereignty, and are bound to give to a
judgment of a state court only the same faith and credit to which it is entitled in the courts
of another State.
4. The State, having within her territory property of a nonresident, may hold and appropriate
it to satisfy the claims of her citizens against him; and her tribunals may inquire into his
obligations to the extent necessary to control the disposition of that property. If he has no
property in the state, there is nothing upon which her tribunals can adjudicate.
5. In this case, an Oregon statute provides that:
a. after providing for service of summons upon parties or their representatives,
personally or at their residence,
b. it is declared that the service cannot be made,
c. the defendant, after due diligence, cannot be found within the State,
d. and that fact appears, by affidavit, to the satisfaction of the court or judge thereof,
i. that a cause of action exists against the defendant
ii. or that he is a proper party to an action relating to real property in the
state,
e. such court or judge may grant an order that the service be made by publication of
summons
i. when the defendant is not a resident of the State
ii. but has property therein
iii. and the court has jurisdiction of the subject of the action.
f. The proof of the publication shall be an affidavit of the printer, foreman or his
principal clerk.
Rose v. Himely
2 L. Ed. 608
Facts:
1. This was an appeal from the sentence of the Circuit Court for the District of South Carolina,
which reversed that of the district judge, who awarded restitution to Rose, the libellant, of
certain goods, part of the cargo of the American schooner Sarah.
2. This vessel, after trading with the brigands or rebels of St. Domingo at several of their ports,
sailed from there with a cargo purchased there for the United States.
3. Subsequently, nearing the coast of St. Domingo the vessel was arrested by a French
privateer .
4. The vessel was carried into the Spanish port of Barracoa in the Island of Cuba, and there,
with her cargo sold by the captors, before condemnation, but under authority, as it was said,
of a person who styled himself agent of the government of St. Domingo at St. Jago de Cuba.
5. The greater part of the cargo was purchased by the master of an American vessel called the
Example, into which vessel the goods were clandestinely transferred from the Sarah in the
night time and brought into the port of Charleston, in South Carolina.
6. It was in South Carolina where they were followed by Rose, the supercargo of the Sarah, who
filed a libel against them in behalf of the former owners, complaining of the unlawful seizure
on the high seas and praying for restoration of the goods, whereupon process was issued
and the goods were arrested.
7. No steps appear to have been taken by the French captors toward obtaining a condemnation
of the vessel until time enough had elapsed for them to receive information of the
proceedings against the goods in this country.
8. The forms of adjudication were begun in the tribunal of the first instance at Santo Domingo in
July, 1804, and the condemnation was had before the middle of that month.
9. This condemnation purports to be made conformably to the first article of the arrete of the
captain general (Ferrand) of 1 March, 1804, which was issued six days subsequent to the
seizure of the vessel.
10. This article was as follows: "The port of Santo Domingo is the only one of the colony of Santo
Domingo open to French and foreign commerce; consequently every vessel anchored in the
bays, coves, and landing places of the coast occupied by the revolters, those destined for the
ports in their possession, and coming out with or without cargoes, and generally every vessel
sailing within the territorial extent of the island (except between Cape Raphael and the Bay of
Ocoa) found at a less distance than two leagues from the coast shall be arrested by the
vessels of the state and by privateers bearing our letters of marque, who shall conduct them
as much as possible into the port of Santo Domingo, that the confiscation of the said vessels
and cargoes may be pronounced.”
11. No sentence of condemnation having been produced in evidence, the judge of the district
court decreed restitution of the property to the libellant.
12. The other party appealed to the circuit court, and there produced the sentence of
condemnation, by the tribunal of the first instance, at Santo Domingo.
13. The circuit court reversed the sentence of the district court, and dismissed the libel.
14. From this sentence the libellant appealed to this Court.
Issue: Whether a French court can, aligned with the laws of nation and the treaty, condemn
American property (the vessel) never carried into the dominions of France, and while lying in a
port of the United States.
Held: No, it cannot.
Ratio;
1. If a claim be set up under the sentence of condemnation of a foreign court, this Court will
examine into the jurisdiction of that court, and if that court cannot, consistently with the law of
nations, exercise the jurisdiction which it has assumed, its sentence is to be disregarded; but
of their own jurisdiction, so far as it depends upon municipal laws, the courts of every country
are the exclusive judges.
2. Every sentence of condemnation by a competent court having jurisdiction over the subject
matter of its judgment is conclusive as to the title to the thing claimed under it.
3. In every case of a foreign sentence condemning a vessel as prize of war, the authority of the
tribunal to act as a prize court must be examinable. The question whether the vessel was in a
situation to subject her to the jurisdiction of that court is also examinable.
4. It is for governments to decide whether they will consider a colony which has separated
herself from the mother country an independent nation. Until such decision shall be made or
the mother country shall relinquish her claim, courts of justice must consider the ancient state
of things as remaining.
5. Of its own jurisdiction, so far as it depends on municipal rules, the court of a foreign nation
must judge, and its decision must be respected. But if it exercises a jurisdiction which,
according to the law of nations, its sovereign could not confer, however available its
sentences may be within the dominions of the prince from whom the authority is derived, they
are not regarded by foreign nations.
6. It is repugnant to every idea of proceeding in rem to act against a thing which is not in the
power of the sovereign under whose authority the court proceeds, and no nation will admit
that its property should be absolutely changed, while remaining in its own possession, by a
sentence which is entirely ex parte.
7. A power to seize for the infraction of a law is derived from the sovereign, and must be
exercised within those limits which circumscribe the sovereign power. The rights of war may
be exercised on the high seas, because war is carried on upon the high seas, but the pacific
right of sovereignty must be exercised within the territory of the sovereign.
Mc Vicker v. Beedy
50 Am. Dec. 666
MC VICKER V BEEDY
Doctrine:
Facts:
1. The judgment was recovered upon a contract made in Illinois, by persons then resident
there.
2. Property of Beedy, in hands of a garnishee, was attached and held in said process, and
notices of the suit were duly published.
3. Nothing is pleaded here, to show a want of jurisdiction, but what was apparent to the
court of Illinois. The matter of jurisdiction is therefore res adjudicata.
4. Courts of a sister State should be presumed to have jurisdiction, when they attempt to
exercise it, and the exercise of it is prima facie evidence of jurisdiction.
5. If the jurisdiction does not sufficiently appear, to make the judgment binding upon the
defendant, as a domestic judgment, courtesy will at least put it on the footing of a foreign
judgment, so that it shall be taken as prima facie evidence of indebtedness.
Issue: W/N an action upon a judgment rendered in the State of Illinois, in which it appears that a
garnishee was summoned in the suit, and paid into court the sum by him disclosed, can be
maintained in this State against the defendant, who was not an inhabitant of that State, and did
not reside there when it was rendered, nor when the original process was commenced upon
which it was founded, but resided then in this State, and had no notice of the suit, and did not
appear and answer to it.
Held: No
Ratio:
1. When it appears that a court rendering a judgment in another State had no jurisdiction of
the parties, it will not be received here as a valid judgment, so as to prevent the
maintenance of a suit for the original cause of action.
2. The only material difference between that case and this, consists in the garnishment and
the payment of the money by the garnishee.
3. The judgment in Illinois might be a protection to him, and the effects of the defendant in
his hands might be lawfully applied in satisfaction of the judgment. But they being
insufficient to satisfy it, the creditor has brought his action upon it to recover the balance.
4. It is not perceived how jurisdiction over the effects, by attaching them in the hands of the
garnishee, could give jurisdiction over the person of the defendant, who was not then
amenable to it.
5. The courts of a State may have jurisdiction over property situate within its limits, so as to
authorize a seizure and sale of such property according to its laws, but the exercise of
such authority does not draw to them jurisdiction over the person of the owner residing in
another State.
6. We do not consider, that the court in Illinois acquired jurisdiction over the defendant, by
summoning the garnishee and the payment of the sum disclosed, so as to enable the
plaintiff to maintain an action on the judgment in this State, and the defendant's pleas are
adjudged good.
Speed v. May
55 Am. Dec. 540
Doctrine: The legal situs of personal property follows the domicile of the owner, and the law of
the actual situs protects the claims of creditors domiciled there, only against transfers by
operation of law; Therefore, a voluntary assignment made by the owner in Maryland who resided
there, passed the property in a claim in Pennsylvania to the assignee, and his right was not
divested by a foreign attachment issued in Pennsylvania subsequent to the assignment. The lex
fori controls the remedy with respect to the personal property, but the law of the domicile
regulates its transfer.
Facts:
1. William Boyer and Jacob Zimmerman, as partners, trading under the name of W. Boyer &
Zimmerman, made a $537.50 promissory note to the order of G. Gundrum. Gundrum
would later endorse the note to Lewis H. Giese and James H. Giese, then partners, and
trading in the name of Giese & Son. Giese & Son was domiciled in Maryland, and the
assignment of the note was also done in Maryland. W. Boyer & Zimmerman is domiciled
in Pennsylvania.
2. Giese & Son later executed an assignment of all their partnership property to Joseph
Speed, including the subject promissory note. The assignment to Speed was also done in
Maryland.
3. An action was brought on the said note by Speed in the Court of Common Pleas of Union
County (Pennsylvania), as assignee of Giese & Son, against said Boyer & Zimmerman,
and a judgment was rendered in favor of Speed.
4. Funds made by a sheriff by virtue of a fieri facias (writ of execution) on the judgment
against the makers on the note were held for distribution to the proper party. Speed,
together with William J. May and Reuben Klose, late partners, trading under the firm of
May & Klose, all claimed entitlement to the funds collected by the sheriff.
5. William J. May and Reuben Klose, as creditors of W. Boyer & Zimmerman and also
domiciled in Pennsylvania, issued a foreign attachment in the Court of Common Pleas of
Union County against Giese & Son, with notice to William Boyer & Jacob G. Zimmerman.
6. The Court of Common Pleas of Pennsylvania entered a judgment, distributing the funds
from the promissory note to May & Klose.
Issue: Whether the voluntary assignment in favor of Speed, made in the state of Maryland, by
residents there, entitle Speed a chose in action (right to sue) locally situated in the state of
Pennsylvania against a foreign attachment, issued at the suit of May & Klose who are citizens of
Pennsylvania, after the execution and delivery of said assignment.
Held: No
Ratio:
1. The voluntary assignment made by Giese & Son in Maryland of the partnership assets to
the Maryland assignee Joseph Speed vested title to those assets, including the note, in
Joseph Speed as against May & Klose.
2. The legal situs of personal property follows the domicile of the owner, and the law of the
actual situs protects the claims of creditors domiciled there, only against transfers by
operation of law; Therefore, a voluntary assignment made by the owner in Maryland who
resided there, passed the property in a claim in Pennsylvania to the assignee, and his
right was not divested by a foreign attachment issued in Pennsylvania subsequent to the
assignment.
3. The lex fori controls the remedy with respect to the personal property, but the law of the
domicile regulates its transfer. It is held that a voluntary assignment in Maryland of
personal property was valid as to a claim in Pennsylvania included within its terms,
though it was not recorded in Pennsylvania, the lex fori.
4. An involuntary transfer of movable property abroad by process at home, does not divest
the title in prejudice of creditors domiciled at the place of the actual situs; but that a
voluntary transfer by the act of the owner divests it everywhere. The legal situs follows
the domicile of the owner, and the law of the actual situs protects the claims of domiciled
creditors there only against transfer by operation of law.
Ingraham v. Geyer
7 Am. Dec. 132
Doctrine: An assignment by an insolvent in Pennsylvania for such creditors as should release

their demands, the surplus to be distributed pro rata among other creditors, was void as to a
creditor in Massachusetts who, after such assignment and notice thereof to a debtor of the
insolvent in Massachusetts, summoned such debtor as a trustee of the insolvent.
As the laws of foreign countries or other states are not admitted ex proprio vigore, but only ex
comitate, the judicial power will exercise a discretion with respect to the laws they may be called
upon to sanction; for, if they should be manifestly unjust, or calculated to injure our own citizens,
they ought to be rejected.
Facts:
1. The defendant represents an insolvent corporation organized under the laws of
Pennsylvania.
2. As the corporation was insolvent, it instituted insolvency proceedings in Pennsylvania,
wherein its creditors would be bound to release it from all claims upon assignment of all
its effects and properties to the former.
3. The plaintiff, a foreign creditor of the corporation residing in Massachusetts, brought suit
in the Massachusetts court against the defendant as trustee of the insolvent corporation
in order to enforce its claim against the latter
4. The defendant raised as a defense the fact that the insolvent corporation had already
transferred all its effects and properties to its creditors in Massachusetts which had the
effect of absolving it from any and all other claims
Issue: W/N the assignment made by the debtor in Philadelphia is valid in Massachusetts, so as
to defeat an attachment of the debt here under our trustee process
Held: No
Ratio:
1. An assignment by an insolvent in Pennsylvania for such creditors as should release their
demands, the surplus to be distributed pro rata among other creditors, is void as to a
creditor in Massachusetts who, after such assignment and notice thereof to a debtor of
the insolvent in Massachusetts, summoned such debtor as a trustee of the insolvent.
2. As the laws of foreign countries or other states are not admitted ex proprio vigore, but
only ex comitate, the judicial power will exercise a discretion with respect to the laws they
may be called upon to sanction; for, if they should be manifestly unjust, or calculated to
injure our own citizens, they ought to be rejected.
3. Even assuming that the assignment made in Pennsylvania is valid and had legal effect so
as to bind its creditors, it does not follow that it is automatically to be given effect here to
the prejudice of creditors who are our own citizens. It is not required by the comity of
nations.
4. To give effect to this assignment, so as to intercept the lien obtained by a creditor here,
under the laws of our own State, when by the effect of that assignment he would be
deprived of all opportunity of participating with the creditors in Pennsylvania in the
proceeds of the debtor's effects, would be an undue partiality towards foreign creditors,
not warranted by the principles of justice, nor required by the comity of nations.
Blake v. Williams
17 Am. Dec. 372
Doctrine: It is a general rule or fiction of law, that personal property is attached to the person of
the owner, and governed by the laws of the place of his domicile. But this rule is subject to
limitations and exceptions. One of these exceptions is the rule, that the lex rei sitæ regulates the
legal remedy.
Facts:
1. Williams (Principal), a banker in England, advanced money to pay a bill of exchange
drawn upon him by Marshall (Trustee), a citizen of this State. Marshall had not, at the
time of being served with the process in this case, remitted funds to replace the money
advanced by Williams.
2. Subsequently, Williams became bankrupt and a commission of bankruptcy issued
against him in England.
3. The commissioners of bankruptcy, under the English bankrupt law, proceeded to assign
over to the assignees, all the property of Williams, including the debts due to him
(including that of Marshall)
4. Before notice of such assignment had reached this country, Blake, a citizen of this state
and a creditor Williams, by virtue of our trustee process, attached the debt of Marshall.
The latter, therefore, was summoned as the trustee of Williams this suit
5. Marshall had received no formal notice of the assignment by the commissioners in
England at the time of his being summoned, but that such notice was however
subsequently given; and the assignees had demanded of him that he should pay over to
them the amount of the debt due from him to Williams.
6. The question to be resolved is whether Marshall, who had been summoned as a debtor
of Williams, should be adjudged the trustee of Williams, the principal defendant, and held
liable to pay over to the plaintiff the amount of the debt acknowledged by Marshall in his
answer to be due from him to Williams.
7. In this case, Marshall admits himself to be indebted to Williams, but objects to being
charged as trustee, on account of the bankruptcy of Williams in England, and the
assignment of his estate and effects by the commissioners appointed according to the
laws of that country, which assignment he supposes transferred this debt to the
assignees, and thus that it is taken out of the operation of our trustee process.
Issue: Whether an assignment of the property of the bankrupt in the United States would be valid
against a subsequent attachment under the trustee process
Held: The attachment was valid, notwithstanding the assignment.
Ratio
1. By our law the service of a trustee process upon one who is indebted to the defendant
(Williams, in this case) in the suit, creates a lien upon the debt in favor of the plaintiff
(Blake) in the action; so that if he recovers judgment against the principal (Marshall, in
this case), he shall have execution against the trustee to the amount of the effects in his
hands, or the debt which he owes, and no distinction is made in the application of this
law, between citizens, who may be trustees of other citizens, and those citizens who may
be indebted to a person residing in a foreign country, who is indebted to citizens of the
United States. Blake, therefore, has a right to an adjudication against Marshall as the
trustee of Williams, unless the bankruptcy and proceedings under it have transferred this
debt to the assignees, so that in effect Marshall was not the debtor of Williams, but of the
assignees of Williams, at the time of the service of the writ.
2. It is a general rule or fiction of law, that personal property is attached to the person of the
owner, and governed by the laws of the place of his domicile. But this rule is subject to
limitations and exceptions. One of these exceptions is the rule, that the lex rei sitæ
regulates the legal remedy.
3. A prior assignment in bankruptcy under a foreign law will not be permitted to prevail
against a subsequent attachment by an American creditor of the bankrupt's effects found
here.
4. Although, by a contract between the principal defendant (Williams) and one summoned
as a trustee (Marshall), money is made payable from the latter to the former in another
state, it may still be attached here by the trustee process.
5. The only operation, therefore, of the law of foreign domicile, is to give the foreign
assignee a right to pursue the remedy afforded by our law for the recovery of his debt. It
is a question exclusively belonging to the lex fori.
6. We do not deny that personal property has no situs and it follows the person of the
owner, and at his death is to be distributed according to the laws of the domicile of the
owner. But the relation of debtor and creditor, and the rights of the latter over the effects
of the former, are distinct objects of jurisprudence within the control of the legislative
power of the country where the property is.This power is absolute and uncontrollable. It
may be unreasonably exercised, but still it is legal, if so willed by a sovereign
independent power, for the dominion is here
Cook v. Van Horn
50 N. W. 893
Facts:
A Wisconsin assignment was held to be valid by the Minnesota courts, though under the
Minnesota statute applicable to Minnesota assignments it would not have been valid,
because the assignee did not reside in Minnesota.
Discussion: The Lex Loci in its application to assignments.
“It frequently happens that among the property intended to be conveyed by an assignment for the
benefit of creditors is comprised of property in other states, or debts due from citizens of other
sates, and it becomes an important subject of inquiry how far the assignment will operate to
transfer such property or protect it from the local remedies of creditors.
“Three different systems of laws may be applied to the determination of questions which thus
arise, namely, the law of the place where the litigation is laid, the law of the place where the
property is situated, and the law of the place where the assignment is made, which are
designated in the books, respectively, as the lex fori, lex rei sitae and lex contractus.
“The General Rule- With regard to all contracts of which the subject matter is personal property,
it may be laid down as a broad general proposition, subject, however, to numerous qualifications,
that their validity I to be tested by the law of the place where the contract is made. If valid there
they will be valid everywhere sustained and foreign tribunals, on principles of international and
interstate comity, will, in determining their force and sufficiency, regard them in light of the law
where they were made.
“On this principle, a voluntary assignment in one state, valid by the laws if that state, would
operate to convey personal property (not already subject to liens) in every state where it might be
found.
“The general principle is not universally true but is subject to several exceptions. The necessary
intercourse of mankind requires, to use the language of Chancellor Kent, that the acts of the
parties, valid where made, shall be recognized in other countries, provided they be not contrary
to good morals nor repugnant to the policy and positive institutions of the state. In the case of
Wieder vs. Maddox the court held in substance that the effect allowed to voluntary assignments in
foreign states is not dependent upon the discretion of the courts of those states. Their validity is
based on the common-law right of an insolvent debtor to make an assignment of all his property
subject to the payment od his debts for the benefit of his creditors.
“In determining what is the lex loci contractus applicable to a given case it is to be observed that
the place where an assignment is executed is the place where it is delivered to and accepted by
the assignee so as to vest title I him; in other words, the law of the domicile of the assignor is not
always the law of the place of the contract.”
Holmes v. Remsen
11 Am. Dec. 269
Doctrine: The lex rei sitae prevails against the law of the domicil, in regard to the rule of
preferences. Whenever a citizen of the country where the property is situated, has demand
against the owner of the property who is domiciled in another country, the property does not
follow the domicile of the owner, but where the properties are found.
Facts:
1. At the time of his death, Isaac Clason, a resident of New York, was indebted to Frederic
Mullet, natural born of Great Britain and Ireland, residing in London, on the balance of an
account.
2. After the sum became due and payable, Mullet was declared bankrupt according to the
laws of England. After the bankruptcy, Mullet assigned all of his personal estate and
choses in action to commissioners in bankruptcy in trust for its creditors
3. The commissioners assigned all of the property estate and choses in action to 3 foreign
assignees. The foreign assignees filed an action of assumpsit against Clason seeking to
collect the balance of the account.
4. Lower court held that the commissioners' assignment under the English statutes of
bankrupts, was merely a statutory transfer, under the municipal law of Great Britain; and
was, therefore, inoperative and void as against an American citizen, an attaching creditor
of the bankrupt residing in the U. S.
Issue: W/N the assignments are valid.
Held: Yes
Ratio:
1. The assignments are valid because it is the English law that should govern since the
properties are located there.
2. In my judgment, the most convenient and practical rule is, that statutory assignments, as
to creditors, shall operate intra territorium only. If our citizens conduct themselves with a
reference to our own laws, in regard to the property of their debtors found within our
jurisdiction, it seems reasonable that they should reap the fruits which those laws
promise to them.
3. This forms a standard of private rights, which all can easily understand and conform to;
but if an attachment against an absent debtors's property found here, may be
superseded by a statutory assignment, previously made at St. Petersburgh or Calcutta,
where the debtor resides, the remedy offered by our Statute becomes illusory and
hazardous.
4. Let each government, in such cases, sequester and distribute the funds within its
jurisdiction, and the general result will be favorable to the interests of creditors and to the
harmony of nations.
5. It is an established and universal rule that, independent of express municipal law,
personal property of foreigners dying testate or intestate has locality. Administration must
be granted, and distribution made, in the country where the property is found; and as to
creditors, the lex rei sitae prevails against the law of the domicil, in regard to the rule of
preferences.
Blanchard v. Russell
7 Am. Dec. 106
Facts:
1. Russell was a merchant in New York City. Blanchard was a merchant in Boston.
2. Blanchard consigned goods to Russell, who thereafter sold them in New York.
3. Because of the consignment, Russell was indebted to Blanchard for a certain sum of money,
starting from 22 April 1811.
4. After the day aforesaid, Russell became insolvent.
5. Pursuant to statutes for the benefit of insolvent debtors passed after the contract had been
entered into, Russell presented a petition to the recorder of the city of New York, praying that
his estate might be assigned for the benefit of his creditors, and he be discharged from all
debts due from him, contracted before or at the time of the said assignment.
6. In consequence of this petition, the said recorder directed an assignment of the estate of
said Russell to be executed to certain assignees, for the benefit of his creditors.
7. Afterwards the said recorder in pursuance of the provisions of the statutes aforesaid, by a
public instrument under his hand and seal, order and adjudge that Russell should be and
was discharged from all debts due from him, contracted at the time of said assignment or
before that time, although payable afterwards.
8. The public instrument was also intended to free him also from all liabilities which he might
thereafter incur or be subject to, by reason of any bill, indorsement, covenant, obligation, or
engagement (other than covenants of warranty on the sale of real estate), which he might
before that time have drawn, made, entered into, or sealed and executed.
9. Subsequently, Russell, being within this Commonwealth, was arrested by virtue of the
original writ in this action.
10. Apparently, Blanchard was not, at the time said debt was contracted, nor has he been since,
within the State of New York. He also did not have any notice of the said assignment, or of
the proceedings subsequent thereto, other than what he may be presumed to have had
under the provisions of the statutes aforesaid. He made no claim, and received no dividend
of Russell’s effects, and did no act approving or assenting to said proceedings.
Issue: Whether a discharge under a bankrupt law of any State can be effectually pleaded in bar
of an action brought in another State, of which the creditor is a citizen.
Held: A discharge under a bankrupt law of any State is a good bar to an action when brought in
another State of which the creditor is a citizen when two conditions are met: (1) the contract was
made within the state which enacted the law and (2) the debtor being there a citizen at the time of
making it.
Ratio:
1. A contract must be construed according to the lex loci contractus. It has been held that a
certificate of discharge under the insolvent laws of this state is a bar to an action by a citizen
of another state on a promissory note expressly payable in this state.
11. A discharge under the bankrupt laws of New York, where the debtor resided, and where the
contract was made and to be performed, is a bar to an action on such contract by the other
party thereto, although he was always a citizen of this state.
12. As the laws of foreign countries or other states are not admitted ex proprio vigore, but only
ex comitate, the judiciary will exercise discretion with respect to the laws they may be called
upon to sanction.
13. If they should be manifestly unjust, or calculated to injure our own citizens, they ought to be
rejected.
14. That the laws of any State cannot, by any inherent authority, be entitled to respect
exterritorialy, or beyond the jurisdiction of the State which enacts them, is the necessary
result of the independence of distinct sovereignties.
15. But the courtesy, comity, or mutual convenience of nations, amongst which commerce has
introduced so great an intercourse, has sanctioned the admission and operation of foreign
laws relative to contracts; so that it is now a principle generally received, that contracts are to
be construed and interpreted according to the laws of the State in which they are made,
unless from their tenor it is perceived that they were entered into with a view to the laws of
some other State.
16. The rule does not apply, however, to the process by which a creditor shall attempt to enforce
his demand in the courts of a State other than that in which the contract was made. For the
remedy must be pursuant to the laws of the State where it is sought; otherwise great
irregularity and confusion would be introduced into the form of judicial proceedings.
Cook v. Moffat
12 L. Ed. 159
Doctrine: A contract, made in New York, is not affected by a discharge of the debtor under the
insolvent laws of Maryland, where the debtor resided, although the insolvent law was passed
antecedently to the contract.
Facts:
1. John L. Moffat, Joseph Curtis, and Jonathan Wilmarth were citizens of the State of New
York and resident there and the defendant was a citizen and resident of Maryland. Cook,
the defendant, used to write to said firm, ordering such articles or goods as he wanted,
and they, said firm, sent them to him, and charged the goods in their books. In order to
settle the account current from time to time, Cook sent to the said firm his note at six
months, and were punctually paid, for a time. Cook at length became embarrassed, and
wanted extensions, until he stopped payment entirely; being then indebted to said firm
2. It is also admitted, that said Cook has applied for and obtained the benefit of the insolvent
laws of Maryland since such notes fell due.
Issue: W/N the bankrupt law of Maryland can operate to discharge the plaintiff from a contract
made by him in New York, with citizens of that State
Held: No
Ratio:
1. Insolvent laws are not in contravention of the constitution of the United States so far as
they operate to discharge the person and after acquired property of the debtor from
liability for any contract made subsequently to their enactment with citizens of the state. A
discharge under a state insolvent law is not a bar to a contract with a nonresident, made
or to be performed out of the state.
2. The constitution of the United States is the supreme law of the land, and binds every
forum, whether it derives its authority from a State or from the United States. When this
court has declared State legislation to be in conflict with the constitution of the United
States, and therefore void, the State tribunals are bound to conform to such decision. A
bankrupt law which comes within this category cannot be pleaded as a discharge, even in
the forums of the State which enacted it.
3. A contract, made in New York, is not affected by a discharge of the debtor under the
insolvent laws of Maryland, where the debtor resided, although the insolvent law was
passed antecedently to the contract.
Wheaton v. Peters
8 L. ED. 1055
Facts:
1. The case arose out of the printing of the Supreme Court's own opinions. Henry Wheaton,
the third reporter of decisions, had compiled with great care the opinions of the Court,
complete with annotations and summaries of the arguments in Court.
2. This was useful material but made the volumes of his reports costly and out of the reach
of most lawyers.
3. His successor as reporter, Richard Peters, in addition to publishing the current volumes
of reports, had gone over his predecessor's work, eliminating the arguments of counsel
and other material beyond the opinions himself, and published an abridged edition
reducing twenty-four volumes into six.
4. The Reporter's salary of $1,000 per year did not cover the full expenses of preparing the
reports, and the Reporters relied on sales of their books to recoup their costs. By creating
more affordable volumes, Peters devastated the market for Wheaton's more expensive
ones.
5. Wheaton sued Peters in Pennsylvania and lost in the circuit court. The judge, Joseph
Hopkinson, ruled that copyright is purely the creation of statute and that one must comply
with the formal requirements for copyright, such as registering the copyright and placing a
copyright notice in the work, in order to receive protection.
6. Judge Hopkinson also ruled that there was no federal common law, that one must look to
the states for common law and, even then, that the states did not necessarily adopt the
entire English common law — assuming there was a common law copyright.
7. Wheaton appealed to the Supreme Court.
Issue: WN the deposit in the office of the secretary of state was a condition precedent or
subsequent.
Ratio:
1. From the authorities cited in the opinion of the Court and others which might be referred
to, the law appears to be well settled in England that since the statute of 3 Anne, the
literary property of an author in his works can only be asserted under the statute, and that
notwithstanding the opinion of a majority of the judges in the great case of Miller v. Taylor
which was in favor of the common law right before the statute, it is still considered in
England as a contentious issue.
2. When a common law right is asserted, we look to the state in which the controversy
originated. When the ancestors of the citizens of the United States emigrated to this
country, they brought with them, to a limited extent, the English common law as part of
their heritage. No one will contend that the common law, as it existed in England, has
ever been in force in all its provisions in any state in this Union. It was adopted only so far
as its principles were suited to the condition of the colonies, and from this circumstance
we see what is the common law in one state is not so considered in another. The judicial
decisions, the usages and customs of the respective states, must determine how far the
common law has been introduced and sanctioned in each.
3. If the common law in all its provisions has not been introduced into Pennsylvania, to what
extent has it been adopted? Must not this Court have some evidence on the subject? If
no copyright of an author, in his wont, has been heretofore asserted there, no custom or
usage established, no judicial decisions been given, can the conclusion be justified that
by the common law of Pennsylvania, an author has a perpetual property in the copyright
of his works.
4. The Court ruled that while the common law protected copyright in unpublished writings
(such as diaries or personal letters), "this is a very different right from that which asserts a
perpetual and exclusive property in the future publication of the work, after the author
shall have published it to the world." McLean declared that post-publication copyright did
not exist in the United States, but only as a function of statute. "Congress, then, by this
act, instead of sanctioning an existing right, as contended, created it." McLean also
rejected Wheaton's contention that requiring registration and the deposit of a copy of the
copyrighted work with the Department of State were improper prerequisite to copyright
protection. Because Congress was granting authors the protection of copyright, it could
require them to observe the statutory formalities. This precedent corresponded to the
English decision in Donaldson v. Beckett, which was cited in the Court's opinion.
5. The Court remanded the case to the Circuit court to determine whether Wheaton had
satisfied the requirements for copyright protection.
Smith v. Alabama
124 U.S. 564
Facts:
1. The Legislature of Alabama enacted a law entitled "An act to require locomotive
engineers in this state to be examined and licensed by a board to be appointed for that
purpose," in which it was provided that it should be: "unlawful for the engineer of any
railroad train in this state to drive or operate or engineer any train of cars or engine upon
the main line or roadbed of any railroad in this state which is used for the transportation
of persons, passengers or freight without first undergoing an examination and obtaining a
license as hereinafter provided."
2. Plaintiff in error was an engineer in the service of the Mobile and Ohio Railroad
Company. His duty was to "drive, operate, and engineer" a locomotive engine drawing a
passenger train on that road, regularly plying in one continuous trip between Mobile in
Alabama and Corinth in Mississippi, and vice versa, 60 miles of which trip was in
Alabama, and 265 in Mississippi.
3. He never "drove, operated, or engineered" a locomotive engine hauling cars from one
point to another point exclusively within the Alabama. After the statute of Alabama took
effect, he continued to perform such regular duties without taking out the license required
by that act. He was proceeded against for a violation of the statute, and was committed to
jail to answer the charge.
4. He petitioned a state court for a writ of habeas corpus upon the ground that he was
employed in interstate commerce, and that the statute, so far as it applied to him, was a
regulation of commerce among the states, and repugnant to the Constitution of the
United States. The writ was refused, and the Supreme Court of the Alabama on appeal
affirmed that judgment.
Issue: Whether or not the Alabama Statute was a regulation of commerce among the states
which must be annulled?
Held: No
Ratio:
1. The grant of power to Congress in the Constitution to regulate commerce with foreign
nations and among the several states, it is conceded, is paramount over all legislative
powers which, in consequence of not having been granted to Congress, are reserved to
the states. It follows that any legislation of a state, although in pursuance of an
acknowledged power reserved to it, which conflicts with the actual exercise of the power
of Congress over the subject of commerce must give way before the supremacy of the
national authority. As the regulation of commerce may consist in abstaining from
prescribing positive rules for its conduct, it cannot always be said that the power to
regulate is dormant because not affirmatively exercised. And when it is manifest that
Congress intends to leave that commerce which is subject to its jurisdiction free and
unfettered by any positive regulations, such intention would be contravened by state laws
operating as regulations of commerce as much as though these had been expressly
forbidden. In such cases, the existence of the power to regulate commerce in Congress
has been construed to be not only paramount but exclusive, so as to withdraw the subject
as the basis of legislation altogether from the states. There are many cases, however,
where the acknowledged powers of a state may be exerted and applied in such a manner
as to affect foreign or interstate commerce without being intended to operate as
commercial regulations. If their operation and application in such cases regulate such
commerce, so as to conflict with the regulation of the same subject by Congress, either
as expressed in positive laws or implied from the absence of legislation, such legislation
on the part of the state, to the extent of that conflict, must be regarded as annulled.
2. There is no common law of the United States in the sense of a national customary law,
distinct from the common law of England as adopted by the several states each for itself,
applied as its local law and subject to such alteration as may be provided by its own
statutes.
3. There is, however, one clear exception to the statement that there is no national common
law. The interpretation of the Constitution of the United States is necessarily influenced
by the fact that its provisions are framed in the language of the English common law, and
are to be read in the light of its history. The code of constitutional and statutory
construction which therefore is gradually formed by the judgments of this Court, in the
application of the Constitution and the laws and treaties made in pursuance thereof, has
for its basis so much of the common law as may be implied in the subject, and constitutes
a common law resting on national authority
4. The statute of Alabama the validity of which is drawn in question in this case does not fall
within this exception. It would indeed be competent for Congress to legislate upon its
subject matter and to prescribe the qualifications of locomotive engineers for employment
by carriers engaged in foreign or interstate commerce. It has legislated upon a similar
subject by prescribing the qualifications for pilots and engineers of steam vessels
engaged in the coasting trade and navigating the inland waters of the United States while
engaged in commerce among the states, Rev.Stat. Tit. 52, §§ 4399-4500, and such
legislation undoubtedly is justified on the ground that it is incident to the power to regulate
interstate commerce.
5. But the provisions on the subject contained in the statute of Alabama under consideration
are not regulations of interstate commerce. It is a misnomer to call them such.
Considered in themselves, they are parts of that body of the local law which, as we have
already seen, properly governs the relation between carriers of passengers and
merchandise, and the public who employ them, which are not displaced until they come
in conflict with express enactments of Congress in the exercise of its power over
commerce, and which, until so displaced, according to the evident intention of Congress,
remain as the law governing carriers, in the discharge of their obligations, whether
engaged in the purely internal commerce of the state or in commerce among the states.
6. No objection to the statute as an impediment to the free transaction of commerce among
the states can be found in any of its special provisions. It requires that every locomotive
engineer shall have a license, but it does not limit the number of persons who may be
licensed nor prescribe any arbitrary conditions to the grant. The fee of five dollars to be
paid by an applicant for his examination is not a provision for raising revenue, but it is no
more than an equivalent for the service rendered, and cannot be considered in the light of
a tax or burden upon transportation. The applicant is required, before obtaining his
license, to satisfy a board of examiners in reference to his knowledge of practical
mechanics, his skill in operating a locomotive engine, and his general competency as an
engineer, and the board, before issuing the license, is required to inquire into his
character and habits and to withhold the license if he be found to be reckless or
intemperate.
7. We find, therefore, first that the statute of Alabama the validity of which is under
consideration is not, considered in its own nature, a regulation of interstate commerce,
even when applied as in the case under consideration; secondly, that it is properly an act
of legislation within the scope of the admitted power reserved to the states to regulate the
relative rights and duties of persons being and acting within its territorial jurisdiction,
intended to operate so as secure for the public safety of person and property; and thirdly
that so far as it affects transactions of commerce among the states, it does so only
indirectly, incidentally, and remotely, and not so as to burden or impede them, and, in the
particulars in which it touches those transactions at all, it is not in conflict with any
express enactment of Congress on the subject nor contrary to any intention of Congress
to be presumed from its silence
Swift v. Tyson
10. Ed. 865
Doctrine: The thirty-fourth section of the judiciary act of 1789, which declares, "That the laws of
the several states, except where the Constitution, treaties, or statutes of the United States shall
otherwise recognise or provide, shall be regarded as rules of decision in trials at common law in
the Courts of the United States, in cases where they apply," has uniformly been supposed by the
Supreme Court to be limited in its application to state laws strictly local: that is to say, to the
positive statutes of the state, and the construction thereof adopted by the local tribunals, and to
rights and titles to things having a permanent locality, such as the rights and titles to real estates,
and other matters immovable and intraterritorial in their nature and character. The section does
not extend to contracts or other instruments of a commercial nature; the true interpretation and
effect whereof are to be sought, not in the decisions of the local tribunals, but in the general
principles and doctrines of commercial jurisprudence. The law respecting negotiable instruments
may be truly declared in the language of Cicero, adopted by Lord Mansfield in Luke v. Lyde, to be
in a great measure, not the law of a single country only, but of the commercial world.
Facts:
1. This action was instituted in the Circuit Court upon a bill of exchange, dated at Portland,
in the state of Maine, on the first day of May, 1836, for $1536.30, payable six months
after date,
a. drawn by Nathaniel Norton, and Jairus S. Keith,
b. upon and accepted by the defendant,
c. the bill having been drawn to the order of Nathaniel Norton,
d. and by him endorsed to the plaintiff.
2. The principal and interest on the bill, up to the time of trial, amounted to $1,862.06. The
defence of the defendant is that the bill had been received by him from Nathaniel Norton,
with another draft of the same amount in payment of a protested note drawn by Norton
and Keith, and which had been paid by him to the Maine Bank.
3. When the draft was received by the plaintiff, it had been accepted by the defendant, who
resided in New York. The plaintiff had no knowledge of the consideration which had been
received for the acceptance, and had no other transaction with the defendant. He had
received the drafts and acceptances in payment of the protested note, with a full belief
that the same were justly due, according to their tenor; and he had no other security for
the payment of the protested note except the drafts, nor had he any knowledge of any
contract or dealing between the defendant and Norton, out of which the said draft arose.
4. The defendant then offered to prove that the bill ofexchange was accepted by him as part
consideration for the purchase of certain lands in the state of Maine, of which Keith and
Norton, the drawers of the bill, represented themselves to be the owners, and
represented them to be of great value, made certain estimates of them which were
warranted by them to be correct, and also contracted to convey a good title to the land.
5. It turned out that all of these representations were in every respect fraudulent and false;
and that said Keith and Norton have never been able to make a title to the lands.
6. The plaintiff, by his counsel, objected to the admission of said testimony, or any
testimony, as against the plaintiff, impeaching or showing the failure of the consideration
on which said bill was accepted, under the facts aforesaid admitted by the defendant, and
those proven by him, by reading said answers in equity of the plaintiff in evidence.
Issue: Whether, under the circumstances of the present case, a pre-existing debt constitutes a
valuable consideration in the sense of the general rule applicable to negotiable instruments?
Held: The evidence offered in defence and objected to, was not admissible as against the plaintiff
in this action.
Ratio:
1. There is no doubt, that a bona fide holder of a negotiable instrument for a valuable
consideration, without any notice of facts which impeach its validity as between the
antecedent parties, if he takes it under an endorsement made before the same becomes
due, holds the title unaffected by these facts, and may recover thereon, although as
between the antecedent parties the transaction may be without any legal validity.
2. In the present case, the plaintiff is a bona fide holder without notice for what the law
deems a good and valid consideration, that is, for a pre-existing debt; and the only real
question in the cause is, whether, under the circumstances of the present case, such a
pre-existing debt constitutes a valuable consideration in the sense of the general rule
applicable to negotiable instruments.
3. The argument on behalf of the defendant is that, since acceptance having been made in
New York:
4. The contract is to be treated as a New York contract, and therefore to be governed by the
laws of New York, as expounded by its Courts, as well upon general principles, as by the
express provisions of the thirty-fourth section of the judiciary act of 1789, ch. 20.
5. And then it is further contended, that by the law of New York, as thus expounded by its
Courts, a pre-existing debt does not constitute, in the sense of the general rule, a
valuable consideration applicable to negotiable instruments.
6. However, the Court went into a discussion of the old and recent rulings of the courts in
New York and concluded that the doctrine is yet to be settled.
7. But, admitting the doctrine to be fully settled in New York, it remains to be considered,
whether it is obligatory upon this Court, if it differs from the principles established in the
general commercial law. It is observable that the Courts of New York do not found their
decisions upon this point upon any local statute, or positive, fixed, or ancient local usage:
but they deduce the doctrine from the general principles of commercial law
8. It is, however, contended, that the thirty-fourth section of the judiciary act of 1789, ch. 20,
furnishes a rule obligatory upon this Court to follow the decisions of the state tribunals in
all cases to which they apply.
9. That section provides "that the laws of the several states, except where the
Constitution, treaties, or statutes of the United States shall otherwise require or
provide, shall be regarded as rules of decision in trials at common law in the Courts
of the United States, in cases where they apply."
10. In order to maintain the argument, it is essential, therefore, to hold, that the word
"laws," in this section, includes within the scope of its meaning the decisions of the
local tribunals. In the ordinary use of language it will hardly be contended that the
decisions of Courts constitute laws. They are, at most, only evidence of what the laws
are; and are not of themselves laws.
11. The laws of a state are more usually understood to mean the rules and enactments
promulgated by the legislative authority thereof, or long established local customs
having the force of laws.
12. The true interpretation of the thirty-fourth section limited its application to state laws
strictly local, that is to say, to the positive statutes of the state, and the construction
thereof adopted by the local tribunals, and to rights and titles to things having a
permanent locality, such as the rights and titles to real estate, and other matters
immovable and intraterritorial in their nature and character.
13. This section, upon its true intendment and construction, is strictly limited to local
statutes and local usages of the character before stated, and does not extend to
contracts and other instruments of a commercial nature, the true interpretation and
effect whereof are to be sought, not in the decisions of the local tribunals, but in the
general principles and doctrines of commercial jurisprudence.
14. The law respecting negotiable instruments may be truly declared in the language of
Cicero, adopted by Lord Mansfield in Luke v. Lyde, to be in a great measure, not the
law of a single country only, but of the commercial world.
15. It becomes necessary for us, therefore, upon the present occasion to express our
own opinion of the true result of the commercial law upon the question now before
us. And we have no hesitation in saying, that a pre-existing debt does constitute a
valuable consideration in the sense of the general rule already stated, as applicable
to negotiable instruments.
16. And why upon principle should not a pre-existing debt be deemed such a valuable
consideration? It is for the benefit and convenience of the commercial world to give
as wide an extent as practicable to the credit and circulation of negotiable paper, that
it may pass not only as security for new purchases and advances, made upon the
transfer thereof, but also in payment of and as security for pre-existing debts.

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A Survey of American Jurisprudence

Ateneo de Manila University- School of Law

Milne v. Moreton 6 Am. Dec. 466...................................................................................................1

Held: The order is affirmed.

Issue: W/N Statute of Illinois is enforceable in California Courts?

1. The assignment made in Wisconsin by the Wilkin Manufacturing Company was

Held: The judgment of the appellate court will be affirmed.

Doctrine: It is recognized that the relation of a stockholder to the corporation is determined by

1. The general rule is that the validity of a contract is to be determined by the

Issue: Which law should apply, Massachusetts or New York law?

Held: The law of New York applies.

Issue: W/N New York Law or Alamba law applies

Held: Alabama rule governs

Issue: Whether Connecticut or New York Law applies.

Held: Connecticut law governs the contract

Issue: Whether Georgia Law or Pennsylvania Law would apply

Issue: W/N English law governs

Issue: W/N the non-forfeiture law of the state of Massachusetts applies

Issue: W/N the Tennessee Law will apply

Issue: W/N the contract was to be governed by the laws of Missouri

Held: The law of the United States

Issue: W/N the second marriage is valid

Issue: W/N the marriage in Michigan may be recognized in Wisconsin?

Held: No, the marriage is not recognized.

Issue: W/N Fenn committed Bigamy

Issue: W/N Texas law applies.

Issue: Which law shall be applied in this case?

Held: The law of Ohio

Issue: W/N the plea of usury is a valid defense?

Issue: Whether the Missouri Act or Illinois Act should be followed

Held: The laws of Missouri will govern.

Issue: Whether or not the US is preferred amongst the creditors

Issue: W/N Lane is liable for polygamy.

Held: Yes. Judgment affirmed.

Issue: Which law will govern the responsibility of the defendant?

Issue: W/N there was a valid siezure

Held: Yes, the law of Oregon applies

Held: No, it cannot.

Doctrine: An assignment by an insolvent in Pennsylvania for such creditors as should release

Held: The attachment was valid, notwithstanding the assignment.

Discussion: The Lex Loci in its application to assignments.

Issue: W/N the assignments are valid.

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