9 Port. 9 | Ala. | 1839
The course of the arguments at the bar, leads us to enquire—
First — Was the plaintiff foreclosed by the judgment on demurrer to his second plea, from introducing evidence
Second — In determinining the question of usury, in the negotiation of the bill, does the law of Alabama, or New York, furnish the rule of decision?
Third — Was the evidence offered to the jury, by the plaintiff in error, to establish usury, — admissible, as against the defendant?
Fourth — Was the law read from the revised statutes of New York, at the instance of the defendant in error, legally admitted in evidence?
First — The second plea, it may be remarked, is objectionable in itself, and does not present, by direct averment, the legal question which the defendant in error proposed to raise. True, it alleges the bill to have been made in New York, but it does not aver that the loan which formed its consideration, was made, or agreed for, there. Resides, the defence of usury, as it avoids the contract, is clearly allowable under the plea of non-as-sumpsit; for which cause, however, a special plea, disclosing with particularity the facts proposed to be proved in the defence, would not be bad, as with us special demurrers are not tolerated.
So that, without passing upon the merits of the de-fence, the Circuit court may have adjudged the second plea (for some one, or all the causes we have indicated,) to be bad.
But, even conceding the plea to have tendered the precise defence, which the plaintiff proposed to make by his evidence, and the judgment on demurrer, did not, of itself, authorise the rejection of the evidence, if it were
In this court, it was assigned for error, that the Cir*-cuit court erred in sustaining the plaintiff’s demurrer to his declaration, because the same court, at a previous term, had overruled a demurrer at the instance of the defendant. The court considered the assignment not well taken, the objection to the declaration on the plaintiff’s demurrer, being presented in a different form, than when demurred to by the defendant.
The court proceed further to remark, that “ it may so happen, where a special plea, containing matter which would be good under the general issue, has been overruled on demurrer, and the defendant offers evidence of the same defence under the general issue; or it may be so, where a motion in arrest of judgment is made, on the same objection to the declaration, for which a demurrer has been overruled ; and, on the same principle, the supposed insufficiency of the declaration, was subject to an independent consideration on the demurrer to the pleas.” The judgment on demurrer, then, interposed no objection to the introduction of the facts disclosed in the plea, as evidence under the general issue. The case cited is decisive of the question, and reason fully warrants the conclusion.
The general proposition, that the laws of a country have no binding force extra territorium, is certainly true; their authority is admitted abroad, not ex proprio vigore, but ex comitate; or, as Huberus expresses it, quatenus sine prcejudicio indidgentum frieri potest — (Story’s Confl. of L. 37; 2 Kent’s Com. 457; Blanchard vs. Russell, 13 Mass. Rep. 6.)
Mr. Justice Story considers that the phrase, “ comity of nations,” is most appropriate, as indicating the foundation and extent of the obligation of the laws of one nation within the territories of another. The extra-ter
The principle upon which one State recognises and applies the laws of another, relative to contracts, results from the courtesy, comity, or mutual convenience of nations, between which commerce has introduced dealings. In fact, the necessary intercourse of mankind, requires that the acts of parties valid where done, should be re-cognised in other countries, provided they be not contrary to good morals, or repugnant to the policy or positive institutions of the State — (2 Kent’s Com. 454; 13 Mass. R. 6; 4 Cowen’s R. 511, et post in note, and case cited j Story’s Con. of L. 232 to 248; Goodman vs. Munks, 8 Porter’s R. 84, and cases there cited.)
And we understand the doctrine to be settled, that personal contracts are to have the same validity, interpretation and effect, in every other country, which they have in the country where they were made, or are to be performed. Parties are presumed to be conversant of the laws of the country in reference to which they contract, and to stipulate with regard to them; and it is a maxim, that locus contractus regil actum, unless the parties
In regard to the lex loci, when the contract is- silent as to the place of performance, there is but little difficulty in determining what law is to govern-; but when its performance is contemplated in another country, questions the most embarrassing arise — (2 Kent’s Com. 455, 459; Story’s Con. of L. 9, 10, 25, 29, 303, 307; 4 Cow. R. 510, note a.) In stating the general rule, as applicable to the latter description of contracts, there is but little difference in the books,
Mr. Chancellor Kent says, “ If a contract be made under one government, and is to be performed under' another, and the parties have in view the laws of such other country, in reference to the execution of the contract, the general rule is, that the contract, in respect to its construction and force, is to be governed by the law of the country or State, in which it is to be executed” — (2 Kent’s Com. 459.)
Mr. Justice Story expresses himself on the subject thus: “ Where the contract is either expressly or tacitly to be performed in any other place, there, the general rule is in conformity to the presumed intention of the parties,— that the contract, as to its validity, nature, obligation and interpretation, is to be governed by the law of the place of performance” — (Story’s Con. of L. 333.)
In Blanchard vs. Russell, (13 Mass. R. 4,) in an elaborate examination of the lex loci, the court remark, “ that it is now a principle generally received, that contracts are to be construed and interpreted, according to the laws
Having taken this brief view of the general doctrine of the lex loci, we proceed to a more particular examination of the question before us. It is clearly inferable, from what has been already said, that where parties enter into a contract, without any stipulation for interest, but upon which, on default of prompt payment, interest accrues, its rate must be admeasured by the scale prescribed by the laws of the country where the contract was made; unless the parties contracted in reference to another jurisdiction — in which case, the law of the place of payment .will ascertain the quantum of interest. This proposition is conceded by the counsel for both parties; but the counsel for the plaintiff insists, that where the 'parties themselves have stipulated a particular rate of
To sustain this argument, we have been referred to the case of Depau vs. Humphreys, (8 Martin’s Rep. 27, 28.) In that case, the very point came directly in judgment, and is most elaborately and learnedly considered, with a review of many authorities, deduced both from the civil and common law. The learned judge who pronounced the opinion of the court, after remarking that the legal rate of interest, is the measure of damages in obligations to pay money — that the Roman law did not contemplate interest as a profit, at the time of the contract, but only as a consequence resulting from a delay of payment; and that therefore it was regulated,— by the lex locus desiinatce solutionis, proceeds as follows: “ But in a loan of money, nothing is more common, in countries where the parties are not restrained by law to one rate of interest, to stipulate a particular one, (by their convention,) wrilhin the scope of which the law allows ; and this interest is called conventional, by contradistinction from the legal interest ex mora.
“ In such a case as the object of the conventional interest, is to afford to the lender a compensation for the profit he foregoes, in yielding the use of his money to the borrower, it should seem that the circumstance of the place of payment, differing from that in which the lender parts with his money, ought to have no influence in the fixation of the rate of interest.” The learned judge then refers to previous decisions, in which that
In treating of the question before us, Mr. Chancellor Kent employs this language: “If interest be not stipula
Mr. Justice Story, in an examination of the lex loci, in respect to foreign contracts, thinks that Mr. Chancellor Kent, in the citation we have made from his Commentaries, has correctly laid down the modern doctrine, and is fully borne out by the authorities — (Story’s Confl. of L. 253.) But the learned judge is of opinion, that the case of Depau vs. Humphreys, is not a correct ascertainment of tile law,, even upon the authority of foreign jurists;
The le'arned judge, in supposing that the Supreme court of Louisiana considered it necessary to the defence of usury, that both the lex loci celebratus and th'e lex loci solutionis should be violated, fell into an error. We have examined the opinion most carefully, and according to> our understanding, the court intended to say, and have, in effect, so said, that there is one locus contractus, so far as it relates to the mode of construeing them, (contracts) the meaning to be attached to the expressions by which the parties' bound themselves, and the nature and validity of the engagement.
There is another locus contractus, as it respects “ the
Mr. Justice Story, in the section immediately following that we have quoted, admits that there may be two- loci contractus in some sense. “ There is no doubt,” says he, “that the phrase lei; loci contractus may have a, double meaning or aspect, and that it may indifferently indicate the place, where the contract is actually made, or that where it is virtually made according to the intent of the parties, that is the place of performance. Everard, as well as other distinguished jurists,' refers to this distinc-. tion. Voet places it in a strong light” — (Story’s Confl. of L. 248; see also 195.) The learned author then examines the works of some of the foreign jurists on the
We have already seen, that Mr. Justice Story affirms the correctness of the rule, in regard to conventional'interest, as stated by Mr. Chancellor Kent, but it does not appear (as argued for the defendant in error,) that the latter approves the criticism of the former, upon the Louisiana decision. Ail that is said in relation to it, is found in a note, in these words: “The decision, in this case* is accompanied with a full discussion of the authorities in the English and American Law, and of the opinions of the European continental civilians. The law of this case has been critically examined by Mr. Justice Story, (Com. on the Confl. of L. 248, 254,) and he does not think that the foreign jurists bear-out the case” — (Note a 2, Kent’s Com. 460.)
We have noticed thus at length, the arguments and conclusions to be found in the Conflict of Laws, because they were much relied on for the defendant, and for the additional reason, that we desired lo place them in juxia■* position with the opinion in Depau vs. Humphreys, that it might be seen the learned author did not differ so widely from the court in that case, as he himself supposed.
We now dismiss the authorities, to consider, for a moment, the transaction in New York, in reference to the reason and nature of the thing. The evidence upon the record informs us, that the bill was drawn, indorsed and accepted in New York, to enable the drawer to raise money — that its consideration was a loan of money made to the plaintiff in eiror by II. M. Andrews &Co.-—
Even conceding that the stipulated place of payment, shall determine the validity of a contract, it is difficult to conceive how the law of that place can operate upon a bill of exchange, so long as it remains in the hands of the party for whose accommodation it was made — before he has actually negotiated it. Until then, no legal liability is incurred by the parties to it, but it is only*when put forth into the world, that it becomes an effective security for money. So long, then, as the bill in question remained in the hands of the drawer, it was not an operative contract. Messrs. Andrews & Co. became its proprietors, by lending to the plaintiff a sum greatly below its nominal amount, and in this it is alleged the usury consists. The payment of the money under the agreement for a loan, and the transfer of the bill, must be regarded as simultaneous acts, the former being a consideration for the latter ; so that if the one be illegal, the other imposed no obligation in law. This, to us, would seem to be the deduction of reason — and though perhaps we might rest our opinion opon higher and less disputable ground, we are prepared to affirm it to be law.
The purchase of the bill was complete in New York; - — the interest upon the loan was there paid, or retained, which is the same thing, so that from the proof in the record, there is little pretence for saying that the plaintiff, or H. M. Andrews '& Co., had in view the law of Alabama, in respect to the interest charged upon the loan.
The bill expressing on its face the place of payment to be in Alabama, is not conclusive to show that the parties contracted in reference to the interest prescribed by the law of this State. In the absence of proof aliunde, such would be its effect, but extrinsic proof is clearly admissible to explain the intention of the parties. Reason, and the analogies of the law, authorize it. And in Thompson vs. Powles, (2 Simons’ R. 194,) the Tice Chancellor shows, that it is permissible to look beyond the contract itself. If the law were otherwise, the statute against usury in force, in the locus celebratus contractus¡ might be avoided with impunity, at pleasure.
In citing, with approbation, the rule as laid down by the learned commentator on American law, we do not desire to be understood as either repudiating or approving the case of Depau vs. Humphreys. We regard the authority of both as adverse to the defendants in error,
We decline expressing any opinion upon the question, how far the difference of exchange between New York* and Alabama, in favor of the former, can countervail the defence of usury, as interposed by the plaintiff in error, inasmuch as it is not necessary to a decision of the case by this court, and because a question precisely analogous (it is said) to that presented by the record, is destined soon to undergo an examination before the Supreme Court of the United States.
Third — This question was directly raised in Hacltley VS. Sprague, (10 Wend. R. 113.) That was an action by the indorsee of a promissory note, against the maker, and it was objected, that under the latter part of the fifth section of the interest act, as contained in the NevV York revised statutes, the defence of usury was not al
Thus, we discover that it is incumbent upon an indor-see, if he would prevent usury from being set up against him, to show that he became the innocent holder of the paper, for a valuable consideration, before its maturity. Nothing of this kind seems to have been shown or attempted by the defendant in error.
Fourth — The statute of New York, which was read to the jury by the defendant, was contained in a book, printed and published under the authority of that State. According to the law, as admitted in this State, the act of Congress of May, seventeen hundred and ninety, has not been considered as excluding all other modes of authenticating the acts of the Legislature of a sister State, but the statute book has been received as evidence of them,
There was, then, no error in admitting the statute of New York to be read to the jury — but for the rejection of the evidence offered by the plaintiff in error, the judgment of the Circuit court is reversed, and the case remanded.
Note. — The case alluded to is Andrews vs. Pond, et al. IS Peters’ Rep. —. This case sustains our opinion on the main question, viz., that the law of New York is the criterion by which it is to be ascertained, whether the contract is usurious. The court also determine, that on a loan of money in New York, to be repaid in Alabama, it is allowable for the lender to reserve the market rate of exchange, in addition to legal interest, though it may exceed the cost of transportation of specie, insurance, &c., if the reservation be made bona fide, and hot with intent to evade the law against usury