18 F. Cas. 763 | U.S. Circuit Court for the District of Oregon | 1877
This cause was heard on bill and answer. Giving full effect to the denials and statements of the answer, it appears that the plaintiff is a foreign corporation, having its principal place of business in Dundee, Scotland, and bad not, at the date of the transactions involved in this suit, complied with the laws of Oregon requiring a foreign corporation, before doing business in this state, to appoint an attorney authorized to receive service of all process in actions against such corporation (see Laws Or. 1864, p. 617, §§ 7, 8); that in 1874 the defendant Rathburn negotiated a loan of 810,000 with the agent of the plaintiff at Portland, and gave his promissory notes therefor, payable to the plaintiff, with interest, at Dundee, together with a mortgage of certain premises situate in Multno-mah county, executed by himself and wife, to secure the payment of the same; that the notes and mortgage were delivered to said agent, at Portland, who thereupon delivered to the defendant Rathburn, at the same place, the sum of $9,800 and no more. Default being made in the payments of the notes, this suit was brought to foreclose said mortgage and subject the mortgaged premises to sale for the purpose of satisfying the same. Upon these facts, the defendant maintains that the contract of loan is void because (1) it was made in Oregon, contrary to the law of the state; and (2) it is usurious by the same law. On the contrary, the’plaintiff maintains that the contract was made in Scotland, to be performed there, and being valid there, is valid here.
On the facts stated, I am of the opinion that the contract between the plaintiff and defendant Rathburn was made in Oregon, the former acting through its agent at Portland.. If the. defendant had gone to Dundee to procure the loan, or had obtained it through his agent there, the case would have been otherwise. But this transaction took place as a matter’of fact in this state, although it may have been done subject to the approval of the corporation in Dundee. The validity of the contract, so far as the same depends upon the manner of its execution or the capacity of the parties to it to make the same, is to be tested by the law of the place where made, — the lex loci contractus. 2 Kent, Comm. 459. In Re Comstock [Case No. 3,078], it was held by the district court of this district that a foreign corporation had no power to make a contract in this state until it had complied with its laws upon that subject. The contract of loan being invalid, the plaintiff is not entitled to the relief sought.
The fact that this contract is to .be performed in Dundee, — that is, that the notes were to be paid there, — does not make it a contract formed or entered into in Scotland. So far as the payment of the notes is concerned, including the rate and payment of interest thereon, the contract is for that reason to be tested by the laws of Scotland. The parties having provided that this contract should be performed in Scotland, so far as such performance is concerned it is to be governed by the laws of the place of performance, as if made there. Andrews v. Pond, 13 Pet. [38 U. S.] 77. And the fact that the performance of the contract was secured by a mortgage upon real property in this state does not affect the question. De Wolf v. Johnson, 10 Wheat. [23 U. S.] 383. The mortgage is considered a mere incident or accessory of the debt, to be governed by the law applicable to the principal contract. Storey, Confl. Laws, § 304.
Admitting then, for the purposes of this case, that judged by the laws of Oregon this transaction would be usurious, because the sum actually loaned was $200 less than the
