Stacy v. Baker

Smith, Justice, delivered the opinion of the Court:(1) The sustaining the demurrer to the pleas of the defendant, and admitting the assignor of the notes as a witness, are now assigned for error. On the first point, as the demurrer was a general one to the pleas of the defendant, if either of them are good, it follows that the judgment on the demurrer was erroneous. Whatever may be the opinion of the Court on the second and third pleas, they can entertain no doubt of the validity of the fourth. It alleges an entire want of consideration for the notes, and avers that they were made and assigned in Kentucky, and further avers what the laws of Kentucky were at the time of making and assigning of the notes, in regard to the defence set up under this plea. This Court has determined in the case of Bradshaw v. Newman, “ Thát no principle is better settled, than that the laws of the country where the contract is made, shall govern its construction and determine its validity;"(1) and this decision is but in accordance with the acknowledged rule of decision of the courts in the United States. We are equally well satisfied that the fourth plea, setting up a defence under the laws of Kentucky, which was clearly available there, should be permitted in our courts; and that a change of the residence of the defendant has not changed his rights, or those of his representative, under a contract made under and with reference to those laws. The existing laws of Kentucky, at the time of making and assigning the notes, form a.portion of the contract when made, and the liability of the maker should be determined under them. To this both parties assented in making and receiving the notes. The admission of the assignor, as a witness, was contrary to the rules of evidence, and we cannot see how he could be sworn to testify to a single fact, and not be an admissible witness for any other which could be legal evidence in the cause. His interest is apparent; and he seems to have admitted the conclusion of law as to his liability himself. The Court having decided the demurrer erroneously as to the fourth plea, and improperly admitted the assignor as a witness, the judgment is reversed, the cause remanded with instructions to issue a venire de novo, and proceed in the cause. Judgment reversed. Note. See Bayley on Bills 586-590, notes. The endorser of a note is a competent witness to prove whether he endorsed the note previously or subsequently to its becoming due. Baker v. Arnold, 1 Caines 258; Baird v. Cochran, 4 Serg. & Rawle 397; Smith v. Lovett, 11 Pick. 417. In an action by the endorsee against the acceptor of a bill, the drawer or endorser is a competent witness, for the plaintiff to prove his own endorsement. Byles on Bills 237. Note. See 4 Cowen 510, which contains a very able note by the Reporter, upon the subject of the lex loci, and the lex fori. In an action by the endorsee against the endorser of a foreign bill of exchange, the defendant is liable for damages according to the law of the place where the bill was endorsed. The endorsement is a new and substantive contract. Slacum v. Pomery, 6 Cranch 221; 2 Peters’ Cond. R. 351. It is a well settled principle that a statute of limitations is the law of the forum, and operates upon all who submit themselves to its jurisdiction. M'Cluney v. Silliman, 2 Peters 270. The general rule of law is well settled, that the law of the place where the contract is made, and not where the action is brought, is to govern in enforcing and expounding 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. Cox et al. v. The United States, 6 Peters 172. The general principle adopted by civilized nations, is, that the nature, validity, and interpretation of contracts, are to be governed by the laws of the country where the contracts are made, or are to be performed. But the remedies are to be governed by the laws of the country where the suit is brought; or, as it is compendiously expressed, by the lex fori. No one will pretend, that because an action of covenant will lie in Kentucky, on an unsealed contract made in that State, therefore a like action will lie in another State, where covenant can be brought only on a contract under seal. Bank of the United States v. Donally, 8 Peters 361. The law of the country where a contract is made, is the law of the contract,, wherever performance is demanded; and the same law which creates the change, will be regarded, if it operate a discharge of the contract. Green v. Sarmiento, Peters’ C. C. R. 74. The laws of a foreign country where a contract is made, will be regarded by foreign tribunals as to the obligation of the contract, and its discharge ; but as to the mere forms of proceeding, the laws of the country to whose tribunals appeal is made, must govern. Webster v. Massey, 2 Wash. C. C. R. 157. Footnotes [(1)] The facts having been already given, the statement of the case in the opinion of the Court, is omitted. [(1)] Breese 94.