Nash v. Tupper — 1 Cai. 402

Majority

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Nash against Tupper.

Headnote

On foreign contracts, our statute of limitations is a good plea.

This was an action on two promissory notes, made in the state of Connecticut, and dated 28th November. 1791.

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The plaintiff declared in the common manner, adding a count for money had and received.

The defendant pleaded non assumpsit and actio non acerevit infra sex annos.

The plaintiff replied specially, as follows: “ And the said William, by his attorneys aforesaid, says, that he, by anything by the said Samuel above secondly in pleading alleged, ought not to be barred from having and maintaining his action thereof, against the said Samuel; because *he says, that the two several promissory notes, [*403] mentioned in the two first counts of his, the said William’s declaration, were made and given by the said Samuel to the said William, and that the cause of action in the two first counts of the same declaration mentioned, arose within the limits and jurisdiction of the state of Connecticut, and was contracted with reference to the laws and customs of the state, to wit, at Whitestown,‘in the county of Oneida; and the said William says, that by an act of the legislature of the state of Connecticut, entitled, An act for the limitations of prosecutions in divers cases civil and criminal, amongst other things it is enacted, That no suit, process, or action shall be brought on any bond, bill, or note under hand, given for the payment of any sum or sums of money, not having any other condition, contract or promise therein, but within the space of seventeen years then next, after an action on the same shall acrue. And the said William avers, that by the law of the said state of Connecticut above recited, the said William, at the time of exhibiting his said bill against the said Samuel, to wit, on the nineteenth day of January, in the year of our lord one thousand eight hundred and two, had a good and sufficient cause of action against the said Samuel, as contained in the two first counts of this said declaration, and this he is ready to verify; wherefore he prays judgment if he ought to be barred from having and maintaining his said action thereof against the said Samuel; and the said William here freely in court confesses, that he will not further prosecute his action against

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the said' Samuel, of, and'upon the third count in his declaration aforesaid, but doth absolutely disavow and refuse to further prosecute of and upon the said third count of hig said declaration against the said Samuel.”

General demurrer inde, on which it came before the court

Emott, for the defendant.

*From the facts contained in the replication, it will be seen that the present question really is, how far the laws of Connecticut shall control the operation of those of our own state. The contract is set forth not only to have been made in Connecticut but to have been there made with a reference to the statutes there in force, and, therefore, that the seventeen years’ limitation of the right to sue formed a part of the contract. Therc%an be no hesitation in allowing that the lex loci shall regulate, when we are to decide on the validity of a contract. Our statute of limitations is, “ All actions upon the case,” &c. shall be commenced within six years after the cause of action accrues, excepting in those cases contained in the proviso; and, .to be entitled to the benefit of this, the plaintiff must show that he comes within it. He should have gone further; in addition to the contract being made in Connecticut he ought to have shown that the defendant continued to reside there till within the last six years. By the English statutes, the absence of the plaintiff takes the case out of it; with us, it is only that of the defendant;^[3] and, therefore,- a suit may be brought here when it could not there. This greater strictness in denying the effect of the proviso to absent plaintiffs, will make this court less inclined than even the English to extend the saving of the statute. If therefore, the statute would be a bar in England, a fortiori, in the state of New York. In Robinson v. Bland, Black. 241, it is acknowledged that the statute of limitations may be pleaded to a foreign contract. The words of Blackstone, J. in that case, are,

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“ The statute of limitations has been frequently allowed to operate on transactions abroad.” And, in the same book, p. 257, Mr. Wedderburne, in his reply, admits this; but observes, that it runs only when both parties are in England It does not affect the validity of the contract, but only the mode of recovering on it, that is, it goes only to the remedy and not to the right.

This case, therefore, is inapplicable to the *rules [*405] laid down respecting the lex loci. The general one, as given by Lord Mansfield, ibid. 258, is, that the law of the place where the action is brought, is to be considered in expounding and enforcing the contract. To the same effect is Duplein v.De Roven, 2 Vern. 540. In 2 Kaimes,353,3d edit, it is, on this subject, said, “ Several questions arise from the different perscriptions established in different countries. In our decisions upon this head, the case is commonly stated as if the question were, whether -a foreign prescription, or that of our own country, ought to be the criterion. This should never be. made a question ; for our own prescription must be the rule in every case that falls under it, and not the perscription of any other country.” Admitting, therefore, fully the lex loci in expounding contracts, this is not a case of exposition, and does not, therefore, come with-' in those authorities. Lodge v. Phelps, 2 Caines’ Cas. in Err. 321. S. C. 1 Johns, Cas. 139 , is a case in our favor. There the endorsee of a Connecticut note was allowed to proceed in his own name against the endorser. This goes to show that in all cases where the question turns on the form of action, the law of the country where the defendant is found, and not that where the contract was made, ought to prevail. Therefore, as it is not shown that Tupper was out of the state till within six years, the suit cannot be maintained.

Gold, contra.

By the pleadings in the case, the truth o, which stand confessed by the demurrer, the court will find that the defendant entered into the contract with a refer

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erice to the laws of Connecticut alone. It must have been intended, then, that the rules of those laws should be exclusively resorted to, as the measure of justice between the parties. By the code, ordained as the law of Connecticut, obligations by specialty, and simple contract demands, are placed on the same footing. When, therefore, in that state, a note of hand is taken, the creditor takes, and the debtor gives, the same security as would be created here by a specialty, or sealed obligation. As they are thus equal in their nature, the statute of limitations couples them together, and one uniform rule applies to both. If, then, the [*406] creditor *regards the continuance in his debtor of the duty to pay on every specialty which is taken, both parties imagine, and agree, that there is, for seventeen years, a continual obligation to satisfy the demand whenever called on. When the debtor executed these notes, he consented to-be bound for payment of their several amounts, and so to continue for seventeen years; during that period, it is a further part of his agreement, that no presumption of payment shall be made. It is on this presumption of payment that every statute of limitations is founded. Therefore, a promise to pay, as it rebuts the presumption, and shows the debt has not been paid, is allowed on all hands to take the case out of the statute.^[3] No

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thing, then, can be more fairly inferred, than that the debtor has consented that these securities should create an obligation for seventeen years, and that, during such time, the

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creditor might safely repose upon them. But a distinction is taken between the contract and the remedy; that the former may remain- when the latter is lost. This is like taking from the shipwrecked his plank, with a profession that you do not mean him to drown. When a man takes a security, he looks to the period for which his debtor is obliged; thinks it shall last till then, and with a view to that it is taken. In Connecticut, the state has put notes and bonds on the same footing; but when the creditor comes to New York, he is told they consider the contracts of a different nature, and what he took as a specialty shall be no more than a simple contract. What is this but to expound the lex loci contractus, according to the law of the lex fori. There is no decision exactly in point, no judical determination ; but the following authorities may, more or less, bear on the subject. This is a mere question of exposition; or, how the parties contracted ? In support of the fee loci con

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tractus, 2 Fonb. 442, cities from Hub. Frail, tom. ii. 1. 1, tit. 3, the passage at full length. There, after laying it down that the laws of a state are properly confined to transactions within its limits, Huberus says, that in case of a conñictus legum, or variance of the laws of different countries, the laws of that where the contract is made shall prevail, with the exception of cases where, in the contract, a reference *was had to the laws of another [*407] state. So, a marriage contract made in France, shall be carried into effect in England, according to the laws of France, though contrary to the laws of England. Feaubert v. Turst, Prec, in Chan. 208. So in Alves v. Hodgson, 7 D. & E. 241, the court of K. B. refused to receive in evidence a note given in Jamaica, and not stamped according to the laws of that island. The same principle is acknowledged in Wright v. Null, 1 H. Black. 148,149, where it was ruled, that the laws of Georgia, on a question of confiscation, were to be regarded in Westminister Hall as much as in Georgia, whatever might be the opinion of the court as to their policy. To the same effect may be cited Burrows v. Jemino, 2 Stra. 732; 5 Vin. Apr. 511, pl. 22, and in Jewson v. Reed, Loft’s Rep. 138, Lord Mansfield says, a contract made in France must be governed by the laws of France, A further authority, if the credit of the reporter will make it so, is from the same book, Crawford v. Witten, 154, where, to an action of debt on a- judgment of the mayor's court of Calcutta, it was admitted, that the statute of limitations of the lex fori was not pleadable to foreign contracts. In that case, Mr. Justice Aston observed, that an action must be determined by the laws of the country in which the action accrued. But the next case which will be relied on, goes to the very remedy. It is that of Melan v. The Duke de Fitzjames,^[3] 1 Bos. & Pull.

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138, in which the court determined that a man cannot be held to bail in England, upon a contract to pay money, made in France, if, by the laws of that country, his person is not there liable to be restrained for the debt. And in order to prove that such was the case then in dispute, Pothier on Obligations, and an affidavit of a counsellor of Paris, were received as evidence. Here the remedy alone was the point in question; as the laws of the community where the debt arose gave no lion on the body, it was disallowed in a case where, by the English code, the defendant was immediately liable in his person, and might be held to special bail. The English bench, against the course of their own court, and against the laws of their own land, adopted those of France, in determining the extent [*408] *to which a debtor had' pledged himself by his engagment. Chief Justice Eyre, in giving his opinion, fully adopts the doctrine of the lex loci, and observes, whatever would constitute a defence to the action in France, would in Westminister-Hall. The reverse of this must be equally true ; what is no defence in Paris, will be none in ■ London. This however, is now denied, and while the lex hci contractus is admitted to create the contract, yet it is attempted to interpose the lex fori to protect the debtor, under the idea of the laws of the jurisdiction affecting the remedy but not the contract. It is, with due submission, imagined, that the defence set up by the opposite party attached on the contract, and made a part of it. It is of the utmost importance, that a creditor should know how long he may repose on his security, without its being presumed that it has been paid. In this state, by taking a bond, he would have intended to protect himself against this presumption

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for twenty years. To create an equal bar to presumption, such as an obligation would have inferred, must have been in the contemplation of the parties in Connecticut; because the law gives the security taken the same advantages. If the maker and payee had, in Connecticut, been asked to expound their own contract, they would have said, it is to last and continue, firm and good, against all presumption, for seventeen years. This, then, attaches itself to, and is an integral part of, the original contract, and, therefore, repels the bar growing out of a foreign jurisdiction, our statute of limitations pleaded in bar. If the act did not operate on the contract, but merely suspended the remedy, it would be matter of abatement, not bar; because bar goes to the right, not to the remedy; and the statute presumes payment made: therefore, the judgment is in chief, and exhaust the debt, which becomes, as it were, dead. If the defendant meant to avail himself of our limitation act, he should have stated that the notes were made with a reference to our laws, or at least, should have gone on to set forth his own residence for six years last past. The court will refer to the pleadings, and see that they show the lex loci contractus to have attached on the contract; and if the ^residence of the defendant would af- [*409] feet the question^ that circumstance should have been specially set forth to exonerate him from the operation of the laws of Connecticut. In the case of Phelps, the court guarded against the conclusion that might be drawn against hx loci contractus; and the courts of Connecticut have allowed the endorsee of a Hew York note to prosecute in his own name, giving thereby a remedy according to the hx loci, which would have been devised by the lex fori. Let us, for one monent, advert to the consequences of refusing to adopt the. principles for which we contend. The laws of many states place simple contract debts on very different footings: one fifth of the money lent out may be advanced on securities like those on which the present action is grounded. These, after six years, are here

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presumed to be paid; suppose the maker of anote removes to Connecticut, it will be in vain that he will say, by the laws of New York the debt is barred ; the creditor will proceed and recover, when, in the country where the whole transaction took place, he could never get a shilling. If this rule is to prevail, a creditor has only to watch his passing debtor, arrest him in transitu, and attain payment long after every hope was, by law, and the implied basis of the contract, totally gone. The court, therefore, will be cautious in making a decision, which, by rejecting the laws of a foreign state, in expounding the terms of a contract made •there, becomes a necessary precedent to that state, in regulating the j ustice it is to measure out to the people of New York, which will, out of the limits of New York, create a •seventeen, instead of a six years’ limitation. One contract may, by this means, have a dozen different interpretations: a debt is contracted in New Hampshire; the debtor comes here, and a six years’ quiescence discharges him; he goes to Connecticut, and the debt revives; according as the limitation is long or short, he by his own act, settles the period of his creditor’s demand. It is impossible to deny him this power, if the intention of the parties to the contract, and their resulting duties, arising from a reference to the laws of the country where that contract was made, are to be departed from: for, instead of placing the agreement [*410] *on those resulting duties, and the basis contemplated by the parties, it leaves that, and the duties to which they bind themselves, to the sport and control of the most contingent and capricious events; to the debtor’s locomotive will; to the laws of any and every- state or kingdom in which he may from time to time erect,, from among all the nations of the earth, to take up his residence. Instead of one plain and uniform rule of construction, what an endless and perplexed confusion is suggested ? ' A suggestion which fixes nothing, but unsettles every thing; which renders every judgment insecure, and all suits every thin g but final. Such must be the consequence, though it

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may be attempted to show the contrary by refined distinctions between the remedy and the contract.

There is another point of view in which this case may be presented. Among the nations of Europe, a principle of comity has introduced a respect for each other’s laws and constitutions. Between the individual states which compose the union it is submitted, whether there is not a far more cogent reason to respect; even as a bond to preserve the federal government.- There is a part of the constitution by which it is created, that ordains, “ Ho state shall pass any law impairing the obligation of contracts.’-' Does not this impose on the court an additional obligation to respect the laws of a sister state, in the exposition of a contract made there, more than what arises from the mere comity of nations? If the court will apply a principle drawn from the laws of their own state,- contrary to those of Connecticut, and not contemplated by the parties to the contract when it was made, do they not impair the force of obligations? Besides, under this' construction, full faith cannot be given to the judical claims of the citizens of different states. This is mentioned merely as a feature in the constitution, to show with how much circumspection the court ought to proceed. Suppose the case had arisen in a court of the United States, that a Connecticut creditor, on a contract made there, had sued a Hew York debtor, can it be supposed that there would have been the hesitation of a moment in adopting the lex loci contractus, the laws of Connecticut? *It is submitted whether an [*411] act of this state, which should abridge the period given by a foreign contract to a creditor, within which he should not be obliged to demand his debt; which should deny him the right to have recourse to his contract for any part of the time which was allowed by the laws of the state where it was made, it is submitted, I say, whether such an act would not, under the constitution, in the extensive sense of the terms, impair the obligation of the contract.

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Mnott, in reply.

An objection has been raised against the force of our plea of the statute of limitations, from a clause, or part of a clause in the constitution of the general government; that no act shall be passed to impair the obligations of contracts. From the use made of this passage, it will follow that all statutes of limitation must invariably remain as they nów are, and that no state can ever lengthen or shorten the period; because that would be to impair the rights of others, in existing obligations. The meaning of the words are, that no state shall pass laws tending to impair- the validity of contracts made in other states. The argument on the part of the plaintiff seems to suppose, that if the statute be allowed, the debt cannot be recovered. Hot so ; the contract remains as it was ; all that is said by us is, that when attempted to be enforced against our laws, they interpose; but if it be carried back to Connecticut, then our statute, or a judgment under it, is of no avail. The security was taken, subject to any variations the state in which it was given might make; and also to such as any other might adopt, where it should be put in suit. A fter the defendant has resided six years in this state, the statute attaches wherever the contract was made. For the words of the act are direct and positive. “ Ho action shall be commenced,” &c. without reference to the citizens of this or any other state. Under the letter and spirit of the act, the suit ought to be brought within six years, or the plaintiff should show himself within the proviso. If. the legislature choose to pass a law, the court cannot say they hava no right to do so; and it is to be observed, that this [*412] statute is only a continuance of a'*former act. Allowing the defence, does not deny the contract; on the contrary it admits but avoids. We say, you have brought your suit here, and all that you can claim is the benefit of those laws to which you choose to resort.

delivered the opinion of the court. This

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is an action of assumpsit on two promissory notes made by the defendant to the plaintiff.

The question arising on the pleadings is, shall the lex loci contractus govern, or shall it not ?

It is a well settled rule, that contracts, with a few exceptions, are to be construed according to the laws of that country, in reference to which they are made. But it is equally well settled, that the remedy on them must be prosecuted according to the laws of that country in which the remedy is sought. In the case of Duplein v De Eoven, the. cause of action arose in France; it was on a judgment obtained in that country. The defendant pleaded the statute of limitations, and held a good bar to the action.

In Lodge v. Phelps, decided in October term, 1799, it was held that though promissory notes, made in Connecticut, were not thére negotiable, they might be negotiated here, and a suit maintained on them in the name of the endorsee. For that the principle of the lex loci shall not affect the form of action, but shall have reference only to the nature and construction of the contract, and its legal effect; not to the mode of enforcing it.

In a much earlier case, viz. that of Page and Cable, decided in this court, in April term, 1795, the precise question now before us came under consideration. It was an action of assumpsit, on a promissory note made in Connecticut, by George Cable, to Jonathan Cable the defendant, and by him endorsed to David Page, the plaintiff. *The whole transaction took place in Connecticut. [*413] The plaintiff declared, first, under our statute, as endorsee ; secondly, on the endorsement as a speci al agreement; setting forth the contract as originating in Connecticut, and the defendant as guarantying the payment by George Cable, and on his default engaging to pay for him.

The defendant pleaded the statute of limitations of this state, and the plaintiff demurred, alleging for cause, that no such statute existed in Connecticut, where the cause of action arose.

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The court said; that the defendant having elected to prosecute his suit in this state, he must pursue his remedy agreeable to our law's, and that our courts could not dispense with an adherence to the requisites of time, place, and manner of commencing and prosecuting a suit, because the cause of action arose in another state. They conceived, that such adherence by no means impaired the obligation of the contract, and they gave judgment for the defendant. The correctness of those decisions I feel no disposition to controvert, but conceiving the law on the point as settled, we are of opinion judgment must be for the defendant, and with this opinion the Scotch and Dutch laws accord, as will appear from Erskine’s Institutes, vol. 2, 581, 582 ; Kaime’s Equity, vol. 2, 358 ; Huberi PrselectioneS, vol. 2, book 1, tit. 3 ; De Conflicto Legum, sec 7.^[1]

No other question occurs-on this case than whether we are bound to enforce the limitation enacted' by a statute of our own state, or allow the plaintiff the same time as he would have had before a tribunal in Connecticut ?

*In the exposition of foreign contracts, courts take notice of the laws of the state in which they are made, or manifest injustice would ensue. This is a dictate of common sense, and is become a principle of general law. In suits on contracts made abroad, the parties in their pleadings must observe the forms of the country where the action is depending; but in deciding on the merits, the lex loci will be the rule. This distinction is found in the Roman and French law, and Emerigon speaks of it as adopted by all elementary writers.

“Pour tout ce qui concerne l’ordre judiciare, (or form of action,”) says that author, “on doit suivre l’usage du lieu ou l’on plaide, mais pour ce qui est de la decision du

[1] [1] See Benjamin v. LeGroot, 1 Denio, 157 ; Bandall v. Willcins, 4 Denio, 577 ; Fowler v. Bunt, 10 J. R. 464; Lincoln v. Battelle, 6 Wend. 475 ; Bugglu v. Keeler, 3 <T. R, 263.

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fan, (or the merits,) on doit suivre, en regle generale, lea loix du lien ou le contrat a etc passe ex consuetudine ejus regioriis in qua negotium gestum.”

Another author on the same subject, holds, nearly the same language. In his quae respiciunt litis decisionem, sérvemela est consueiudo loci contractus. At in his quoe respiciunt litis ordinationem, attenditur consuetudo loci ubi causa agitur.

Emerigon also mentions an instance of a suit between two Englishmen in France in which the plaintiff insisted on proving by witnesses a paroi contract for a loan exceeding one hundred livres. The defendant pleaded an ordinance, resembling in some respects our “ Act for the prevention of frauds,” which required contracts of that amount tó be in writing, and no other proof was to be received of it but the instrument itself. The parliament -of Paris, however determined, that this being a valid contract in England, when it was made, the ordinance did not apply, t,.id the plaintiff recovered. “II fut juge, (says the autnor who reports this decision,) par le parlement de Paris, que l’crdonnance n’avait point lieu, d’autant qu’ elle va ad litis decú sionem” or to the gist of the action. Traite des Assurances, c. 4, s. 8.

On. a point of general law, where w& have no rule to the contrary, I cannot well err in conforming to one which we find adopted by a foreign tribunal, heretofore among *the most distinguished in Europe, for the [*415] purity and wisdom of its decimons; a necessary consequence of the great learning, integrity, and independence of its judges. But ¡he same rule, I conceive, prevails here. A note bearing ?. yearly interest of more than 7 per cent, if made abroad and lawful there, may be recovered here, notwithstanding our statute against usury. I see no reason why the same respect should not be paid to the limitation acts of another state. Our statute against usury is quite as imperative in avoiding the security, as that which prescribes the time after which a suit shall not be brought; yet courts have invented, or sanctioned, several

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.exceptions, not within its provisions, to prevent a failure .of justice. Thus, an acknowledgment of the debt has defeated its operation, or arrested its course. Why, then, not regard an exception created by the parties themselves, which must be presumed to be the case whenever they contract, with a view to a different limitation ? ISTo violence is done to our law, by permitting .them to establish for themselves, a rule different from that which would take place in case of their silence. If the defendant had agreed in writing not to avail himself of the statute of limitations of this state, if the suit were commenced in seventeen years, a doubt can hardly be entertained of our giving effect to such an agreement. I perceive but little if any difference between a written contract of this kind, and a case in which the defendant must be presumed to have had in his eye, the laws of his own state, and, therefore, have virtually agreed to pay these notes, if sued within that period. To ■ leave his state, therefore, prior to that time, and then set up a defence in violation of his own engagement, and the understanding of the plaintiff, is an injustice which ought not to be suffered, if. without a breach of duty, we can prevent it. It may be said that if a party becomes a suitor with us, he must be bound by our laws. This is true, as it respects the form of action, or mode of obtaining the remedy. Courts will, and ought to adhere to their own forms, but in deciding on the merits of the demand, or defence, they do not derogate from their dignity, [*416] by enforcing the laws of the state where *the contract originated. The present defence is a perpetual bar to the action, and, therefore, involves in it the merits, and not a mere question of form.^[2] If so, the laws

(a) (a) With deference to the bench by whom the decision in this case was pronounced, there does seem great force in the reasoning of the learned judge who dissented from them. If the exposition of a personal contract is to be governed by the law of the country where made, unless entered into with a view to that of another state; if, as we have determined, in Thompson v. Ketcham. 8 Johns. Rep. 189 , the time of payment is, by judgment of law, *521 a part of the original contract, why is not the time of prescription, as declared by the law, equally a part of the original contract? If it be so, is it not of the essence of the contract, according to the exposition which the law would give in Connecticut, that a prescription of less than 14 years shall not be set up against a promissory note ? When we make six years a bar, is it not to expound the contract according to our law, and not according to that of the country where the instrument was made? To a foreign bond we cannot plead our statute of usury; because we do not admit of a defence on the merits, which the law of the country where the deed was executed would not allow. The lex fori knows not of any bar to the right, which does not exist by the lex loci contractus. On this very principle we have disallowed, in the case cited above, a. plea of infancy to a note, because not shown to be a good defence where the note was made. Where is the difference between a bar from infancy, a bar under the statute of usury, and a bar under the statute of limitations ? Do they not all go to the action, and not to the form of the action ? The doctrine of t,he lex fori would apply, if on promissory notes the action of covenant were used in Connecticut, and the same form were attempted in a suit in our courts. A late decision has, however, fully adopted the law of the case in the text. It has been ruled that the statute of limitations is a good plea in bar to an action on a judgment in another state. Hubbell v. Cowdry, 5 Johns. Rep. 132 . See also Ruggles v. Keeler, 8 Johns. Rep. 263 .

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of Connecticut should be our guide, and not those of our own state. In foro consdentice, the plaintiff’s case is a clear one. The defendant, by his demurrer, admits, that if he had not come to this state, the plaintiff might and ought to have recovered. It would be matter of regret, if we were compelled to listen to as unjust a defence, considering the real understanding of those parties, as was ever obtruded upon a court of justice. It would not be easy to assign a reason why an obligation incurred in one state should be cancelled by either of the parties flying to another. We are not, in my opinion, under the necessity of establishing a principle or practice which may so easily be abused, and ' must always be followed by great injustice. So long as we are at liberty to expound contracts lege bd, it is our duty to discountenance a defence, which in such country would not be allowed. When the defendant left Connecticut, the plaintiff had a good cause of action against him, which ought not to be defeated by his own act, in coming among us. I think, therefore, that as this defence has nothing to do

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with the form of action but strikes at the plaintiff’s right to recover at all, we should apply to this case the limitation act of Connecticut, and that as seventeen years have not run since these notes were made, the plaintiff should have judgment.

Judgment for the defendant.