Garrigue v. Kellar

• Decision Date: 23 May 1905
• Docket Number: 20,526
• Parties: Garrigue et al. v. Kellar
• Court: Indiana Supreme Court

74 N.E. 523

164 Ind. 676

Garrigue et al. v. Kellar

No. 20,526

Supreme Court of Indiana

May 23, 1905

From Noble Circuit Court; David V. Whiteleather, Special Judge.

Action by Jacob Kellar against Lida M. Garrigue and another. From a judgment for plaintiff, defendants appeal. Transferred from Appellate Court under § 1337u Burns 1901, Acts 1901, p 590.

Affirmed.

L. W Welker, for appellants.

R. P Barr and Chapin & Denny, for appellee.

OPINION

Montgomery, J.

This action was brought upon three promissory notes executed by appellants to the Noble County Bank, and payable at said bank, and by it assigned before maturity to appellee. Appellee filed with his complaint an affidavit and undertaking, and obtained a writ of attachment upon which certain real estate owned by appellant Lida M. Garrigue was attached.

Appellant Lida M. Garrigue answered the complaint, (1), by general denial, and, (2), by alleging her suretyship and coverture. Appellee replied in three paragraphs to the second paragraph of answer: (1) That at the time of the execution of said notes said appellant Lida M. Garrigue was, and that she still is, a resident of the state of Illinois; that said notes were executed in said state; and that under the laws of said state, set out in full, she had the capacity to execute said notes as surety. (2) The same averments as in the first, and further, that said notes were given in renewal of a note for the principal sum of $ 3,750, executed by both of the appellants on the 30th day of July, 1900, in the city of Chicago, and payable in said city in one year after date, for money loaned and paid to R. H. Garrigue in the city of Chicago. (3) General denial.

The cause was tried by a jury, and a general verdict returned for appellee, with answers to interrogatories. Appellant Lida M. Garrigue unsuccessfully moved the court for judgment in her favor upon the answers to interrogatories, and for a new trial, and judgment was thereupon rendered in favor of appellee for $ 4,300, and for the sale of the attached real estate.

The assignment of errors requires us to review the decision of the court in overruling the demurrer to the first and second paragraphs of reply, and in overruling the motion for judgment on the special findings of the jury, and in overruling the motion for a new trial.

The first question for decision is presented by appellant Lida M. Garrigue's demurrer to the first paragraph of reply, and is this: Is a note executed in Illinois by a married woman as surety, while domiciled in that state, but made payable at a bank in this State, valid and enforceable in Indiana? The statute of Illinois in regard to contracts of married women, in force at the time of the execution of the notes in suit, and at all other times covered by this controversy, is as follows: "Contracts may be made and liabilities incurred by a wife, and the same enforced against her, to the same extent and in the same manner as if she were unmarried; but, except with the consent of her husband, she may not enter into or carry on any partnership business, unless her husband has abandoned or deserted her, or is idiotic or insane, or confined in the penitentiary." R. S. 1899 (Ill.), p. 959, § 6. The Indiana statute applicable to the matter under consideration is as follows: "A married woman shall not enter into any contract of suretyship, whether as indorser, guarantor, or in any other manner; and such contract, as to her, shall be void." § 6964 Burns 1901, § 5119 R. S. 1881.

The decisions of the courts of different states upon the question before us are in irreconcilable conflict and in hopeless confusion. It has been held by some courts that when conflicting laws affect the enforcement of a contract like the one in suit, the law of the domicile of the maker governs; by others, the law of the place of execution; by others, the law of the place of performance, and by others, the law of the place of enforcement. We can not reconcile the cases, or harmonize the divergent views contained in the books, but must be content to extract therefrom such principles as we believe to be sound, and declare the law as it is and ought to be in this State. The law applicable to promissory notes executed in one state and payable in another, having conflicting laws, may be summed up as follows: 1. All matters bearing upon the execution, the interpretation and validity of the note, including the capacity of the parties to contract, are to be determined by the law of the place where the contract is made. 2. All matters connected with the payment, including presentation, notice, demand, protest and damages for nonpayment, are to be regulated by the law of the place where, by its terms, the note is to be paid. 3. All matters respecting the remedy to be pursued, including the bringing of suits, service of process, and admissibility of evidence, depend upon the law of the place where the action is brought. Scudder v. Union Nat. Bank (1875), 91 U.S. 406, 23 L.Ed. 245; Bowles v. Field (1897), 78 F. 742; Union Nat. Bank v. Chapman (1902), 169 N.Y. 538, 62 N.E. 672, 57 L.R.A. 513, 88 Am. St. 614; Ruhe v. Buck (1894), 124 Mo. 178, 27 S.W. 412, 25 L.R.A. 178, 46 Am. St. Rep. 439; Mendenhall v. Gately (1862), 18 Ind. 149.

A contract must be construed and its validity determined under the laws of the state where it is executed, unless it can be fairly said that the parties at the time of its execution clearly manifested an intention that it should be governed by the laws of another state. Grand v. Livingston (1896), 4 A.D. 589, 38 N.Y.S. 490; Hauck Clothing Co. v. Sharpe (1900), 83 Mo.App. 385; Wharton, Confl. of Laws (3d ed.), § 401.

If a contract is valid in the state where it is executed, it is valid everywhere. Milliken v. Pratt (1878), 125 Mass. 374, 28 Am. Rep. 241; Wright v. Remington (1879), 41 N.J.L. 48, 32

Am. Rep. 180; Taylor v. Sharp (1891), 108 N.C. 377, 13 S.E. 138; Holmes v. Reynolds (1883), 55 Vt. 39; Miller v. Wilson (1893), 146 Ill. 523, 34 N.E. 1111, 37 Am. St. 186; Baer Bros. v. Terry (1901), 105 La. 479, 29 So. 886; First Nat. Bank v. Mitchell (1899), 92 F. 565, 34 C. C. A. 542.

Applying these general principles to the case in hand, it is our conclusion that the validity of the notes in suit, as to the appellant Lida M. Garrigue, must be determined by the laws of Illinois, where it is alleged they were executed, notwithstanding the fact that the place of payment was in Indiana.

If the notes were executed in Illinois, as averred, and were valid there, the designation of a place of payment within this State will not be accepted as conclusive evidence, or as clearly manifesting an intention by the parties that their validity should be governed by the laws of Indiana, when such an interpretation would render them wholly void as to one of the makers. This conclusion is supported by the rule of sanity and honesty, "that no contract must be held as intended to be made in violation of the law, whenever, by any reasonable construction, it can be made consistent with the law, and which it was competent for the parties to adopt." Bell v. Packard (1879), 69 Me. 105, 31 Am. Rep. 251; Wharton, Confl. of Laws (3d ed.), § 429.

The substantial essence of a contract evidenced by a promissory note is the undertaking by the makers to pay the principal sum of money named. The place of payment is an incidental matter. The makers are not discharged from their principal obligation by an unaccepted tender of the amount owing, at the time and place designated for payment, but by such tender are released only from liability for damages which otherwise would accrue from nonpayment. Makers of promissory notes can not insist that they will pay at the place designated or not at all, but may be sued upon their obligation and payment of the principal amount enforced at any place where jurisdiction over their persons or property may be acquired.

In the case of Union Nat. Bank v. Chapman, supra, a married woman executed a note as surety, in Alabama, payable in Illinois, and the court said: "It seems clear that the capacity of Mrs. Chapman to contract must be determined by the law of the state where the contract was executed unless it can fairly be said that she, at the time of the execution of the instrument, clearly understood and intended that it should be governed by the laws of another state. Such an intention or understanding is not manifest in this case."

In the case of Hauck Clothing Co. v. Sharpe, supra, the defendant was a married woman and resided in Missouri, where she executed a note for the accommodation of her son, and made it payable at a bank in Indiana, the court said: "The law of the place of performance does not in any way affect the capacity of a married woman to contract in a state which authorized her to make the contract, unless made with reference to real estate situated in the state of performance, or it is apparent from the terms of the contract that the parties intended to incorporate the laws of the state of performance in the contract."

From the case of William Glenny Glass Co. v Taylor (1896), 99 Ky. 24, 34 S.W. 711, we quote the following paragraph: "The mere fact that the note was made payable in New York and received by the payee in that city, under the circumstances of this case, is not sufficient evidence of the fact that it was intended the law of that state should govern, or its validity to be tested by the statute in regard to usury. We will not assume, nor does the evidence authorize such a conclusion, that the brother living in Washington and executing the note in that place, and his sister executing the note in Bracken county, Kentucky, regarded or expected their liability to be determined by the statute of New York, and when...