Lamb v. Hardy

• Decision Date: 23 April 1919
• Docket Number: (No. 2532.)
• Citation: 211 S.W. 445
• Parties: LAMB v. HARDY.
• Court: Texas Supreme Court

Page 445

211 S.W. 445

LAMB v. HARDY.

(No. 2532.)

Supreme Court of Texas.

April 23, 1919.

Error to Court of Civil Appeals of Seventh Supreme Judicial District.

Action by C. R. Hardy against W. E. Lamb. Judgment for defendant was reversed by Court of Civil Appeals (152 S. W. 650), and defendant brings error. Affirmed.

J. B. Reynolds, of Wheeler, for plaintiff in error.

Templeton & Templeton, of Wellington, and Chas. L. Black, of Austin, for defendant in error.

GREENWOOD, J.

This was a suit, brought by defendant in error to recover $1,506 of plaintiff in error, as indorser in blank of three promissory notes, which were executed and indorsed in the territory of Oklahoma, where they were payable. Plaintiff in error defended the suit on the ground that, under the laws of Oklahoma territory, the blank indorsement of the notes had no other effect than to transfer the title thereto to the indorsee and did not obligate the endorser to pay same.

No evidence was introduced to prove the laws of Oklahoma territory, except that plaintiff in error offered in evidence the opinion in the case of Pattee Plow Co. v. Beard, wherein it is held that the provision in a promissory note for attorney's fees renders same nonnegotiable, and that the indorsement of a nonnegotiable note operates merely to transfer a legal and equitable title thereto, without guaranty of payment, and except that plaintiff in error also offered in evidence the opinion of the Supreme Court of the state of Oklahoma, reported in Clowers et al. v. Snowden et al., 21 Okl. 476, 96 Pac. 596, wherein it is held that a promissory note is not negotiable when it contains a provision for the payment of attorney's fees. There is nothing in the evidence to show by what court the case of Pattee Plow Co. v. Beard was decided, nor where the case is reported.

Since the notes sued on, bearing the blank indorsement of plaintiff in error, were executed in Oklahoma territory and were made payable and indorsed there, and since they provided for 10 per cent. attorney's fees, upon suit being instituted thereon, it is the contention of plaintiff in error that by the introduction in evidence of the opinions above mentioned he established that he was subject to no liability as indorser, and this contention was sustained by the trial court, who rendered judgment denying a recovery to defendant in error.

On appeal, this judgment was reversed and judgment rendered for defendant in error, upon the ground that the courts in Texas will not apply the laws of a sister state, in the enforcement of obligations of parties to promissory notes, executed and payable in the sister state, because such laws have not been embodied in statutes and have simply dealt with questions of commercial law. 152 S. W. 650. In this conclusion, the honorable Court of Civil Appeals followed certain expressions in the opinions of the Courts of Civil Appeal in the cases of Alexander v. Bank of Lebanon, 19 Tex. Civ. App. 620, 47 S. W. 840, and Third National Bank of Springfield v. National Bank of Commerce, 139 S. W. 665.

We think there was error in the conclusion of the Court of Civil Appeals that the law of Oklahoma territory, if properly proven, ought not to control in determining the liability arising from the blank indorsements in that territory of the notes sued on. In the case of National Bank v. Kenney, 98 Tex. 301, 83 S. W. 371, this court announced:

"From what has been said it would seem that in order to defeat this suit the defendant bank must show that the law of Missouri as to commercial paper is different from the law of Texas. In order to do so, it must plead the law of that state and prove it as pleaded."

Wharton on Conflict of Laws, says:

"In a few instances the state courts have assumed the same right to determine general questions of common law according to the precedents prevailing in the forum, without reference to the decisions of the courts of the state in which the contract or other transaction has its situs, the law of which, if statutory, would concededly govern. As a rule, however, the state courts tacitly proceed upon the assumption that the rules of law prevailing in another state or country, where the transaction had its situs, are equally binding, whether embodied in the decisions of its courts, or in its statutes; and some of the state courts have expressly repudiated the doctrine that questions of general commercial, or general common, law are to be determined in accordance with the views prevailing at the forum, without reference to those prevailing at the situs of the contract or transaction in question." 2 Wharton on Conflict of Laws, pp. 948, 949.

It seems to us that this court has declined to make questions of general commercial or common law exceptions to the general rule that it will determine and enforce substantive contract rights and obligations in accordance with the law of the place where the contract was made and was to be performed. Bank v. Kenney, 98 Tex. 293, 83 S. W. 368; M., K. & T. Ry. Co. v. Wise, 101 Tex. 459, 109 S. W. 112. And we are in entire agreement with the view expressed in Midland Steel Co. v. Citizens' Nat. Bank, 34 Ind. App. 107, 72 N. E. 290, as follows:

"The foreign court is the only tribunal competent to decide upon the common or the statute...