Shoe & Leather Nat. Bank v. Wood
| Decision Date | 23 October 1886 |
| Citation | 142 Mass. 563,8 N.E. 753 |
| Parties | SHOE & LEATHER NAT. BANK v. WOOD and another. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Henry D. Hyde, for plaintiff.
The court erred in ruling that there was no consideration for these notes, except for $1,128.07 already paid, and in taking the case from the jury and in ordering a verdict for defendants. It appears by the exceptions that, so far as the evidence admitted went, the sole consideration of said notes was the agreement to deliver certain goods. But it is well settled, and has been from the earliest times, that an agreement or promise is a perfectly good consideration for another agreement or promise. Strauborough v. Warner, 4 Leon 3; Gower v. Cooper, Cro. Eliz. 543; Nichols v Raynbred, Hob. 88. It is clear that the notes had a perfectly good consideration. The plaintiff should have been allowed to prove that the proceeds of these notes in suit went through Wallace, a partner of Macomber & Greenwood, the payees of said notes, to pay certain other notes of these defendants, for its direct tendency was to show that the defendants had received a full and complete consideration for the notes in suit from the payees, apart from the agreement on the part of the payees to deliver goods, and it directly rebutted the claim of the defense that they had an offset against the payees, in that goods were not furnished them. Even assuming for the moment that the statutes of Kentucky were properly in evidence, and that the notes in question were governed by these statutes, the defense that there was "defense, discount, or offset" on the part of the defendants was an affirmative one, and the plaintiff clearly had a right to go to the jury on the facts involved therein as to whether the defendants had made out their case.
The notes in suit were made in Massachusetts, for it is well settled that the contract of the maker is not complete till the delivery of the notes, and they were delivered in Massachusetts by mail. Where a contract is signed in one state, and received or delivered in another, by mail, the place of contract is the latter state. Chapman v Cottrell, 13 Wkly.Rep. 843; Lawrence v. Bassett, 5 Allen, 140; Bell v. Packard, 69 Me. 105; Cook v. Moffat, 5 How. 297; Fant v. Miller, 19 Grat. 47; Hart v. Wills, 52 Iowa, 56; S.C. 2 N.W. 916. The notes were indorsed and discounted in Massachusetts. They were, however, dated at Louisville, Kentucky, and payable at the Kentucky National Bank. It is submitted that the law of Massachusetts, the place where the said notes were delivered and made and indorsed, is to govern these notes. By the law of Massachusetts and the law-merchant, no equities existing between the maker and payees are admissible in a suit against the maker by a bona fide indorsee for value taking before maturity without notice.
The court below erred in ruling that the notes were governed by the laws of Kentucky. Assuming that the notes in suit were payable in Kentucky, and that the laws of the place of payment are to govern these notes, and that the statutes set forth in the bill of exceptions were properly admitted and proved as facts, and are the statutes of Kentucky, yet they do not apply to the notes in suit. The first statute provides that "bonds, bills, or notes shall be assignable, *** but not to impair the right to any defense, discount, or offset that defendant has and might have used against the original obligee, or any intermediate assignor, before notice of the assignment." But the notes in suit, as appears by the bill of exceptions, were indorsed. They were not assigned. They were indorsed in the regular course of business, and there is nothing to show that they were intended to come within the purview of that statute, and the facts do not bring them within it. This statute in no-wise affects the negotiability of notes under the law-merchant. An assignment is not an indorsement within the law-merchant, and an assignor is not liable as an indorsor. Lyons v. Divelbis, 22 Pa.St. 185; Kilpatrick v. Heaton, 3 Brev. 92; Crosby v. Roub, 16 Wis. 645. If the notes in suit had been assigned, the statutes might have had some force, but it does not touch the question of indorsement, and it does not appear but what the law of Kentucky is the same as that of Massachusetts as regards the transfer by indorsement, and the rights of indorsees.
When foreign law is not proved as a fact, it is presumed to be the same as that of the state where the case is tried. Com. v. Kenney, 120 Mass. 387; Cluff v. Mutual Ben. Ins. Co., 13 Allen, 308. This is especially true of the law-merchant, which is known to be the law of all civilized countries. Cribbs v. Adams, 13 Gray, 597; Dubois v. Mason, 127 Mass. 37. Statutes in derogation of the common law must be construed strictly. Melody v. Reab, 4 Mass. 473. The law of Kentucky, as offered by defendants, was not sufficiently proved at the trial as a fact, only two statutes being before the court, and could not be sufficiently brought before this court on exceptions, so that this court could determine what the laws of Kentucky are upon the subject. In the absence of such sufficient proof, this court will presume that the law of Kentucky is the same as that of Massachusetts. Cases cited, supra.
The second statute offered in evidence discriminates against banks located in other states, in that it attempts to put notes indorsed to and discounted by certain Kentucky banks upon a better footing than notes discounted by banks which are citizens of other states. The courts of Massachusetts should not give any effect to such a statute, which discriminates against the citizens of Massachusetts; for, if the plaintiff bank were located in Kentucky, there would be no defense to the notes in suit, even under the statutes set forth as the laws of Kentucky. The laws of a foreign state have no force in Massachusetts, proprio vigore, and are given effect only through comity; but comity does not require that a statute which gives a citizen of Kentucky rights not given a citizen of Massachusetts under the same state of facts should be recognized. It is submitted that this statute is unconstitutional, and in contravention to the constitution and laws of the United States.
It is submitted that the plaintiff is entitled to go to a jury upon the question of fact involved in this case, and that the statutes of Kentucky, as set forth in the bill of exceptions, do not apply.
A. Hemenway and D.F. Kimball, for defendants.
The notes were made payable in Kentucky. The contract is to be governed by the law of that state. Pine v. Smith, 11 Gray, 38, 41: Carnegie v. Morrison, 2 Metc. 381, 395; Williams v. Wade, 1 Metc. 82; McIntyre v. Parks, 3 Metc. 207, 209; Worcester Bank v. Wells, 8 Metc. 107, 113; Story, Confl.Laws, §§ 317, 344, 345; Stevenson v. Payne, 109 Mass. 378; Orcutt v. Nelson, 1 Gray, 536; Milliken v. Pratt, 125 Mass. 374; Kline v. Baker, 99 Mass. 253; Finch v. Mansfield, 97 Mass. 89; Holmes, Com. Law, 365. The defense relates to and is a part of the original transaction. Promissory notes are not commercial paper in Kentucky. Failure of consideration is matter of defense, not of offset or counter-claim. Schooling v. McGee, 1 T.B.Mon. 232; Sharps v. Eccles, 5 T.B.Mon. 69, 72; Caldwell v. Cook, 5 Litt. (Ky.) 181; Prather v. Weissiger, 10 Bush, 117, 126, 127; Hyatt v. Bank of Ky., 8 Bush, 193, 199; Luckett v. Triplett, 2 B.Mon. 39; Clay v. McClanahan, 5 B.Mon. 241; True v. Triplett, 4 Metc. (Ky.) 57; Thompson v. Moore, 4 T.B.Mon. 79. Thus, on the undisputed facts, there was nothing on which the plaintiff was entitled to go the jury. Kline v. Baker, 99 Mass. 253-255.
OPINION
1. The plaintiff contends that the notes in suit were made in Massachusetts, and that the laws of this state are to govern the contracts. The defendants, the makers of the notes, resided in Kentucky. They made and signed the notes at Louisville, in that state, and then sent them by mail to the payees in Massachusetts. By their terms they were payable at the Kentucky National Bank, a bank organized in Kentucky under the United States banking law. Under our decisions these various circumstances determine the place where the contract was executed, and where it was to be consummated. It was clearly a Kentucky contract, and is to be governed by the laws of that commonwealth. Pine v. Smith, 11 Gray, 38; Carnegie v. Morrison, 2 Metc. 381; Orcutt v. Nelson, 1 Gray, 536; Milliken v. Pratt, 125 Mass. 374.
2. The defendants put in evidence the General Statutes of Kentucky c. 22, § 6, which provides that all bills or notes for money or property shall be assignable, so as to vest the right of action in the assignee; but, except in the case of bills of exchange, this shall not impair the right to any defense, discount, or offset that the defendant has and might have used against the original obligee, or any intermediate assignor, before notice of the assignment. At the argument the defendant's counsel, without objection on the part of the plaintiff, cited Kentucky cases, for the purpose of...
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