Vermont Loan & Trust Co. v. Dygert
| Decision Date | 03 June 1898 |
| Citation | 89 F. 123 |
| Parties | VERMONT LOAN & TRUST CO. v. DYGERT et al. |
| Court | U.S. District Court — District of Idaho |
A. A Gallagher, for complainant.
S. C Herrin, for defendants.
This action is based upon a mortgage on land in Idaho, given to secure a bond or note for the sum of $3,400, and two separate notes or coupons, one for $221, and the other for $202.51 for the payment of interest to become due on the principal note, all dated at Spokane, Wash., November 17, 1892, and expressly made payable at said place, all the notes to draw 12 per cent. annual interest after maturity. The complainant had agents in Idaho, who transacted there all the business connected with this loan, including the exchange of all papers and the payment of all interest coupons, except that it appears one interest coupon in controversy was stamped 'Paid' at the office of complainant, in Spokane.
The chief defense to this action is that the contract is usurious by the laws of Idaho, by which it is claimed it must be construed. Generally, this court will follow the construction of the law as rendered by other co-ordinate federal courts but it must follow that by the supreme court of the United States. The defense, invoking the general rule of comity by which United States courts follow the construction given of state statutes and constitutions by the state courts, asks that the same rule be applied to this case that prevailed in Trust Co. v. Hoffman, 49 P. 315, rendered by the supreme court of Idaho long after the contract in this case was entered into. It seems clearly settled that when a contract, based upon some state statute, is entered into by the parties before any construction of such statute is made by the state courts, the United States courts are not bound by a construction given the statute by the state court after the making of the contract; but, while 'leaning to an agreement with the state courts,' they will exercise an independent judgment in the construction of such statute. Carroll Co. v. Smith, 111 U.S. 562, 563, 4 Sup.Ct. 539; Anderson v. Santa Anna Tp., 116 U.S. 361, 362, 6 Sup.Ct. 413; Pleasant Tp. v. Insurance Co., 138 U.S. 67, 11 Sup.Ct. 215; Folsom v. Township Ninety-Six, 159 U.S. 627, 16 Sup.Ct. 174; Louisville Trust Co. v. City of Cincinnati, 22 C.C.A. 334, 76 F. 301; Caesar v. Capell, 83 F. 427; and many other cases. It follows that upon the question whether this contract must be construed by the laws of Washington, or by those of Idaho, this court must reach its conclusion independent of the state decision referred to.
It is expressly stated in the principal note that 'both principal and interest notes are payable at the office of the Vermont Loan and Trust Company at Spokane, Washington' and the coupon notes say that they are payable 'at the office of the Vermont Loan and Trust Company.' It is generally held that all contracts must be construed according to the law of the place of contract, unless the parties themselves agree upon some other place, and, when they do, their agreement will be enforced. So clearly does this seem the settled law that it is deemed unnecessary to discuss it or cite authorities, but those curious to further pursue the subject will find numerous citations in Coghlan v. Railroad Co., 142 U.S. 101, 12 Sup.Ct. 150. As the parties contracted for the payment of the...
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