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Law of place of perform



of performance.

law of that place in view when they prescribe the mode of performance. Hence flows the rule that the law of the place of performance determines the mode of ance deter- performance. Undoubtedly this rule applies in all cases where the parties must be inferred to have had the place of performance in view when they framed. the contract. A contract, for instance, to do a thing which is lawful in B., the place of performance, but is not lawful in A., the place of contract, will be construed according to the law of B.; for the parties will not be presumed to have intended an illegal act. But this rule, also, is one of logic and not of arbitrary law. It may happen that the parties intended the mode of performance to be according to the law of the place of contract, and not to the law of the place of performance. Two Frenchmen agree, for instance, to deliver in New York a number of pieces of silk, and it appears that with regard to the amount of silk to make up such pieces they had in view the measurement usual in France, not that usual in New York. In such case the French measurement, not the New York measurement, would be that by which the contract is to be determined. But, unless in such exceptional cases as these, the law of the place of performance determines. the mode of performance. This is eminently so with respect to payment, which, as to mode, is governed by the law of the place of payment.1

Dates not conclusive

§ 320. Dates are often inserted arbitrarily, sometimes a printed form being followed, sometimes the resi dence of one of the parties, the others looking upon as to place. date as a mere matter of form. It is, therefore, always admissible to prove the actual as distinguished from the formal date, and the parties are in no way concluded by the date given in the document.2

Whart. Conf. of Laws, §§ 401 et seq.; Northwest Ins. Co. v. Elliott, 7 Sawyer, 17; see, further, Hill v. Spear, 50 N. H. 253; Graham v. Bank, 84 N. Y. 393; Webber v.

Donelly, 33 Mich. 469; Rindskopf v.
De Ruyter, 39 Mich. 1; Champion v.
Wilson, 64 Ga. 184.

2 Whart. Conf. of Laws, § 411; Whart. on Ev., § 977.

When laws conflict,

that most


to contract


$321. When it is a matter of doubt which of two conflicting laws the parties intended the contract to be subject to, it is a general rule that if by one of these laws the contract would be invalid, while by the other it would be operative, the contract will be presumed to have been made in view of the latter law.1 322. When, however, the lex fori peremptorily prohibits suits on particular kinds of contracts, e. g., gaming contracts, the prohibition is absolute, and must, as will be seen, be enforced by the judex fori. all other cases, the law to which the contract is actually subject is to be enforced as a matter of right.3

2d. Maritime Contracts.

Lex fori when per

In emptory to be obeyed.

as to ship

by law

§ 323. As a general rule, following from the position that a ship is a floating section of the country to which she belongs, contracts relating to a ship as such are Contracts governed by the law of such country. When the determined ship enters a foreign port, however, she is bound by of flag. the law of the port, and is subject to such liens and charges as that law may impose. As to the performance of freight contracts, the law of the place of performance usually prevails. As to general average, the lex Rhodia jactu is the usual standard.1

3d. Commercial Paper.

Each party

bound by his own

324. Each party to commercial paper is in a certain sense bound by his own law. If the question concerns the mode and conditions of signature, then the law in the place where he signed usually prevails; if the question concerns the mode and conditions of payment, then the law in the place of payment usually prevails.

1 Whart. Conf. of Laws, § 429; infra, §§ 333, 615; see Fitch v. Remer, 1 Flip. C. C. 15.

2 Infra, § 331.

Whart. Conf. of Laws, § 428; see


Denny v. Faulkner, 22 Kan. 89; Banchor v. Gregory, 9 Mo. Ap. 102.

4 Whart. Conf. of Laws, §§ 440 et seq.; supra, § 188.

Hence there may be as many distinct jurisprudences bearing on commercial paper as there are signatures to such paper.1 325. The mode of payment, and general liability in

Law of place of payment controls as

respect to payment, are settled by the law of the place of payment, which controls, also, the allowance of days of grace, the amount of interest to be to payment. collected, and the mode of demand and protest. The form of protest is governed by the law of the place of payment, unless, as can only be the case in very rare contingencies, the protest is necessarily made in some other place. When, however, an endorser is fixed, by protest and notice, as immediate debtor, the notice he is to give to the party from whom he took depends upon the law governing the contract between him and that party. The liability, also, of drawer and endorser is conditioned by that of the acceptor, but is subject, as to payment, to the special place of payment. From the general principles above stated, it follows that a bill formally defective in the place where it was made may bind endorsers if good in the place of endorsement, which, as to such endorsers, is the place of payment. Intermediate endorsements, also, though defective by the lex loci actus, do not preclude further negotiability when valid by the law of the place to which the maker or acceptor is subject.2

326. Process on negotiable paper, together with the costs and interest to be recovered thereon, are determined termined by by the lex fori.3

Process de

lex fori.

ing to pay

4th. Insurance.

§ 327. Contracts of insurance are governed by the same Law relat principles as those already noticed as bearing on contracts in general. The law of the place where the loss is to be paid, being generally the principal office of the insurer, determines the mode and conditions of payment by the insurer; the law of the place where the premium is to be paid, being generally the domicil of the

ment is that of place of payment.

1 Supra, § 314; Whart. Conf. of Laws, §§ 447 et seq.; and see Royal Bank v. Commercial Bank, 47 L. T. N. S. 360.

2 Whart. Conf. of Laws, §§ 402, 450; see Guy v. Rainey, 71 W. 221; Hart v. Wills, 52 Iowa, 56.

3 Whart. Conf. of Laws, § 462.

insured, determines the mode and conditions of payment by the insured. When, however, an insurance company establishes in a particular state an agency with power to act, then such agency is invested with the liabilities attaching to a principal office, and in some states these liabilities are imposed by statute on all agencies of foreign insurance companies, nor is any foreign insurance company permitted to act in such states except through a responsible agency subjected to such liabilities.'

Interpretation de


§ 328. The interpretation of contracts of insurance is governed by the same rules which bear on contracts generally. If such contracts are made in the common domicil of both parties they are governed by pendent on the laws of such domicil in matters of interpretation. If there are conflicting laws, then an ambiguous term will be supposed to have been used in the sense in which it was intended by the party introducing it, such sense being generally that in which it is used in his place of business.2

5th. Partnership.

Secret partner may set

up limitadomicil,

tions of his

§ 329. If the object of a suit be to charge a particular party as secret partner in a firm, such partnership not being known to the plaintiff at the time of the contract on which he sues, it has been held that the alleged secret partner may avail himself of the limitations of liability in such cases imposed by the law of his domicil. It is otherwise, however, when pearing as his membership as one of the firm was known to the plaintiff at the time of the contract, while no notice was given of any limitations of his liability.3

6th. Common Carriers.

but not partner ap


§ 330. So far as concerns the mode of performing a contract of common carriage, the law of the place of performance determines in all matters left open by the contract. It has been held, however, that the inter- perform

Ibid. § 465; see Maspons v. Mildred, 47 L. T. N. S. 318; Shattuck v. Ins. Co., 4 Cliff. 598.

place of

2 Whart. Conf. of Laws, §§ 466–7.
3 Whart. Conf. of Laws, §§ 468 et seq.

mines mode

of perform

ance deter- pretation of such a contract is determined by the law of the place of the carrier's principal office, and this undoubtedly holds good where the words to be interpreted emanate originally from such office. By the law of the place of such principal office, also, is the question of the carrier's limitation for liability for negligence usually determined, that being the place where such limitation is generally imposed and accepted.1

ance; law of place of payment determines payment.


by law of place of performance, unless judex fori

be precluded

from enter

taining suit.

7th. Illegal Contracts.

§ 331. There are cases in which the lex fori peremptorily forbids suits of a particular character from being determined brought. When this is the case, no recovery can be had on such a suit, although the contract may not be illegal by the law of the place of performance. If there be no such prohibition, however, the law of the place of performance is to determine as to the legality of the contract. This distinction applies to contracts to sell spirituous liquors, to gaming contracts, to contracts for the carrying on of lotteries. On the other hand, contracts, one of whose objects is to evade a foreign revenue law, will not for this reason be held illegal by the lex fori. The distinction is, that while a contract to do a thing legal in the place of performance will be enforced, unless the suit be peremptorily forbidden by the lex fori, the judex fori will not enforce a foreign penal law by declaring invalid a contract which in its performance would conflict with that law. § 332. A contract conflicting with the law of nations-e. g., to commit a breach of neutrality— will not be enforced; nor will a contract conflicting with public policy. Hence contracts in restraint of

Contracts conflicting

with law of nations or

public policy will

1 Ibid. §§ 471 et seq.

2 Whart. Conf. of Laws, §§ 487-490 et seq.; see Second Nat. Bank v. Curren, 36 Iowa, 555. As to illegal contracts generally, see Whart. on Cont., §§ 335 et seq. That a court will enjoin a domiciled citizen from prosecuting in

a foreign state an inequitable claim against another domiciled citizen of the home state, see Dehon v. Foster, 4 Allen, 545; Vail v. Knapp, 49 Barb. 299; Snook v. Snetzer, 25 Oh. St. 517; Engle r. Scheuerman, 40 Ga. 206; Keyser v. Rice, 47 Md. 203; Story, Eq., § 899.

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