Opinion · Supreme Court of North Carolina
Arrington v. . Gee
Arrington v. . Gee, 27 N.C. 590 (N.C. 1845)
- Type
- Opinion
- Court
- Supreme Court of North Carolina
- Jurisdiction
- North Carolina
- Date
- 1845-06-05
- Topic
- bankruptcy
Ruffin, C. J. The Court is of opinion, that there was no -error in refusing the instructions prayed by-the defendant’s counsel, or in those which his Honor gave to the jury. The contract of sale, from which the bond sued on had its origin, was made and completed in Alabama; and the money, which -the purchaser engaged to pay to the seller, would, if not paid when due, thereafter bear interest at the rate ,of 8 per cent ;1 it not being stipulated by the parties, that the payment should be in any other place. 'For it is an undoubted principle of law, that, not only the validity of a contract depends on the ■lex loci contractus, but its effects, including the right of the creditor to interest aud its amount, depend also on it.
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ARRINGTONv. GEE,27 N.C. 590(1845)
JOHN ARRINGTON v. CHARLES J. GEE ET AL.
Supreme Court of North Carolina
(June Term, 1845.)
2. And this stipulation, to take the case out of the general rule, must appear on the face of the contract.
3. A contract payable generally, naming no place of payment, is to be taken to be payable at the place of contracting the debt, and not where the domicil of the creditor may be.
4. A bond taken simply to secure the performance of a contract, wherever it may be executed, must bear the same interest as the original contract, unless it be otherwise expressed on the face of the bond.
5. When A., a citizen of North Carolina, took a number of slaves to Alabama, and there sold them to B., a citizen of Alabama, who was to give him a bond with sureties for the price of the slaves, and this bond was executed by B. at Mobile (Alabama), where it bore date, and afterwards brought to North Carolina and here executed by two sureties, citizens of North Carolina, the bond not expressing any place of payment:Held, that the sureties, as well as the principal, were bound for the payment of interest according to the laws of Alabama.
MOBILE, 6 January, 1837.
$12,000. Twenty-four months after date, we or either of us, promise to pay to Archibald H. Arrington or bearer, twelve thousand dollars, for value received. CHAS. J. GEE, (Seal) M. H. PETWAY, (Seal) STER. H. GEE, (Seal)
The only question was as to the rate of interest this bond should bear. The following facts were agreed upon. The obligee, A. H. Arrington,Page 414then and now a resident of this State, in the year ____ took to the State of Alabama many slaves and sold them there to the first named obligor, Charles J. Gee, for the sum of $24,000, one-half of which was paid in cash, and for the residue of the purchase money he gave the bond, agreeing at the same time to give for his sureties the other two obligors, both of whom reside in this State, and their residences were well known to the obligee, Arrington. The slaves were delivered, and the bond written and signed by Charles J. Gee in Alabama, and delivered to the obligee, Arrington, who brought it to this State, where the other obligors executed it as sureties of Charles J. Gee, upon the facts aforesaid being represented to them. The rate of interest fixed and allowed by the law of Alabama, upon contracts after they become due, in 8 per cent. The defendants' counsel prayed the court to instruct the jury that, there being no place of payment designated by the terms of the bond, it was, in law, to be paid where the obligee resided, and therefore bore but six per cent interest. The court refused to give this instruction, but charged the jury that from the face of the bond and the facts agreed, the plaintiff was entitled to interest on the bond according to the laws of Alabama. The jury returned a verdict for the plaintiff, allowing Alabama interest, and from the judgment thereon the defendants appealed.
But, in truth, this security by bond was given by him in Alabama, as well as the debt originally contracted there, and the bond is dated at Mobile and specifies no other place of performance. Now, although it be true that the rule of thelex loci contractus, before stated, is subject to the modification that it must yield to thelex loci in quo solveret, yet that is so only in those cases in which it appears from the contract that the performance is to be at some other place. For, when a contract states that the parties had in view the law of another country when they made it then it is but right to say that the contract should be governed by the law the parties thus appear to have intended, rather than by that of theloci contractus. Thus notes made and dated in Dublin for £ 100, mean Irish and not English currency, unless they be payable on the face in England, in which latter case the money would be English.Kearneyv. King, 2 Bern. Ald., 301;Sprowle v. Legge, 1 Boon Cres., 16;Dow v. Lippman, 5 Clark Fin., 1. For debts have nositusand are payable everywhere, including thelocus contractus;and, therefore, the law of that place shall govern, since it does not appear from the contract that the parties contemplated the law of any other place. There cannot be any other rule but that of the place of the origin of the (595) debt, unless it be that where the creditor may be found, since the debtor must find the creditor for the purpose of making payment. But, manifestly, this last can never be adopted, because it would vary with every change of domicil or residence of the creditor. Then, as was observed byLord Brougham, inDow v. Lippman, a contract, payable, generally, naming no place of payment, is to be taken to be payable at the place of contracting the debt, as if it were expressed to be there payable. Being payable everywhere, the rate of interest must be determined by the law of the origin, since there is nothing else to give a rule.Page 416
That being so, certainly Charles J. Gee is bound for Alabama interest. As to him, the contract is to be construed as if it said upon its face, this debt shall bear 8 per cent interest, if not paid when due, the contract being made in Alabama, and the money to be paid there. If he was sued on it in Alabama or here, there could be no hesitation in giving that rate of interest against him. Does it not follow that the other parties to the bond are liable for the same sum? We are to suppose that as to Charles J. Gee, the bond expressed that it was payable to Mobile. When the others executed it can it be also supposed that they insisted that, as to them, the bond should be payable in North Carolina? Certainly not; for to say nothing more, it cannot be presumed, that the same debt is payable at two different places, unless it be so expressed. It is said, indeed, that, as in our law the contract is several, it is the same thing, as if these parties had given distinct notes in this State for the debt. But it is to be recollected that the bond is also joint and therefore, that all three of the obligors obliged themselves jointly to do the same thing, that is to say, to pay a certain sum of money; and the only question is, whether we are to understand them as contracting to pay that sum at one and the same place. For, if we are so to understand, there can be no doubt from what has been already said, that place is Mobile; and then, according to the (596) rule, that the interest is to be regulated by the law of the place of performance, the bond would bear Alabama interest. There would have been nothing unlawful in taking a bond in this State for that interest, as we have before seen, as it would be merely a supplemental security for a previous lawful contract. Now, it is impossible to suppose these defendants could have contemplated the payment being made here by them, and not at Mobile by the principal. The very statement of the case is that they executed the bond as the sureties of Charles J. Gee; and in the nature of things, therefore, they expected to be only secondarily liable, and they were to be liable for what the principal had bound himself. If that were not so it would lead to endless confusion. For, suppose a principal in Alabama and three sureties, one living and executing the bond in Louisiana, one in North Carolina, and one in New York, would there be four distinct contracts as to the rate of interest? It would be absurd to hold so. In reality, the contract of the sureties, in reference to the question under consideration, is one of guaranty of the performance of his contract by their principal; and therefore each surety, no matter where he lives, must be liable for precisely the same sum, which is that for which the principal is liable, neither more nor less.
From what has been said it follows that his Honor was right in deciding the question, as a matter of law, and not leaving it to the juryPage 417as a question of intention of the parties as to the rate of interest; for the rate depended upon the question, what law governed the case, and that was a question for the court and not the jury. The intention of the parties can never be material in cases of this sort, except where contracts are made in one country and securities there takenmala fide, and expressed to be performed in another, with the purpose of evading thelex loci contractus;as if parties, in fraud of the law and to cloak usury, upon a loan in this State take, as a security, a bill of exchange on another State in the expectation that it will be protested, so as to accumulate interest under the name of damages, or under the pretense of a difference in exchange; then the jury must find the intention in order to apply the law to that shift and device. But here thebonafidesis not questioned, and the only dispute, what is the legal (597) rate of interest on this contract which, of course, was for the court.
PER CURIAM. No error.Cited: Davis v. Coleman,29 N.C. 428;Roberts v. McNeely,52 N.C. 507;Houston v. Potts,64 N.C. 38;Morris v. Hockaday,94 N.C. 288;Bank v. Land Co.,128 N.C. 194.