Bank of the United States v. Donnally - 33 U.S. 361 (1834)


U.S. Supreme Court

Bank of the United States v. Donnally, 33 U.S. 8 Pet. 361 361 (1834)

Bank of the United States v. Donnally

33 U.S. (8 Pet.) 361

Syllabus

Action of debt brought by the Bank of the United States upon a promissory note made in the State of Kentucky, dated 25 June, 1822, whereby, sixty days after date, Campbell Vaught & Co., as principals, and David Campbell, Steeles, and Donnally the defendant, as sureties, promised to pay, jointly and severally, to the order of the president, directors, and company of the Bank of the United States $12,877, negotiable and payable at the office of discount and deposit of the said bank at Louisville, Kentucky, value received, with interest thereon, at the rate of six percentum per annum thereafter if not paid at maturity. The declaration contained five counts. The fourth count stated, that the principal and sureties "made their other note in writing," &c., and thereby promised, &c., (following the language of the note,) and then proceeded to aver

"that the said note in writing, so as aforesaid made at . . . was and is a writing without seal stipulating for the payment of money, and that the same, by the law of Kentucky, entitled an act . . . [reciting the title and annexing the enacting clause] is placed upon the same footing with sealed writings, containing the same stipulations, receiving the same consideration in all courts of justice, and to all intents and purposes having the same force and effect as a writing under seal,"

and then concluded with the usual assignment of the breach by nonpayment of the note. The fifth count differed from the fourth principally in alleging

"that the principals and sureties, by their certain writing obligatory, duly executed by them without a seal, bearing date . . . and here shown to the court, did promise, . . ."

and contained a like averment with the fourth of the force and effect of such an instrument by the laws of Kentucky. The defendant demurred generally to the fourth and fifth counts, and the district court sustained the demurrers.

By the court:

"We are of opinion that the fourth and fifth counts are, upon general demurrer, good, and that the judgment of the court below as to them was erroneous. They set out a good and sufficient cause of action in due form of law, and the averment that the contract was made in Kentucky and that, by the laws of that state, it has the force and effect of a sealed instrument does not vitiate the general structure of those counts, founding a right of action on the"

note set forth thereon. At most, they are surplusage, and if they do not add to they do not impair the legal liability of the defendant, as asserted in the other parts of those counts.

According to the laws of Virginia, the defendant had a right to plead as many several matters, whether of law or fact, as he should deem necessary for his defense, and he pleaded "nil debet" to the three first counts of the declaration, on which issue was joined. The defendant also pleaded the statutes of limitation of Virginia to the other counts. The court held the plea of the statute of limitations a good bar to all the counts, and gave judgment in favor

Page 33 U. S. 362

of the defendant. The statute of limitations of Virginia provides that all actions of debt, grounded upon any lending or contract without specialty shall be commenced and sued within five years next after the cause of such action or such suit, and not after. The act of Kentucky of 4 February, 1812, provides

"That all writings hereafter executed without a seal or seals stipulating for the payment of money or property or for the performance of any act, duty, or duties shall be placed upon the same footing with sealed writings containing the like stipulations, receiving the same consideration in all courts of justice and to all intents and purposes having the same force and effect, and upon which the same species of action may be founded, as if sealed."

Held that the statute of limitations of Virginia precluded the plaintiffs recovery in the court where the action was instituted, the statute pleaded, the statute of Kentucky, not being available in Virginia.

As the contract upon which the original suit was brought was made in Kentucky and is sought to be enforced in the State of Virginia, the decision of the case in favor of the defendant upon the plea of the statute of limitations will operate as a bar to a subsequent suit in the same state, but not necessarily as an extinguishment of the contract elsewhere, and especially in Kentucky.

The general principle adopted by civilized nations is that the nature, validity, and interpretation of contracts are to be governed by the laws of the country where the contracts are made or are to be performed. But the remedies are to be governed by the laws of the country where the suits brought or, as it is compendiously expressed, by the lex fori. No one will pretend that because an action of covenant will lie in Kentucky on an unsealed contract made in that state, therefore a like action will lie in another state where covenant can be brought only on a contract under seal.

It is an appropriate part of the remedy which every state prescribes to its own tribunals, in the same manner in which it prescribes the times within which all suits must be brought. The nature, validity, and interpretation of the contract may be admitted to be the same in other states, but the mode by which the remedy is to be pursued and the time within which it is to be brought may essentially differ. The remedy in Virginia must be sought within the time, and in the mode, and according to the descriptive characters of the instrument known to the laws of Virginia, and not by the description and characters of it presented in another state.

An instrument may be negotiable in one state which yet may be incapable of negotiability, by the laws of another state, and the remedy must be in the courts of the latter on such instrument according to its own laws.

The plaintiffs in error instituted an action of debt in the District Court of the Western District of Virginia, to November term, 1829, against the defendant, he being the only party to the instrument sued upon who was found within the jurisdiction of the court.

Page 33 U. S. 363

The declaration contained five counts upon the following note executed by the defendant and several others:

"June 26, 1832. $12,877. Sixty days after date, we, Campbell Vaught & Co., as principals, and David Campbell and Steele, Donnally & Steeles, as sureties, to promise to pay, jointly and severally, to the order of the president, directors, and company of the Bank of the United States, without defalcation, $12,877, negotiable and payable at the office of discount and deposit of the said bank at Louisville, Kentucky, value received, with interest thereon at the rate of six percentum per annum thereafter, if not paid at maturity."

"CAMPBELL, VAUGHT & CO."

"DAVID CAMPBELL"

"STEELE, DONNALLY & STEELES"

The first, second, and third counts in the declaration set out the note as a simple contract debt, to which the defendant pleaded "nil debet" and the statute of limitations of Virginia, and the plaintiff filed replications, to which the defendant demurred. Judgment in favor of the defendant was entered by the court on these three counts.

The third and fourth counts were as follows:

"And whereas also the said Andrew Donnally and Richard Steele, William Steele, Robert M. Steele, and Adam Steele, partners trading under the firm of Steele, Donnally & Steeles, heretofore, to-wit, on 26 June, 1822, and in the lifetime of said Adam Steele, Robert Steele, and William Steele, since deceased, at Louisville, in the State of Kentucky, to-wit, at the district aforesaid, with one David Campbell and the firm of Campbell Vaught & Co., made their other note in writing; which said note, signed by the said firm of Steele, Donnally & Steeles, and dated the day and year aforesaid, is to the Court here shown, and thereby promised jointly and severally, the said Campbell Vaught & Co. as principals, and the said David Campbell and the said Steele, Donnally & Steeles, as sureties, sixty days after the date thereof, to pay to the order of the president, directors, and company of the Bank of the United States, without defalcation, the sum of $12,877, negotiable and payable at the office of discount and deposit of said bank at

Page 33 U. S. 364

Louisville, Kentucky, value received, with interest thereon at the rate of six percentum per annum thereafter if not paid at maturity. And plaintiffs aver that said note in writing, so as aforesaid made at Louisville in the State of Kentucky and payable at said place, was and is a writing without seal stipulating for the payment of money, and that the same, by the law of Kentucky entitled 'An act to amend the law of proceedings in civil cases, approved February 4, 1812' (an extract from which said law, duly authenticated under the seal of the said State of Kentucky and duly certified is to the court here shown), is placed upon the same footing with sealed writings containing the like stipulations, receiving the same consideration in all courts of justice and to all intents and purposes having the same force and effect as a writing under seal. And although said sum of money in said last mentioned note specified has long been due and payable according to the terms of said note, yet the said Andrew Donnally, Richard Steele, Robert M. Steele, Adam Steele, and William Steele, in the lifetime of said Robert M., Adam, and William Steele, and the said Donnally and Richard Steele, since the death of said Robert M., William, and Adam Steele, have not, nor has either of them, nor has the said David Campbell or the said firm of Campbell Vaught & Co., or either of them, paid unto said plaintiffs said last mentioned sum of $12,877 or any part thereof, but to pay the same or any part thereof to said plaintiff, the said firm of Steele, Donnally & Steeles in the life of the said deceased partners, and the said David Campbell and Campbell Vaught & Co, refused, and the said defendant and Richard Steele, surviving partners of the late firm of Steele, Donnally & Steeles, still refuse. By reason whereof, an action hath accrued to said plaintiffs to demand and have of and from said defendant said last mentioned sum of $12,877, other parcel of said sum of money above demanded."

"And for that whereas afterwards, to-wit, on 26 June in the year 1822, at Louisville, in the State of Kentucky, to-wit, at Clarksburg, in this district, the aforesaid Campbell Vaught & Co. as principals, and the aforesaid David Campbell and Richard Steele, Andrew Donnally, Adam Steele,

Page 33 U. S. 365

Robert M. Steele, and William Steele, as securities, the said Richard, Andrew, Adam, Robert, and William, acting under the firm and style of Steele, Donnally & Steeles, by their certain writing obligatory, duly executed by them, without a seal, bearing date the same day, and here shown to the court, did promise and bind themselves, jointly and severally, to pay the plaintiffs, without defalcation, another sum of $12,877, negotiable and payable at the office of discount and deposit of the said plaintiffs at the aforesaid town of Louisville, in Kentucky, with interest thereon at the rate of six percentum per annum thereafter if not paid at maturity. And the said plaintiffs in fact say that though the said last mentioned sum of money, when due and payable according to the tenor and effect of said writing, to-wit, on 28 August, 1822, at the office of discount and deposit aforesaid, was duly demanded, the same was not paid by the said Campbell Vaught & Co., David Campbell and Steele, Donnally & Steeles, or by any or either of them, nor have the said Campbell Vaught & Co., David Campbell and Steele, Donnally & Steeles, or any or either of them, at any time paid the same, or any part thereof, but the same to pay, they, and each of them, though often requested, have altogether failed, and refused, and still do refuse, and the said plaintiffs further in fact say that the said writing was duly made and payable at the aforesaid town of Louisville, a place within the Commonwealth of Kentucky and subject to laws thereof, and that the same writing, executed without a seal, was, at the time of its execution, and ever has been, and is now, by the laws of the said Commonwealth of Kentucky then and still in force, upon the same footing with a sealed instrument containing like stipulations, entitled to the same consideration in all courts of justice, and having to all intents and purposes the same force and effect as it would if sealed. By reason thereof the plaintiffs are entitled to demand and recover of the said Andrew Donnally, one of the said obligors in the said writing, the aforesaid sum of $12,877, with interest as aforesaid, other parcel of the debt above demanded."

To the fourth and fifth counts demurrers were filed by the defendant, and there was a joinder in demurrer. The district

Page 33 U. S. 366

court gave judgment in favor of the demurrers. The defendant also pleaded to these counts "nil debet" and the statute of limitations of Virginia. The plaintiffs demurred to the plea of the statute of limitations of Virginia and to the plea of nil debet on the fourth count, and joined issue on the plea of nil debet.

The statute of limitations of Kentucky, referred to in the fourth and fifth counts, was passed February 4, 1812, and is as follows:

"An act to amend the law of proceedings in civil cases. Approved, Feb. 4, 1812."

"Sec. 8. Be it further enacted by the authority aforesaid, that all writings hereafter executed without a seal or seals stipulating for the payment of money or property or for the performance of any act, duty, or duties shall be placed upon the same footing with sealed writings containing the like stipulations, receiving the same consideration in all courts of justice and to all intents and purposes having the same force and effect and upon which the same species of action may be found as if sealed."

The district court held the plea of the statute of limitations of Virginia a bar to all the counts, and gave judgment on all the demurrers for the defendant, with the general conclusion that the plaintiffs take nothing by their bill, &c.

The plaintiffs prosecuted the writ of error.

Page 33 U. S. 368



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