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

Syllabus

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


Opinions

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

ERROR TO THE DISTRICT COURT OF THE UNITED

STATES FOR THE WESTERN DISTRICT OF VIRGINIA

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

MR. JUSTICE STORY delivered the opinion of the Court.

The original suit was an action of debt brought by the Bank

Page 33 U. S. 369

of the United States upon a promissory note dated 26 June, 1822, whereby, sixty days after date, Campbell Vaught & Co. as principals, and David Campbell and Steele, Donnally (the defendant) and Steeles, 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, upon the three first of which it is unnecessary to say anything, as the judgment thereon is not now in controversy. 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, &c., 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 having a right, according to the laws of Virginia, to plead as many several matters, whether of law or fact, as he should deem necessary for his defense, pleaded nil debet to the three first counts of the declaration (on which issue was joined) and the statute of limitations of Virginia to the same counts, to which there was a special replication and a demurrer to that replication and joinder in demurrer. To the fourth and fifth counts the defendant demurred generally, and there was a joinder in demurrer. He

Page 33 U. S. 370

also pleaded to the same counts nil debet and the statute of limitations of Virginia. The plaintiffs demurred to the plea of the statute of limitations, to these latter counts, and also to the plea of nil debet to the fourth count, and joined issue on the plea of nil debet to the fifth count. The court held the plea of the statute of limitations a good bar to all the counts, and accordingly gave judgment upon all the demurrers in favor of the defendant, with the general conclusion that the plaintiffs take nothing by their bill. The present writ of error is brought to revise this judgment.

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. But a general judgment in favor of the defendant upon his demurrer to the declaration (it is supposed) may, as a judgment upon the merits of the claim, have a very different operation, as a res judicata or final judgment. Hence there arises a very important consideration as to the correctness of the judgment upon that demurrer. It has accordingly been argued at large by the counsel for the bank as vital to the rights as well as to the remedies of the bank in other states. 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 averments 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, do not vitiate the general structure of those counts founding a right of action on the note set forth thereon. At most, they are but 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.

The other point growing out of the statute of limitations pleaded to the fourth and fifth counts (for as to the three first counts it is conceded to be a good bar) involves questions of a very different character as to the operation and effect of a conflict of laws in cases governed by the lex loci. The statute of

Page 33 U. S. 371

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 suit, and not after. This being the language of the act, and confessedly governing the remedy in the courts of Virginia, the bar of five years must apply to all cases of contract which are without specialty, or in other words, are not founded on some instrument acknowledged as a specialty by the law of that state. The common law being adopted in Virginia, and the word "specialty" being a term of art of that law, we are led to the consideration whether the present note is deemed in the common law to be a specialty. And certainly it is not so deemed. It is not a sealed contract, nor does it fall under any other description of instruments or contracts or acts known in the common law as specialties. The argument does not deny this conclusion, but it endeavors to escape from its force by affirming that the note is a specialty according to the laws of Kentucky, and if so, that this constitutes a part of its nature and obligation, and it ought everywhere else, upon principles of international jurisprudence, to be deemed of the like validity and effect.

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."

Now it is observable that this statute does not in terms declare that such writings shall be deemed specialties; nor does it say that they shall be deemed sealed instruments. All that it affirms is that they shall be put upon the same footing as sealed instruments, and have the same consideration, force, effect, and remedy as sealed instruments. So that it is perfectly consistent with the whole scope and object of the act to give them the same dignity and obligation as specialties, without intending to make them such. A state legislature may certainly provide that the same remedy shall be had in a promissory note as on a bond or sealed

Page 33 U. S. 372

instrument, but it will not thereby make the note a bond or sealed instrument. It may declare that its obligation and force shall be the same as if it were sealed, but that will still leave it an unsealed contract. *

But whatever may be the legislation of a state as to the obligation or remedy on contracts, its acts can have no binding authority beyond its own territorial jurisdiction. Whatever authority they have in other states depends upon principles of international comity and a sense of justice. The general principle adopted by civilized nations is that the nature, validity, and interpretation of contracts are to be governed by the law 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 suit is 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 both 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 prescribed 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.

If, then, it were admitted that the promissory note now in controversy were a specialty by the laws of Kentucky, still it would not help the case unless it were also a specialty, and recognized as such, by the laws of Virginia, for the laws of the

Page 33 U. S. 373

latter must govern as to the limitation of suits in its own courts and as to the interpretation of the meaning of the words used in its own statutes.

It may be added that neither the fourth count nor the fifth count of this declaration avers the note to be a specialty, nor does either assert it to be a sealed writing, but the contrary, so that the Court is called upon to make an intendment as to the operation of a foreign law which, if essential to the case, should have been directly stated, and not left to mere inference.

The case, however, is not without authority, even if it were not clear upon principle. In Warren v. Lynch, 5 Johns. 239, where a promissory note was made in Virginia, payable in New York, and the maker signed it with a scrawl, which, in Virginia, is deemed to be a seal, on a suit in New York it was held to be an unsealed instrument (the laws of New York recognizing no instrument as sealed unless such as are with a wax or wafer seal), and therefore that the proper form of action was assumpsit, and not debt. In Andrews v. Herriot, 4 Cowen 508, it was held that an action of covenant will not lie in New York on a contract to be performed in Pennsylvania where there was a scrawl instead of a seal in the locus sigilli;, although, by the law of Pennsylvania, a scrawl is deemed a seal. In Trasher v. Everhart, 3 Gill & Johns. 234, it was held that in case of a single bill made in Virginia (where it is not deemed a specialty), sued in Maryland, an action of assumpsit is not maintainable as upon a simple contract, but must be debt, because in Maryland, such single bill is deemed a specialty. The doctrine of these cases seems directly in point, and a very close analogy may be found in the case of Jones v. Hook's Administrator, 2 Randolph 303, where the Court of Appeals of Virginia held, in an action of debt upon a judgment of North Carolina brought in Virginia, that the statute of limitations of North Carolina was no bar, but that of Virginia, if applicable, governed the remedy.

Upon the whole, our opinion is that the judgment upon the demurrer by the defendant to the fourth and fifth counts, ought to be

Reversed, and that in all other respects it ought to be affirmed. But, as the plea of the statute of limitations is a good bar to all the counts, the judgment of the court below that

Page 33 U. S. 374

the plaintiffs take nothing by their writ is right and ought to be affirmed with costs.

This cause came on to be heard on the transcript of the record from the District Court of the United States for the Western District of Virginia and was argued by counsel, on consideration whereof it is considered by the Court here that the judgment of the District Court of the Western District of Virginia is erroneous in this, that upon the demurrer of the said Donnally to the said fourth and fifth counts in the said declaration, the judgment ought not to have been as is set forth in the record, but ought to have been that the fourth and fifth counts aforesaid are good and sufficient in law to have and maintain the action aforesaid of the plaintiffs aforesaid for the matters contained therein, and it is further considered by the Court here that the special pleas pleaded by the said Donnally of the statute of limitations to the first, second, and third counts of the said declaration are good and sufficient in law to preclude the said plaintiffs from having and maintaining their action aforesaid thereon, notwithstanding the matters set up by the said plaintiffs in their replication to the said special pleas, and it is further considered by the Court here that the special pleas pleaded by the said Donnally to the said fourth and fifth counts of the declaration aforesaid of the statute of limitations, and also of nil debet to the said fifth count, are good and sufficient in law to preclude the said plaintiffs from having and maintaining their action aforesaid, against the said Donnally. And therefore, inasmuch as it appears to the Court here that, upon the whole record, the pleas aforesaid, so as aforesaid pleaded by the said Donnally and adjudged in his favor are, in law, a good and sufficient bar to the action aforesaid upon all the counts contained in the declaration aforesaid, notwithstanding the fourth and fifth counts thereof are otherwise good and sufficient in law; it is therefore considered by the Court here that the judgment aforesaid of the district Court of the Western District of Virginia that the said plaintiffs take nothing by their bill aforesaid be and the same is hereby for this cause affirmed with costs.

* See 4 Griffith's Law Register 1136, note; cases in Kentucky on this point, 1 Marsh. 507.