Case Name: Thomas Powers versus David Lynch
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1807-07
Citations: 2 Tyng 77
Docket Number: 
Parties: * Thomas Powers versus David Lynch.
Judges: 
Reporter: Massachusetts Reports
Volume: 3
Pages: 66–70

Head Matter:
* Thomas Powers versus David Lynch.
The endorser of a bill of exchange, drawn in a foreign country, and endorsed by one who has his residence there, is answerable only according to the laws of that country.
The declaration states that one Samuel Mackay, at Demarara, on the 6th day of February, A. D. 1802, drew a certain order or bill of exchange on one John Clapham, of Boston, for 555 dollars and 90 cents, payable to the plaintiff’s order at 90 days’ sight, and there afterwards, on the same day, the defendant, by his endorsement on said order or bill of exchange, guarantied the payment thereof, and promised that if the drawee did not punctually pay the contents of the bill to the order of the plaintiff, he, the defendant, would pay the same according to the tenor thereof. The declaration then alleges that the bill was presented and at maturity protested for non-payment; that the defendant, as well as Mackay, the drawer, nod due notice, whereby the defendant became liable, and in consideration thereof, promised the plaintiff to pay him the contents of the bill with customary damages.
At the last March term a case was stated for the opinion of the Court, and the cause was argued by Amory and Hall, for the plaintiff, and C. Jackson, for the defendant.
The facts in the case show that the bill was drawn as alleged in the declaration, was endorsed by the defendant as security to the plaintiff, and duly protested. Clapham and the plaintiff are native citizens of the United States, and inhabitants of Boston. Mackay and Lynch are native citizens of the United States, but at the time of this transaction, and for many years before, were inhabitants of Demarara, and settled in business there as merchants. According to the laws of that colony, no person, who had been engaged in mercantile business there, is permitted to denar* therefrom without eaving there an attorney fully authorized to manage his affairs ; which attorney was obliged to give security to be answerable for all demands which might be made against such absentee during his absence, so far as the property belonging to the latter, and put into the charge of the attorney, would go. About the 17th of April, 1802, Lynch left Demarara on a voyage to Europe, with intention to return, as he long since has. On his passage from Europe to Demarara, he touched at Boston, where he was arrested on * this suit in October, 1803. Previous to his leaving [ * 78 ] Demarara, he appointed an attorney, who gave the requisite security, which was registered in the secretary’s office on the said 17th of April. The bill, with the protest accompanied with due powers to recover the amount from whomsoever it might concern, was sent by the plaintiff to his agent at Demarara, who, on the 29th of October, 1802, and several times afterwards, made a demand on Mackay, the drawer, for the amount, &c., who promised payment in a few days, but never fulfilled his promise. The plaintiff’s agent then made inquiry for Lynch’s attorney, but never learned who he was, which he might have known, by applying at the secretary’s office. The said attorney had effects of Lynch during his whole absence sufficient to pay all demands against him, and if the bill had been presented to him under protest, in a proper time and manner, according to the laws of Demarara, he would have paid it out of the effects of his principal. No demand was ever made on him, nor was any notice given to him or to Lynch of the non-pay ment of the bill, until the latter was arrested in October, 1803, as before stated.
By the laws of the colony of Demarara, any person holding a bill of exchange protested for non-payment, and demanding payment thereof from the drawer, thereby loses all remedy against every endorser. Those laws require an extrajudicial demand to be made of the party intended to be charged, before any suit is commenced against him; and the making such a demand of the drawer, even after a demand on the endorser, but before any suit against the lattev will fully discharge him .
Upe n these facts it was argued by the plaintiff’s counsel that this being wholly a mercantile transaction, the general law merchant ought to govern it, and not the laws or usages of the country where the parties happen at the time to reside. But if the law of any one country is exclusively to govern in the construction of a contract, it must be the law of that country where it is to be executed, or in reference to which it was made. Thus, in the case of { * 79 ] Robinson vs. Bland , Lord * Mansfield says, “ A strong reason for the plaintiff’s recovering in this action the money lent, is, that the bill of exchange is payable in England.” Again, “ as this money was payable in England, the law of England must be the rule of recovering it.”
In the case at bar the parties were all citizens of the United States, subject to our laws, and protected by their citizenship during a temporary residence in a colony of a foreign state. The contract, though made in that colony, had reference wholly to this country ; here, and here only, it was to be executed.
It is true that as to the rights of parties under a contract, we must look to the country where it was made for its true construction ; but for the remedy, the laws of that country where the remedy is sought must govern .
For the defendant, it was contended that the defendant’s undertaking had relation wholly to the country where the parties resided, and where the contract was made. It was to be performed there, and there only. The purport of it was, if the drawee does not pay this bill, bring it back to me here, and I will pay it. Damages on protested bills of exchange are always regulated by the laws of the place where they are drawn, not where they are payable ; which shows that the whole obligation of drawer and endorser arises out of the laws of the country where the bill is drawn.
The plaintiff agrees in this case that, by the laws of Demorara, his whole right, as .well as remedy, is gone. The case of Robinson vs. Bland was very different from this. There Bland’s original undertaking was to pay in ten days after his return to England Lord Mansfield says, “ It was an English security; the parties had a view to the laws of England. ■ In every disposition or contract, where the subject matter relates locally to England, the law of England must govern, and must have been intended to govern.”
In Burrows vs. Jemino , it was decided that the acceptor of a bill drawn on Leghorn, and discharged by the local institu- [ * 80 ] tians * in that place, was not liable in England. It is difficult to distinguish the case at bar from this case.
In Potter & Al. vs. Brown , which is the only case where the general principle has been controverted even by counsel, Lord Ellen-borough says, “ The rule was well laid down by Lord Mansfield in Ballantine vs. Golding , that what is a discharge of a debt in the country where it was contracted, is a discharge of it every where.” The circumstances of the plaintiff’s having a house of trade in the United States, and having proved their claim before commissioners there, were not relied on by the counsel in arguing for the plaintiffs, nor by the Court in delivering their opinion.
As to these parties being citizens of the United States, it was answered that the case states them to have been for many years settled as merchants in Demarara. This, then, was the place of their domicil. They, and their property, were to every intent subject to the laws of that country. By those laws the defendant is completely discharged from this demand; and this discharge he apprehends to be a sufficient bar to the present action.
[Quære whether this ever was, or is the law of Demarara. Vide Vanderlinden by Henry, pp. 686, 693, 695, § 18,19.—Van Leeuwen, R. D. Law Book, 5. chap, 13, 14, 15,16, 19.—Mr. Henry is a barrister, and was, prior to 1816, president of Demarara and Essequibo. The Roman Dutch law is the basis of the jurisprudence of the colony There are very few English laws in force there. Vide 2 Howard's Colonial Laws 185 197.—Ed.]
2 Burr. 1083.
2 Vesey, 36.—Thorne vs. Watkins, 1 N. Y. Term R. 402 -Nash vs. Tupper, 2 Term R. 52.—Auriol & Al. vs. Thomas 1 East's Rep. 6.—Smith & Al., vs. Buchanan & Al.
2 Strange, 733.
5 East's R. 124
Cooke’s Bank. L. 515.—See also 4 Term R., Hunter vs Potts

Opinion:
And now, at this term, the opinion of the Court was delivered by
Sedgwick, J.
(After a particular statement of the facts.) It is a principle too well known and established, and founded upon reasons too obvious to require proof or illustration, that contracts are to be construed by the laws of the country where made, and that the respective rights and duties of the parties are to be defined and enforced accordingly; provided it does not appear from the nature of the contract, or from other facts, that, in the contemplation of the parties, the performance of the contract has relation to the laws of another country.
By the facts agreed upon in this case, it appears, 1st. That the contract was entered into " at Demarara." 2d. That at the time of making the contract, both the plaintiff and defendant, * although citizens of the United States, were, and for [ * 81 ] many years had been, settled at Demarara, doing business as merchants. 3d.. That in consequence of what has taken place, in relation to this subject (the facts need not be recapitulated), according to the laws of Demarara, the defendant has become " fully discharged " from the demand which the plaintiff makes upon him.
The principle of law, relative to the construction of contracts by the lex loci where made, is admitted by the counsel for the plaintiff; but they say that the parties to this contract contemplated a performai ce of it in this commonwealth; and that therefore the liability of the defendant must be determined by our laws; that the drawer of a bill undertakes that he has funds in the hands of the drawee ; and that the bill will be duly honored and paid according to its tenor , that when Mackay drew this bill upon Clapham here, he is by law understood to promise that here it shall be paid; and therefore that it was contemplated by the parties that this was the place of the performance of the contract.
What might be the application of this reasoning in the case of a drawer we have not determined, we all being clearly of opinion that it cannot be extended to that of an endorser; the natural import of whose promise is, that, in case the bill shall be dishonored, he will, upon due notice, pay the contents and all damages which shall be sustained. He can know nothing of the relative circumstances of the drawer and drawee; he cannot, therefore, be supposed to promise that the drawee shall duly pay; but he collaterally engages that if he shall not, the endorsee shall be indemnified. Such a promise, it is apparent, made by a merchant, in a place where he is and has been for many years doing business as such, cannot, in the nature of it, contemplate its performance, as to himself, but according to the law of the place where it is made.
We are, therefore, all of opinion that judgment must be rendered for the defendant .
The chief justice, hav.ug teen of counsel, did not sit in the hearing of this cause.
[Story's Commentary Confl. Law, 261, 262, and cases cited.—Prentiss vs. Savage, 13 Mass. 20.—Slocum vs. Pomeroy, 6 Cranch, 221.—Depau vs. Humphreys, 20 Martin, 1.—Hicks vs. Brown, 12 Johns. 142. Pardessus Droit Commercial, No. 1497.—Ed.]