Case Name: Bank of Marietta v. Pindall; Same v. M'Cally; Same v. Wilson
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1824-05-31
Citations: 2 Rand. 465
Docket Number: 
Parties: Bank of Marietta v. Pindall. Same v. M’Cally. Same v. Wilson.
Judges: 
Reporter: Virginia Reports
Volume: 23
Pages: 394–398

Head Matter:
Bank of Marietta v. Pindall. Same v. M’Cally. Same v. Wilson.
May, 1824.
Foreign Corporation — Power to Sue in Virginia. — A corporation of another State may maintain an action against its debtor in the Courts of Virginia.
Foreign Bank — Enforcement of Primary Contract.— But a Bank of another State cannot enforce a primary contract made in Virginia, as by discounting notes or otherwise.
Bonds — Assignment—What It Means. — Assignment, as to bonds or notes, implies more than endorsement. It means endorsement by one party, with intent to assign, andan acceptance of that assignment, by the other party.
These were appeals from the Superior Court of Lav/ for the county of Harrison. The Bank of Marietta, in the State of Ohio, brought three actions of debt against the three defendants ♦mentioned above, on promissory notes, executed to third persons, made payable at the bank of Marietta. The declarations state, that the Bank aforesaid was incorporated by the Legislature of the State of Ohio; that afterwards, the respective defendants, by their promissory notes in writing, signed with their hands, and dated, &c., and now produced in Court, at Marietta, to wit: at I-Iarrison county aforesaid, promised to pay the respective sums mentioned in the notes, to their respective payees, and the notes were by the said payees, assigned to the said Bank.
The defendants demurred generally to the declarations, and the plaintiff joined in demurrer. They also filed special pleas, stating that the promissory notes in the declaration mentioned, were made and subscribed by the defendants, and endorsed by the payees respectively, within the Commonwealth of Virginia, to wit: at the county of Harrison, and not elsewhere; and that the Bank of Marietta is not, and at the time of making, subscribing and endorsing the said promissory note, was not, and never hitherto has been, incorporated or made a body politic or corporate, by any Legislative act of this Commonwealth. To these pleas the plaintiff demurred generally, and the defendants joined in demurrer.
The Court sustained the demurrer of the defendants to the declarations, and overruled the demurrers of the plaintiff to the pleas. Judgment was accordingly rendered for the defendants, in all the cases.
The plaintiff appealed.
Stanard, for the appellant.
The only question is, whether a foreign corporation can maintain an action in Virginia, in its corporate name. There is no case in Virginia on this subject, and but one in the English books. That case is Henriquez v. The Dutch Fast India Company, 2 Lord Raymond, 1532. A part of the same case was decided in 1 Strange, 012. *This is an express authority in favor of the right of the foreign corporation to sue. The same principle is affirmed in the case of the Portsmouth Livery Company v. Weston et ah, 10 Mass. Rep. 91.
The truth is, that foreign corporations have as much right to sue, as foreign persons. The right of the latter is unquestioned; but both stand on the same ground, as neither are subject to our laws. Even foreign Sovereigns may sue in the English Courts. Nabob of Arcot v. East India Company, 4 Bro. Ch. Rep. 187, (note.)
But, even if the general question were against me, I contend that Banking corporations are an exception. They are protected by our laws, which punish forgeries of Bank notes of other States. 1 Rev. Code, 578. The consequences of the opposite doctrine would be mischievous in the extreme. All the commerce of the country is connected with Banks. They cannot sue in the Federal Courts; because, it has been decided, that a corporation has no locality.
It may be asked, whether a contract with a foreign corporation, made within the limits of Virginia, can be enforced in Virginia? Tn answer to this, it may be observed, that this contract does not depend upon the laws of Virginia, but upon those of Ohio. As a general rule, the lex loci contractus is to govern. But, there are two exceptions: 1. Where the subject of the contract is fixed in another State; and, 2. Where the contract is to be performed in another country.
Here the debts were to be paid at Marietta, and the default took place there. The default, and not the contract, is the substratum of the action. This point was decided in the case of Robinson v. Bland, 2 Burr. 1077.
In two of the cases, there is no venue laid of the assignment, and, therefore, as to them, non constat, but that they were made in the State of Ohio.
The pleas merely state, that the factum of the endorsement was done in the county of Harrison; but, they do *not state that the notes were transfe.rred at that time and place to the Bank of Marietta. But, even if it were otherwise, many cases may be supposed, in which a transfer might be lawfully made to the Bank, even in Virginia. Suppose the notes were assigned by debtors of the Bank to relieve themselves from judgments in Virginia. Or, a bail-bond might have been given, and the Sheriff assigned it to the Bank. Surely the debtor, in such cases, might make a compromise with his creditor. Banks usually deal in bills of Exchange. If they cannot sue in other States, they would be without remedy in such cases.
These notes can only be considered in one of two lights. They were either made for negotiations at the Bank of Marietta, or they were subsisting notes, and transferred to the Bank in payment oí a debt. In the first case, the transaction must have originated in Ohio; in the second, it was of no importance where they were made. The debtor must surely have the power of availing- himself of the means of paying his debts.
The case of the unchartered Banks in this Court, 1 Rand. 76, lias no influence on this question. That decision depended on the law of 1805, and relates only to unincorporated Banks. It was not like the law of New York, which forbids all companies not having a charter from the State, from carrying on Banking operations.
The only remaining question is, whether the statement in one of the declarations, that the charter was to continue until 1818, does not destroy the right to sue. This question is answered, by saying, that it must be presumed that the plaintiffs proved they were a corporation, or they could not have maintained their action. The question of corporation or not, is for the jury to decide, and not the Court. Jackson v.
Plumb, 8 Johns. 877.
*Wickham, for the appellees.
It ruay be laid down as a general proposition, that a foreign corporation cannot sue in a Virginia Court. If this proposition be true, it is incumbent on Mr. Stanard to shew that a Bank in Ohio is not a foreign corporation. A corporation is an artificial being, created by the common law. They are not necessary attributes of government. There may be corporations in some countries, without the right to sue by their corporate name. Tf the law of Virginia did not authorise the creation of corporations, could the Bank of Ohio maintain an action in Virginia?
Viner, in his 6th volume, p. 265, supports the position, that a foreign corporation cannot sue in the English Courts. As to the case of Henriquez v. The Dutch East Tndia Company, reported both by Lord Raymond and Strange, it does not decide this point. There is nothing said in that case, of the corporation being a foreign corporation. It is, at most, only a decision of the Court of Common Pleas. Lord Raymond gives a more accurate report of the case. According to him, the case related to the liability of bail; but tlie question at bar was not touched. The case merely decides that the bail was estopped, from averring that there was no such corporation.
The first case which relates to the subject, is that from Massachusetts. It is to be remarked, that Massachusetts has no Court of Chancery; but, their Courts decide Chancery causes under the forms of Common Law. This decision was made by virtue of their Chancery jurisdiction, and cannot be a precedent for a purely Common Law Court. It is not necessary for me to contend that a Court of Chancery would not have jurisdiction of such a case as the present.
The case of the Silver Take Bank v. -, 4 Johns. 370, is founded on that of Henriquez v. The Dutch East India Company, and evidently mistakes the point decided in that case. 470 ^English assignees of a bankrupt cannot sue in this country, at least at Common Daw. Harrison v. Terry, 5 Cranch, 889; 4 Wheat. 309; Dixon v. Ramsay, 3 Cranch, 334. All arguments from inconvenience, must be addressed to the Legislature. How far a Court of Equity can give relief, it is not material ,to en-quire. It is sufficient for my purpose, to shew that a Court of Common Law cannot afford any.
It is said that the plea of default will give the law. But, the pleadings do not disclose that Marietta in Ohio is that place. The declarations does not state where the Bank of Marietta does business. The name does not shew where this Bank was placed. There may be many places of the same name in the United States.
It was necessary to state in the declaration, that this corporation had a right to sue. It would be otherwise in the case of a Virginia corporation, because their right to sue would result from their being a corporation.
The case of the Nabob of Arcot was in the Court of Chancery.
Stanard, in reply.
As to the objection, 'that it does not appear that this corporation had a right to sue, this right is implied in the term corporation. It is not remarkable that there is but one case in the English books, on this subject; as there is but one where the Bank of England was plaintiff.
The dictinction between common law and equity, cannot be sustained. If the plaintiff was a non-entity, he could not sue in either Court.
The case in Raymond at least decides, that the Dutch East India Company was a good name to sue by.
The case of the assignees of a bankrupt is unlike the present. That is a case which is governed by the law of the forum; this is governed by the lex loci. 3 Dallas, 370.
_ *As to the term of the charter having expired, I answer: 1. That it was of no importance to state the term of the charter. 3. That the charter may have been extended. 3. That it is confessed by the record, that it was in existence, by taking judgment against the Bank.
May 31.
For sequel of principal case, see Pindall v. Bank 10 Leigh 481. See also. Jackson v. Bank of Marietta. 9 Leigh 241, 243, in which an action was brought on the same note, on which action was brought in the principal case.
Foreign Corporations — Power to Sue in Virginia.— A foreign corporation may sue in our courts upon a contract with them valid according to the laws of the country in which the contract was made, unless it is contrary to the policy of our laws. Bees v. Conococheague. Bank, 5 Band. 326, citing principal case' as so deciding. And. in Taylor v. Bank of Alexandria, 5 Leigh 475. Tucker. P., who delivered the opinion of the court, said: "If the object of the demurrer to the declaration was, to try the right of a foreign corporation to sue, that right is settled by the case of Bank of. Marriettav. Pindall. 2 Band. 465. in which my brother CabeI/U has, with his accustomed clearness, established the affirmative of the proposition, upon the soundest reason." See principal case also cited in Freeman’s Bank v. Buckman. 16 Gratt. 132.
See further, monographic note on "Corporations (Private),’’appended to Slaughter v. Com., l3Gratt. 767.
Foreign Banks. — See monographic note on “Banks and Banking,” appended to Bank v. Marshall, 25 Gratt. 378.
Bonds — Assignment—What It Means. — In welsh v. Ebersole, 75 Va. 657. it Is said: "The term: ‘endorse,’ therefore, when applied to bills of exchange and other negotiable instruments, imports a transfer of the legal title. But with respect to bonds and other securities not negotiable, the equitable title passes by assignment only. And this court in Bank of Marietta v. Pindall. 2 Band. 475, said, as to these common-law obligations, endorsement is not equivalent to assignment. As to these assignments meaning more than endorsement: it means endorsement by one party with intent to assign and an' acceptance of that assignment by the other parti'. That case, however, and the case of Freeman’s Bank v. Buckman, 16 Gratt. 126. seem to establish fully the doctrine that endorsement of the obligee’s name upon the bond accompanying the transfer may be declared on as a common-law assignment, and that an averment that the instrument was endorsed and. delivered is in effect an averment that it was.assigned. Both of these cases were, however, decided upon a demurrer to the declaration. They do not establish that such an endorsement may not be treated as a guaranty if such was the agreement of the parties.” See principal case also cited in Freeman’s Bank v. Buckman, 16 Gratt. 130, 133.
See monographic note on “Assignments” appended to Ragsdale v. Hagy, 9 Gratt. 409.
The principal case is cited with approval in Wilson v. Fotterall. 7 Leigh 210: Slaughter v. Com., 13 Gratt. 774; Shipman v. Bailey, 20 W. Va. 144,146.

Opinion:
JUDGE CABELL,
delivered the opinion of the Court.
The President, Directors and Company of the Bank of Marietta, incorporated by a law of the State of Ohio, brought actions of debt, in the Superior Court of Law for the county of Harrison, against M'Cally, against Pindall, and against Wilson, severally, on promissory notes executed to third persons, made payable at the Bank of Marietta, and assigned to the plaintiffs. The defendants demurred, generally, to the declarations, and the plaintiffs joined in the demurrers. The defendants, also, put in special pleas, stating, in substance, that the notes were made and signed by them, and endorsed by the payees, within this Commonwealth, viz: at the county of Harrison, and not elsewhere; and that the plaintiffs were not a corporate body by any law of this State. To these pleas, the plaintiffs demurred generally, and the defendants joined in the demurrers.
On these pleadings, two questions have been made:
1. Whether a Banking Company, not incorporated as such by any law of Virginia, but by a law of one of our sister States, can prosecute an action in Virginia, in its corporate name and character, on any contract whatever?
3. Whether they can prosecute an action in our Courts oh a contract made in Virginia?
1. As to the first question:
It is a principle of universal justice, that the rights and obligations of contracts, valid at the place and time of their inception, do not depend on the residence of the contracting parties. They follow and attend the parties *wherever they may be, or wherever they may go. This is a principle of universal convenience, as well as of justice; and it is recognized as such by all civilized nations. Hence it is, that they lend the aid of their civil tribunals to enforce contracts made in foreign countries, even where the contracts were intended to have been executed in the country where made, and although one or both of the contracting parties may owe no allegiance to the country where the suit may be brought. In exercising this power, the contracts are expounded according to the laws of the place where made: and thus it is, that the Courts of one country take cognizance of, and execute the laws of another country. The only limitation to this comity of nations is, that each will refuse to execute contracts which are contrary to the policy of their own laws.
These principles, (believed to be incontrovertible,) applied to the cases now before us, must be decisive of the first question.
The appellees, themselves, would not deny the right of the appellants to enforce these very contracts, if they were natural and not artificial persons, of the State of Ohio. But, the appellants, as artificial persons in Ohio, had, according to the laws of that State, the same capacity to contract and acquire rights, in their corporate name and character, as if they had been natural persons. Rights acquired, in that name and character, are not less protected by the laws of Ohio, nor less sanctioned by eternal justice, than rights acquired by natural persons. In executing contracts made abroad, our Courts are, in many instances, required by justice, and allowed by the comity of nations, to look beyond our own laws, and to regulate their decisions, as to the obligation of contracts in relation to their subject matter, by the laws of other countries. Thus, although, according to our own laws, a man is not allowed to reserve on a contract for the loan or forbearance of money, a greater rate of interest than six per centum per annum, yet, if a contract, reserving a greater rate of interest *lhan 6 per cent., be made in a country whose laws authorise such greater rate, our Courts would not hesitate to enforce its strict execution. If the obligation of contracts, as to their subject matter, is thus to be decided and enforced in our Courts, by reference to the laws of the country where made, justice, and the comity of nations, equally require that their obligation, in relation to the contracting parties, should depend on the same laws, and be enforced by our Courts accordingly. It is impossible to imagine a difference between the two cases.
On principle, therefore, there seems to be nothing in the objection, that the appellants, suing as a corporate body, do not owe their existence, as such, to the laws of this Commonwealth. Nor is it supported by any authority, in England, or in this country, ft is, indeed, remarkable that but one case has been found of a suit, in the English Courts, by a foreign corporation. The Dutch East India Company v. Van Moses, 1 Str. 612; and a branch of the same case, Henriquez v. The Dutch East India Company, reported in 2 Str. 807, and in 2 Ed. Raym. 1532. It seems to be somewhat a matter of contest between the counsel, in the cases before us, whether the objection now under consideration was actually made and decided in the English case above referred to. As to the point seems to us so clear, on principle, as not to need the support of authority, we do not deem it necessary to determine, with precision, how far it was actually made and decided in that case. The action of the plaintiffs, in that case, was certainly liable to the objection; and whether it was actually made, or not, the action prevailed. The objection has been raised in the Courts of New York, and of Massachusetts, and has been disregarded.
Every argument in favor of entertaining, in our Courts, suits by corporations, created by the laws of a country not forming part of the American confederacy, applies with double force to corporations of our sister States. It is rendered doubly necessary by the intimacy of our political minion, and by the freedom and frequency of our commercial intercourse.
Nor is there anything in the nature of this corporation, or of the contract on which they sue, contrary to the policy of our laws. We claim no right to interfere in the municipal regulations of foreign nations, or of our sister States. We claim no powrer to create corporations for carrying-on Banking operations beyond our own limits. But, it is our policy to prevent other nations and States, and the corporations of other nations and States, from doing that towards us, which we forbear to do towards them. It is our policy to restrain all Banking operations by corporations not established by our own laws. It would not, therefore, be permitted to a Bank in Ohio, to establish an agency in this State, for discounting notes, or for carrying on any other Banking operations; nor could they sustain an action on any note thus acquired by them. But, there is nothing in the policy of our laws, which restrains our citizens from promoting their accommodation and interest by borrowing money from a Bank in Ohio. It is not the policy of our laws to restrain one citizen of Virginia from executing to another citizen, or to a foreigner, a note payable at the Banking-house of a Bank legally constituted in Ohio; nor to prevent such Bank from taking an assignment of such note by discounting it in Ohio. We can have no doubt, but that the Bank may recover by suit in Virginia, a debt thus contracted.
It was earnestly, and with great appearance of reason, contended by the counsel for the appellants, that, as incidental to the right of recovering, in Virginia, a debt, acquired by an original and legal contract in Ohio, they might legally make, in Virginia, a secondary contract for carrying into effect a contract originally and legally made in Ohio; as, for instance, that they might take from a debtor, in Virginia, the assignment of a note or other chose in action, in payment of a debt originally and legally contracted in Ohio. But, as this point does not necessarily *present itself in these cases, we forbear to express any opinion upon it.
So far, then, as relates to the first and general question, viz: the right of the appellants to sue as a corporation, we think the demurrers to the declarations should have been over-ruled, and the demurrers to the pleas should have been sustained.
2d. As to the second question: have the appellants a right to prosecute actions in our Courts, on contracts made in Virginia?
We have already stated, that no foreign Bank could make a primary contract in Virginia, by discounting notes, or otherwise. No right of action, therefore, could arise from the exercise of such a power.
But, do the pleadings in these cases shew that the contracts of assignment, by which the appellants claim, were made in Virginia?
Eet us first examine the special pleas of the defendants. We do not think that they alledge, or intended to alledge, that the assignment was made in Virginia. The declaration in the case against M'Cally avers, that the payee of the note "endorsed and assigned the same by his writing on the back thereof, to the plaintiffs;" and the declarations in each of the other two cases, aver, that the payee, by his endorsement on the said note, assigned it to the plaintiffs, but all the declarations are silent as to the place where the assignment was made. How are these averments in the declarations met by the pleas? Not byr the allegation that the notes were assigned to the plaintiffs in Virginia; nor even by the allegation that they were endorsed to the plaintiffs in Virginia; but simply, that they were endorsed in Virgina. The term endorse, when applied to bills of exchange, negotiable by the custom of merchants, or to papers made negotiable by our statutes, may, ex vi termini, import a legal transfer of the title. But, as to bonds and notes, not negotiable, the legal title to them passes by assignment only; and as to them, endorsement is *not equivalent to assignment. As to them, assignment means more than endorsement; it means endorsement by one party, with intent to assign, and an acceptance of that assignment, by the other party. The notes in question are not negotiable, according to our laws, but assignable only. The pleas, therefore, that they were endorsed in Virginia, tendered immaterial issues, and were properly demurred to. It may have been the intention of the pleader to entrap the plaintiffs, if they 'took issue, by confining the proof to the mere fact of the payees writing their names on the backs of the notes; and this is rendered .probable, by the circumstance that the notes are not alledged by the pleas to have been endorsed to the plaintiffs. They might well be endorsed in Virginia, and assigned in Ohio. The question, therefore, whether the appellants could sue, in our Courts, on a contract made in Virginia, is hot presented by the pleas.
Let us next examine the declarations and the general demurrers thereto. The declarations, in all the cases, alledge that the notes were assigned by the payees to the plaintiffs; but do not state where the assignments were made. The effect of the demurrers is to admit the assignments, as laid in the declaration. If these assignments were made in Ohio, they were lawful, and will serve as the foundation for suits in our Courts; if they were made in Virginia, as original contracts, they were null and void, and can give no right of action. In the total absence of all allegations by either plaintiffs or defendants, as to the place where the assignments were made, we do not feel ourselves constrained to intend that they were made at a place where the parties had no right to make them, and where the attempt to make' them would be vain and nugatory. Oil the contrary, we think, that on these pleadings, the assignments must be taken to have been made at the Bank of Marietta, where the notes were originally made payable, and where the appellants had a right to discount them. If the assignments had been actually made *in Virginia, and the defendants had wished to avail themselves of that fact as a defence, there were two courses by which they might have accomplished .that object. Thejr 'might have pleaded the fact specially, in which case the plaintiffs would have been bound to take issue, or to demur; or they might have demurred specially to the declaration, assigning for cause, that the plaintiffs had not laid the assignments at a place where they could lawfully receive them. This objection, as to matter of form, might have been fatal on a special demurrer. But, we think it is too late to take advantage of it, after a general demurrer. It is _ certain, that the defendants could not avail themselves of it, for reversing the judgment, after verdict; and for this, we refer to the case of Buster v. Ruffner, 5 Munf. 27, in which the venue was laid in a county different from that in which the suit was brought.
The judgments must be reversed; the demurrer to the declarations over-ruled; the demurrers to the pleas sustained; and judgments entered for the plaintiffs for principal and interest, according to the notes, and for the costs, &c.