Court Opinion

ID: 8189844
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:12:43.147339+00
Date Added: 2024-06-11T16:40:34.111669
License: Public Domain

Maurttaut., J.
Tbe appeal raises for decision this proposition: Is a married woman’s contract as accommodation *118maker of a promissory note, which is valid in the place where made, enforceable in the courts of this state1, such a contract not being valid if made here % The proposition, in the main, is governed by a few quite elementary principles.
The first principle is this: As to mere personal contracts the law thereof as to their validity and interpretation, is that of the place where they were made; the lex loci contractus?. unless the parties thereto intended that'they should be governed by the law of the place of performance; the lex loci so-lutionis? or of some other placa That is, the place of the contract is, generally speaking, a matter of mutual intention, but the intended place, as determined by legal presumption in some cases and evidentiary circumstances in others, settles all questions as to the legal test of validity and interpretation. Such presumption, in the absence of evidence to the contrary, is that the place of making and performance, in a physical sense, is the place in a legal sense, but the place of performance when different from that of the actual making, is the place in such legal sense, subject to the presumption being rebutted by clear evidence of intention, this being again subject to some exceptions in case of intention to commit a fraud on the law, such exceptions being possible but rare and not concerned in the case in hand. Davis v. C., M. & St. P. R. Co. 93 Wis. 470, 67 N. W. 16, 1132; Shores L. Co. v. Stitt, 102 Wis. 450, 78 N. W. 562; Bartlett v. Collins, 109 Wis. 477, 85 N. W. 703; Brown v. Gates, 120 Wis. 349, 97 N. W. 221, 98. N. W. 205.
Another rule is this: The law of the place of performance regulates the matter in that regard, while matters respecting-remedies depend upon the law of the forum. Brown v. Gates, supra.
A third rule results, logically, from those mentioned, viz.: A contract which is valid in the place thereof is valid everywhere.
A fourth rule is this: The law of one state having, ex pro-*119prio vigore, no validity in another state, the enforcement of a foreign contract which would not he valid by the law of the forum where its enforcement is judicially attempted, depends upon comity which is extended for that purpose, unless the agreement is contrary to the public policy of the state of the forum, in that it is contrary to good morals, or the state or its citizens would be injured by the enforcement, or it perniciously violates positive written or unwritten prohibitory law; the extent to which comity will be extended being very much a matter of judicial policy to be determined within reasonable limitations by each state for itself. Finney v. Guy, 106 Wis. 256, 276, 82 N. W. 595; Hunt v. Whewell, 122 Wis. 33, 42, 99 N. W. 599; Fox v. Postal T. C. Co. 138 Wis. 648, 120 N. W. 399. In the last case cited, referring to The Kensington, 183 U. S. 263, 22 Sup. Ct. 102, the court said:
“Every state, within certain limitations not necessary here to indicate, has a constitutional right to establish its own peculiar policy. That may be done by legislative enactment or by judicial conception and interpretation of the common law,” and we may add here of what is injurious to the welfare of the state or its citizens. “ ‘The general principle that the lex loci governs as to the validity of contracts is subordinate to and qualified by’ . . . the supreme principle which inheres in the very nature of sovereignty, that comity cannot set at naught the public policy of a country.”
A further rule is this: The doctrine that the law of the place of a contract governs as to -its interpretation and validity, applies to the capacity of parties, including that of married women, to bind themselves in the manner attempted. Story, Conflict of Laws, § § 103, 241; Milliken v. Pratt, 125 Mass. 374.
We may well say, in passing, that, while contracts which,, though valid in the place thereof, are not enforceable in the-country where enforcement is attempted for reasons above; suggested, are often spoken of in text-book and other authorities, as exceptions to the rule that the validity of a contract is *120referable to the place which the parties thereto at the time of making intended should he incorporated into it, they are not exceptions strictly so called. The rule in a technical sense is without exception. In practical effect, the rule of the forum supersedes it leaving the contract without remedy there to enforce it and, in that sense, void.
The last rule that need he stated is this: A contract under the foregoing is not, necessarily, contrary to the public policy of a state, merely because it could not validly have been made there, nor is it one to which comity will not be extended, merely because the mating of such contracts in the place of the forum is prohibited, general statements to the contrary notwithstanding'. In Milliken v. Pratt, supra, the court remarked substantially, even a contract expressly prohibited by the statutes of the state in which the suit is brought, if not in itself immoral (the term “immoral” being used in the broadest' sense), is not, necessarily, nor usually, deemed so invalid that the comity of the state, as administered by its courts, will refuse to entertain an action under all circumstances to enforce it. There must be something inherently bad about it, something shocking to one’s sense of what is right as measured by moral standards, in the judgment of the courts, something pernicious and injurious to the public welfare. In Ureenhood on Public Policy at page 46, cited by counsel, the following rule is deduced from the authorities cited:
“When a contract is valid under the public policy of the state where made, it will be enforced in another state, although the same would by the statute laws of the latter state be void, unless its enforcement would exhibit to the citizens of the state an example pernicious and detestable.”
It will occur to one, on a moment’s reflection, that the last foregoing rule could not be otherwise, else the doctrine that a contract valid at the place where made is valid and, generally speaking, enforceable everywhere, would be wholly nullified as to foreign contracts which would not be valid if made in *121the place enforcement is sought. The rule would be useless since, in every case of such a contract, it would never be enforceable except in the place where made. The correctness of the rule and the absurdity of the idea that every contract which, if made in the jurisdiction of the forum, would not be valid, cannot be enforced there, are so dear that we would hardly be justified in dealing with the numerous elementary principles, as above, leading up to the final solution of the proposition upon which this appeal must be grounded, were it not for the obvious fact that the case was decided below and the judgment is sought to be sustained here upon the theory, merely, that because such a contract as that in question would not be valid if made here, it necessarily cannot be enforced in our courts, though it is perfectly valid where it was in fact made, the court below and counsel supposing that the general principle stated in Fox v. Postal T. C. Co. 138 Wis. 648, 120 N. W. 399, necessarily applies to such a contract as the one in hand. There the contract was of the class regarded as pernicious in character and was one which, by the settled judicial policy of this state, is not enforceable in its courts.
Many illustrations might be given of instances of contracts made elsewhere, which would not have been valid if made in the state where judicial enforcement was attempted, including instances where the invalidity was referable to statutory prohibitions, being afforded by judicial remedies in the latter jurisdiction. Such as contracts providing for a rate of interest which would be usurious with' penalizing consequences, even to the extent of forfeiture of principal and interest as to such a contract, if made in the law of the forum. Fisher v. Otis, 3 Pin. 78; Richards v. Globe Bank, 12 Wis. 692; Newman v. Kershaw, 10 Wis. 333; Vliet v. Camp, 13 Wis. 198; Lyon v. Ewings, 17 Wis. 61; Maynard v. Hall, 92 Wis. 565, 66 N. W. 715; Miller v. Tiffany, 1 Wall. 298, 310. Also a contract allowable by the statute of frauds where made held enforceable in another country where such a contract would be *122void by the writteñ law. Scudder v. Union Nat. Bank, 91 U. S. 406. The same is true of Sunday contracts. Brown v. Gates, 120 Wis. 349, 97 N. W. 221, 98 N. W. 205, 349; Hanunon, Contracts, § 260, and cases cited. The illustrations could be extended to many subjects, and contracts which would, if made here, not be enforceable because extinguished by the statute of limitations of our state. The situations indicated in the foregoing are entirely different from that in Fox v. Postal T. C. Co., supra; Wight v. Rindskopf, 43 Wis. 344, and Bartlett v. Collins, 109 Wis. 477, 85 N. W. 703. The dividing line, it will be seen, is at the point where inherent harmfulness commences. The latter cases are on the fatal side while the former are on the other.
From the foregoing it will be readily appreciated how a conflict between the judicial holdings of different countries might, as it has, create confusion respecting the proposition under consideration. There is opportunity for courts to be, as they seemingly have been in some instances, misled by looking only to the rule that a contract valid where made, which if made in the place of the forum would be contrary to law and,so not enforceable, is likewise remediless, not regarding that the rule is a mere exception, and quite a narrow one at that, to the broader rule covering contracts in general, but still greater opportunity for courts to take conflicting position by reason of each being, to a very large extent, supreme in its oto jurisdiction as to what elements render a contract inherently harmful and so to what extent, by rules of comity, the foreign law should be given effect.
The opportunities for conflict referred to have operated efficiently as to the proposition under discussion, as illustrated by cases holding that, in the circumstances here, the married woman’s contract cannot be enforced (Armstrong, Cator & Co. v. Best, 112 N. C. 59, 17 S. E. 14; Thompson v. Taylor, 65 N. J. Law, 107, 46 Atl. 567; Hayden v. Stone, 13 R. I. 106), while the great weight of authority is to the contrary *123upon the ground that such a contract is not against the policy of the law in the sense that the term is used in testing whether' the foreign law of a contract as to its validity can be enforced. On this very many citations might be given. The following are but a very few of them: Milliken, v. Pratt, 125 Mass. 374; Ross v. Ross, 129 Mass. 243, 246; Garrigue v. Kellar, 164 Ind. 676, 74 N. E. 523; Baer Bros. v. Terry, 108 La. 597, 32 South. 353; Young v. Hart, 101 Va. 480, 44 S. E. 703; Baum v. Birchall, 150 Pa. St. 164, 24 Atl. 620; Young’s Trustee v. Bullen, 19 Ky. Law Rep. 1561, 43 S. W. 687; Gibson v. Sublett, 82 Ky. 596; Robinson v. Queen, 87 Tenn. 445, 11 S. W. 38; Bell v. Packard, 69 Me. 105; Bowles v. Field, 78 Fed. 742; First Nat. Bank v. Mitchell, 92 Fed. 565.
The industry of counsel resulted in bringing to our attention three judicial authorities to support the negative of the proposition under consideration which seem to be sufficiently in point to warrant noticing them. Counsel cite other cases: First Nat. Bank v. Shaw, 109 Tenn. 237, 70 S. W. 807; Ruhe v. Buck, 124 Mo. 178, 27 S. W. 412; Dulin v. McCaw, 39 W. Va. 721, 20 S. E. 681; Bank of Louisiana v. Williams, 46 Miss. 618; Studebaker Bros. Co. v. Mau, 13 Wyo. 358, 80 Pac. 151, and the like. They either in principle support Milliken v. Pratt, supra, and the numerous oases we have cited, or go upon the ground that in the particular instance merely the manner of enforcement of the contract was involved, which is governed by the law of the forum, or the contract, though made in the foreign state, related to real property in the state of the forum; was not a mere personal contract enforceable in personam, but one enforceable in rem and by an action in the nature of one in rem. All these distinctions must be kept in mind. Failure to do so has led some courts sometimes into awkward positions and at others worked great prejudice to parties.
The three cases cited by counsel to which we accord some' significance, after careful research we are unable to add to,. *124from other jurisdictions, though there may be some. Such few are entitled to very little weight.
Armstrong, Cator & Co. v. Best, 112 N. C. 59, 17 S. E. 14, went upon the obviously erroneous theory that the law of the forum, as to the capacity of parties to contract, governs. That ¡ was stated without citation, of authority, and it seems none of [^moment could have been cited. In a later case, Hanover Nat. Bank v. Howell, 118 N. C. 271, 23 S. E. 1005, the court made an effort to place its doctrine on a more logical ground. After all the court seems to' have doubted the soundness of its position and rather invited legislative assistance for the purpose of avoiding it.
In Hayden v. Stone, 13 R. I. 106, the court approved the .general principle that the validity of a contract is referable to the law of the place where made, but leaned to the idea that it does not extend to the capacity to contract, and concluded in any event that the question in the particular instance really considered the remedy, and, as there was none afforded in that state to its own citizens to enforce a married woman’s mere promissory note, none could be afforded to a citizen of another state. The infirmity of the logic, when tested by elementary principles, is apparent at once, except so far as it was competent for the Rhode Island court, in the absence of any restraint in the written law, to establish the doctrine- announced as the public policy of that state, if it saw fit.
In Brown v. Browning, 15 R. I. 422, 7 Atl. 403, the court seems to have endeavored to very much limit its former decision, suggesting, in effect, that it did not go upon the validity of the contract which was governed by the Massachusetts law where it was made, but to the particular remedy by attachment sought to be used.
Thompson v. Taylor, 65 N. J. Law, 107, 46 Atl. 567, dealt with a married woman’s agreement to be bound as an accommodation maker, as in this case, in face of an express prohibitory statute forbidding such agreements. The court ree-*125ognized the general rule declared in the leading case of Milliken v. Pratt, 125 Mass. 374, but concluded that the legislature having condemned such contracts as harmful, that established a public policy for the state precluding its courts from being-used on grounds of comity to enforce such a contract, regardless of its being valid by the foreign law.
Little more need be said to reach a logical conclusion respecting the proposition before us. The contract, as to respondent, is valid, as conceded, by the law of the place where-it was made. Therefore, it is valid here. Being so valid, appellant is entitled, as matter of right, by the universal comity by which the law of one country as to contracts in general, is recognized and enforced in the jurisdiction of the forum of another, if they are valid in the foreign jurisdiction, unless they fall within some exception in that regard. They do not,, as has been seen, in that such contracts are condemned as pernicious and forbidden by our written law, as in New Jersey. They are not contrary to any public policy of this state heretofore, in the code of unwritten law, established by our court. If there is any ground for saying they are inherently harmful, it is referable, solely, to the ancient common-law rule of disability, the reason whereof reaching to the present, is but little more than a shadow, a rule which, in great part, was changed by legislation long ago. That such contracts are not to be regarded as inherently harmful, is evidenced by the fact that they are permitted by the written law of a large portion of the states and in most others legislation in that direction is progressive. It is further evidenced by the fact that they are recognized as not inherently bad by substantially all the courts of this country. The exceptions are not significant. This court, except as restrained by principle and the great weight of authority, is free to take its own stand, to declare for this state what shall be, in the particular situation, its public policy, till the source for written law shall have acted in the matter. The court cannot say that such contracts are against *126public policy merely because they have not the sanction of the ■common law as we have seen. The position of the court in Fox v. Postal T. C. Co. 138 Wis. 618, 120 N. W. 399, or any other court in a similar situation, has nothing to do with the case, unless tire contract can be classified with contracts dealt with in such situations. How can the court say that it should be so classed, that it should be located within the broadest possible boundaries of the immoral, the inherently bad? Nearly all the common-law disabilities of women to contract have been removed. They can acquire and enjoy property and make all contracts necessary or convenient in that regard. They can, in equity, charge their property substantially at will. There is little left of a business nature which men can do that they cannot do. They have nearly all the rights of men, and some besides, and on all sides are mating pressing claims with distinguished support for what is yet withheld not very firmly nor perhaps very logically. How can the ordinary business contract in question, so common among men of ordinary perceptions, be said to be contrary to any policy of this state heretofore, or which should now be, adjudged bad in tire interest of good morals ? We can give no answer toj that consistent with respondent’s position. It is considered there is none, and that the proposition under consideration must be answered in the affirmative. The decision appealed from is erroneous. The contract of respondent must be held as valid and enforceable here as in the place where it was made.
By the Qourt. — The judgment in respondent’s favor is re-wersed, and the cause remanded with directions to amend the judgment against the codefendant so as to be against him and respondent as well.