Court Opinion

ID: 6883678
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:22:29.888507+00
Date Added: 2024-06-11T16:05:38.531238
License: Public Domain

MAGRUDER, Circuit Judge
(dissenting)-
I am constrained to dissent from the opinion of the court.
The note in question purports to have been made in New Hampshire. Where it was delivered does not appear, but by its terms it was payable in Massachusetts. Under the New Hampshire rule of the conflict of laws, the validity of the note as a contractual obligation of the defendants is governed by the law of Massachusetts, the place of performance. New York Life Insurance Co. v. McKellar, 1895, 68 N.H. 326, 330, 44 A. 516. Therefore, the federal district court sitting in New Hampshire, applying the New Hampshire rule of conflicts, as it should (Klaxon Co. v. Stentor Elec. Mfg. Co., Inc., 1941, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477; Sampson v. Channell, 1 Cir., 110 F.2d 754, 759, 762, 128 A.L.R. 394), will look to the Massachusetts law to determine the liability of the defendants on the note.
The opinion of the court cites four Massachusetts cases for the proposition that an ultra vires contract is void, no action thereon being maintainable. Morville v. American Tract Society, 1877, 123 Mass. 129, 25 Am.Rep. 40; Davis v. Old Colony Railroad Co., 1881, 131 Mass. 258, 41 Am.Rep. 221; Nowell v. Equitable Trust Co., 1924, 249 Mass. 585, 144 N.E. 749; National Shawmut Bank v. Citizens’ Nat. Bank, 1934, 287 Mass. 329, 191 N.E. 647. These are all cases of suits against the corporation on an ultra vires promise. It does not necessarily follow that ultra vires may be invoked as a defense when the corporation is suing the other party to a bilateral contract ; the Massachusetts law on this is not entirely clear. See Davis v. Old Colony Railroad Co., 1881, 131 Mass. 258, 273, 274, 41 Am.Rep. 221; Slater Woollen Co. v. Lamb, 1887, 143 Mass. 420, 9 N.E. 823; Nowell v. Equitable Trust Co., 1924, 249 Mass. 585, 601, 144 N.E. 749; McLean Co. v. Sidebottom, 1931, 277 Mass. 158, 160, 178 N.E. 284. It is at least understandable to argue that if the ultra vires promise of the corporation is void, it is not good consideration to support a counterpromise by the oth*479er party. However that may be, the present is not a suit on a bilateral contract. It is a suit on the unilateral promise of the defendants contained in the note. Even though an ultra vires promise of the corporation may not be good consideration for a counterpromise, I do not see why the corporation’s act of handing over the money should not be regarded as good and sufficient consideration to support the defendants’ unilateral promise, and I find no decisions in Massachusetts holding the contrary on facts like the present. Mindful of our duty under Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, I still think we are free to hold that under the Massachusetts law the defense of ultra vires is not available to the defendants in a suit against them on the note. This kind of defense is not so fashionable as it once was, and we ought not to be astute to extend it beyond the clear holding of the Massachusetts cases.
Ultra vires aside, there seems to be no other defense to liability on the note. As I understand the Massachusetts law, an executor or trustee who signs a negotiable instrument in form like the one before us binds himself individually, notwithstanding § 20 of the Uniform Negotiable Instruments Law, and whether or not the obligation was properly incurred by him in the administration of the estate. See the discussion in Hamlen v. Welch, 1 Cir., 1940, 116 F.2d 413, 417, 418. The question whether the obligation was properly incurred is important only in determining whether the executor is entitled to reimbursement from the estate.