[633] it is delivered and put in force.' Where a note is expressly made payable at a designated place, its legal effect in this particular cannot be changed by parol evidence. But if it is payable generally, extrinsic evidence may be resorted to to show that it was intended to be paid at a particular place, and thereby subject it to the law of that place. In such case interest will be allowed at the rate established by the law in force there. A debt was payable in Great Britain, and the creditor agreed with the debtor, for the latter's accommodation, that it might be paid in one of the states in this country; and it was held that the interest accruing upon it thereafter should be computed according to the rate in that state. If no place of payment or rate of interest is specified, and there is no proof of the intention of the parties as to the former, the instrument is payable anywhere and the rate of interest is determinable by the law of the jurisdiction in which suit is brought upon it.5 § 358. Rule as to notes and bills. Bills of exchange and promissory notes illustrate these principles in respect to the lex loci contractus. The maker of a note and the acceptor of a bill are bound to pay the money therein mentioned at the places severally specified for payment. To those places they have given express assent. They are the parties primarily bound, and the agreements appearing by the face of the paper are respectively theirs. The place of making the note or accepting the bill is that where the contract is made, and where, but for the appointment of another place for payment, they would be bound to perform it. As the place of performance, when expressly fixed, is the place of contract within the sense of the lex loci, these parties are held to pay the bill or note according to its interpretation and force by the law of that place. Bills of exchange are usually addressed to a drawee at a particular place; the place so mentioned is that at which the 1 Hyde v. Goodnow, 3 N. Y. 266; 2 Thompson v. Ketcham, 8 Johns. Cook v. Litchfield, 5 Sandf. 330; 189; Frazier v. Warfield, 9 Sm. & M Davis v. Coleman, 7 Ired. 424; Fant 220. v. Miller, 17 Gratt. 47; Cook v. Moffat, 5 How. (U. S.) 295; Whiston v. Stodder, 8 Mart. (La.) 95; Snaith v. Mingay, 1 W. & S. 87; Lenwig v. Ralston, 1 Pa. St. 139. 3 Austin v. Imus, 23 Vt. 286. See Senter v. Bowman, 5 Heisk. 14. 4 Pearce v. Wallace, 1 Har. & J. 48. 5 Kopelke v. Kopelke, 112 Ind. 435. 6 See ante, § 357. drawer agrees that his bill shall be honored; and, when accepted, it is the place where the acceptor agrees to pay it unless the bill specifies another place of payment; the [634] place of payment is the place of contract, and the laws there in force govern it.' The drawer of a bill and the indorser of a note or bill contract by the act of drawing and indorsing. Their contracts are implied. The undertaking of the former is that the drawee will accept the bill and pay the amount of it where, according to its face, it is payable; and that if the bill is dishonored and due notice of the dishonor is given him, he will himself pay the amount to the holder. His agreement, so implied, is not to pay at the place mentioned in the bill; but at the place where he draws it, and where, consequently, he is legally bound to perform, no other place of performance being implied or specified. The act of drawing is interpreted [635] 1 Todd v. Bank, 3 Bush, 626. 2 Story on Prom. Notes, § 339, note; Story on Bills, § 154. Rothschild v. Currie, 1 Q. B. 43, proceeded upon the opposite theory, that the law of the place of payment governed as to all the parties. It was the case of a bill drawn in England on, and accepted by, a house in France, payable at Paris, in favor of a payee domiciled in England, by whom it was indorsed there to an indorsee who was also domiciled there. The bill was dishonored at maturity, and due notice was given to the payee according to the law of France; but not, as it was suggested, according to the law of England. And it was held, in a suit brought by the indorsee against the payee, that the notice was good, being according to the law of France, the lex loci contractus of acceptance. In a note to § 339 of Story on Prom. Notes this decision is criticised by the author: "With the greatest deference for that learned judge (who delivered the opinion), it seems to me that the decision of the court is not sustained by the reasonVOL I-48 ing on which it purports to be founded. The court there admit that the notification of the dishonor is parcel of the contract of the indorser; and, if so, then it must be governed by the law of the place where the indorsement was made, upon the very rules cited by the court from Pothier. The error (if it be such) seems to have arisen from confounding the contract of the acceptor with the contract of the drawer and the indorser." In a preceding part of the same note the learned author says: "The acceptor agrees to pay in the place of acceptance, or the place fixed for the payment (Cooper v. Waldegrave, 2 Beav. 282); but upon his default, the drawer and the indorser do not agree, upon due protest and notice, to pay the like amount in the same place; but agree to pay the like amount in the place where the bill was drawn or indorsed by them respectively. Hence it is that the notice to be given to each of them must and ought to be notice according to the law of the place where he draws or indorses by the law of the place where it is drawn. Its validity and effect are determined by that law; and the money due there, by reason of the violation of the drawer's undertaking that the drawee should accept and pay according to the tenor of the bill, is the amount specified in it, together with interest, after his own default, if not fixed by the bill at the rate [636] allowed by the law of the place of drawing. The dam the bill, as a part of the obligations thereof. The drawer and indorser, in effect, contract in the place where the bill is drawn or indorsed a conditional obligation; that is, if the bill is dishonored, and due notice is given to them of the dishonor according to the law of the place of their contract, they will respectively pay the amount of the bill at that place. The law of the place of the acceptance or payment of the bill has nothing to do with their contract; for it is not made there, and has no reference to it." See Shanklin v. Cooper, 8 Blackf. 41, overruled in Hunt v. Standart, 15 Ind. 33. I Cooper v. Waldegrave, 2 Beav. 282; Ayrman v. Sheldon, 12 Wend. 439; Everett v. Vendryes, 19 N. Y 436; Yeatman v. Cullen, 5 Black f. 240; Slacum v. Pomery, 6 Cranch, 221; Powers v. Lynch, 3 Mass. 77; Williams v. Wade, 1 Met. 82; Trimbey v. Vignier, 1 Bing. N. C. 151; Potter v. Brown, 5 East, 124; Hicks v. Brown, 12 Johns. 142; Hunt v. Standart, 15 Ind. 33; Van Raugh v. Van Arsdaln, 3 Cai. 154; Burrows v. Hannegan, 1 McLean, 315. 2 Bailey v. Heald, 17 Tex. 102; Bank of U. S. v. United States, 2 How. 711; Raymond v. Holmes, 11 Tex. 54; Crawford v. Branch Bank, 6 Ala. 12. In Gibbs v. Fremont, 9 Exch. 25, the action was by the indorsers of several bills of exchange drawn by the defendant in California, on James Buchanan, at Washington, D. C. The bills were made payable to F Hattmann, and discounted by hin at the place where they were drawn; they were dishonored, and the question was whether the plaintiff was entitled to recover against the defendant six per cent., the rate in Washington, where they were payable, or twenty-five per cent., the rate of interest in California, where they were drawn. The court of exchequer in England gave the plaintiff interest according to the rate in California. In Hunt v. Standart, 15 Ind. 33, a note made and indorsed in Indiana was payable in New York. The indorsement was sufficient according to the law of New York, but it was not sufficient under the law of Indiana. The question was by what law the sufficiency of the indorsement was to be tested. It was held that the indorsement was governed by the law of Indiana, where it was made. The following cases involved a similar question and were decided in the same way: Ayrman v. Sheldon, 12 Wend. 439; Everett v. Vendryes, 19 N. Y. 436; Yeatman v. Cullen, 5 Blackf. 240; Williams v. Wade, 1 Met. 82; Trimbey v. Vignier, 1 Bing. N. C. 151; Burrows v. Hannegan, 1 McLean, 315; Holbrook v. Vibbard, 3 Ill. 465; Currie v. Lockwood, 40 Conn. 349; Lowry's Adm'r v. Western Bank, 7 Ala. 120. See Trabue v. Short, 5 Cold. 293; Short v Trabue, 4 Met. (Ky.) 299; Artisans' Bank v. Park Bank, 41 Barb. 599; Trabue v. Short, 18 La. Anr. 257; ages are to be ascertained by the same law,' for not having the money for the holder at the place where, according to the bill, it should have been paid. The contract implied from indorsement is in legal effect the same as that implied from drawing a bill; the language of an indorsement expressed in full is a bill of exchange. It is a new and substantive contract; and the obligations of the parties are to be determined according to the law of the country in which it is made. This seems now to be the doctrine of both the English and American courts; but it has not been established without dissent.5 3 The contract of the drawer or indorser in relation to the payment is twofold: that the acceptor or maker will pay according to the tenor of the paper the amount therein mentioned, at the specified time and place; and that in case the parties primarily bound fail to make such payment, then, upon due notice of such default, the drawer or indorser will pay that amount. The measure of their liability rests upon the theory that they should pay a sum which will be a full compensation to the holder for the acceptor's and maker's default, consisting of damages for being obliged to receive the money at a different place, and interest during the delay of payment. The interest that the primary parties are chargeable with is the rate of the country or state where the paper was payable. They are liable to that rate because the contract was to be there performed. Although these secondary parties did not agree to pay at the same place, they agreed to pay the same debt; that is, the face of the paper. Now, if the interest which the primary parties are liable for Allen v. Kemble, 6 Moore P. C. 314; Allen v. Merchants' Bank, 22 Wend. 215. 1 Slacum v. Pomery, 6 Cranch, 221. 2 Bayley on Bills, ch. 5, § 3; Story on Bills, § 108; Ayrman v. Sheldon, 12 Wend. 439; Ballingallis v. Gloster, 3 East, 482; Heylyn v. Adamson, 2 Burr. 674; Ogden v. Saunders, 12 Wheat. 213, 341. 3 Slacum v. Pomery, 6 Cranch, 221; Edw. on Bills, 263; Everett v. Vendryes, 19 N. Y. 436. 4 Ibid.; McClintock v. Cummins, 3 McLean, 158; Mix v. State Bank, 13 Ind. 521; Butters v. Olds, 11 Iowa, 1. 5 Shanklin v. Cooper, 8 Blackf. 41; Mullen v. Morris, 5 Pa. St. 87; Hanrick v. Andrews, 9 Port. 10; Peck v. Mayo, 14 Vt. 33; Rothschild v. Currie, 1 Q. B. 43; Phillips v. Im Thurn, L. R. 1 C. P. 463; Able v. McMurray, 10 Tex. 350. [637] is an incident to that debt, and follows it as the shadow follows the substance, why should not the subsidiary obliga tion in respect to the amount be the same as the primary? But the cases appear to proceed upon the principle that on the default of the primary parties, the immediate requisite steps being taken to render the conditional liability of the drawer and indorser absolute, the amount specified in the bill or note becomes their debt; that they are not responsible for the continued default of the principals; nor therefore liable for the interest chargeable to them; but only for their own default in not paying the sum which becomes their absolute debt, in pursuance of their contract as drawer or indorser. And their agreement is to pay at the place where their contract was made. They are liable on account of their own default to pay interest according to the law of that place. Their default for which interest is computed against them dates from receiving notice of the dishonor of the bill or note.' $359. Bonds to the United States. An apparent excep tion exists in the case of official bonds executed to the federal government. It sometimes happens that they are executed by the principals in one state and the sureties in another or in different states. The rights and duties of sureties are known to be dissimilar in the several states. It has been decided, however, that such bonds must be treated as made and delivered and to be performed by all the parties at the seat of government, upon the ground that the principal is bound to account there; and therefore, by necessary implication, all the other parties look to that as the place of performance, by the law of which they are to be governed.? § 360. Between parties in different states. Where parties meet together, and face to face make contracts, the place of making is fixed with certainty; and also the place of perform[638] ance where no other is designated. But all obligations to 1 Walker v. Barnes, 5 Taunt. 540. It was held in this case that the drawer of a bill which is dishonored by the acceptor is not liable to pay interest for the time which elapses between the day when the bill be comes due and the day when the drawer receives notice of the dishonor. 2 Story Conf. L., § 290; Cox v. United States, 6 Pet. 172, 202; Duncan v. United States, 7 Pet. 435. |