Summary
In Beadall v. Moore (199 A.D. 531) the Appellate Division in this Department held that the place of performance of a bill of exchange or a promissory note is the place of payment, and that the general rule is that a bill or note executed in one State or country and payable in another is governed as to its nature, validity, interpretation and effect by the laws of the State where it is payable without regard to the law of the place where it is written, signed or dated.
Summary of this case from Swift Company, v. Chemical Bank Trust Co.Opinion
January 13, 1922.
Choate, Larocque Mitchell [ Clarence V.S. Mitchell of counsel; Robert M. Johnson with him on the brief], for the appellants.
William P. McCool of counsel [ Richard Campbell with him on the brief], for the respondent.
The complaint alleges two causes of action. The answer was interposed only to the first cause of action. Both parties moved for judgment on the pleadings. The court denied the defendant's motion and granted plaintiffs' motion for judgment upon the second cause of action, but denied plaintiffs' motion upon the first cause of action.
The first cause of action is to recover upon two written instruments as follows:
"LONDON, Nov. 16, 1919. "GEORGE G. MOORE:
"Pay A. Marx Co. or order Nine hundred and fifteen pounds (£ 915). GEORGE G. MOORE."
"LONDON, Nov. 16, 1919. "GEORGE G. MOORE, "52 Vanderbilt Avenue, "New York:
"Pay A. Marx Co. or order One thousand and eighty-seven pounds, 10 shillings (£ 1087-10).
"GEORGE G. MOORE."
The plaintiffs allege these to be negotiable promissory notes. They have the right to elect to treat them as such (Neg. Inst. Law, § 214.)
The defendant pleads as a defense that at the time these instruments were executed the laws of England provided that all promissory notes should be void in their inception unless prior to their execution and delivery the maker thereof paid the tax imposed thereon and affixed to said note a stamp evidencing payment; that no tax was paid upon said instruments as required by the law, and no stamp evidencing the payment of such tax was ever affixed thereto, and, therefore, the instruments were void from the beginning and never became promissory notes, and the defendant was not liable thereon.
In so far as this defense sets forth the revenue law of England, it will be disregarded, as the courts of this State will not enforce the revenue laws of a foreign State or country. ( Ludlow v. Van Rensselaer, 1 Johns. 94; State of Colorado v. Harbeck, 232 N.Y. 71.)
The rule is, however, that negotiable instruments are governed by the law relating to contracts, and it is the settled law that the validity of a contract is to be determined by the law of the place where it is made or to be performed. The instruments were made and delivered in London, England, and if void by the law of that country would be void everywhere, with the exception noted as to the law of the place of performance, which will be considered later.
There is a distinction between those laws which render an instrument void for lack of a stamp, and those which provide that the unstamped instrument shall not be enforcible. The latter relates to the remedy; and the law of the forum will be applied. In such case it makes no difference that the instrument may not be enforced in the country where made; if not obnoxious to our laws it may be enforced in the courts of this State. Such was the case of Ludlow v. Van Rensselaer ( supra). Furthermore, it does not follow, because these instruments may be treated either as accepted bills of exchange or negotiable promissory notes by the laws of this State, that they are instruments subject to the English statute requiring a stamp to be affixed to render them valid.
Where no place of performance is mentioned in the note or contract, it is presumed that it is to be performed in the State or country where dated. This presumption would yield to proof to the contrary, and as the first instrument is silent on this subject, the real agreement of the parties could be shown by parol proof, as it would not tend to alter or vary the terms of the writing.
The place of performance of a bill of exchange or a promissory note is the place of payment. When a bill or note is executed in one State or country and payable in another, the general rule is that it is governed as to its nature, validity, interpretation and effect by the laws of the State where made payable, without regard to the place where it is written, signed or dated, it being presumed that the parties contracted with reference to the laws of that place (8 C.J. 92), especially where the note would be void in the place where made and valid where it was payable. The parties would be presumed to have intended to make a valid and enforcible instrument instead of one that was void.
The second of the instruments is drawn upon the maker at an address in the city of New York. This designates the place where it is payable. Recovery may be had on that instrument in our courts irrespective of the laws of England; and, as we have intimated above, recovery may be had on the other if it was the understanding of the parties that it also was to be payable in New York city.
This defense cannot be disposed of as a question of law.
The order will be affirmed, with ten dollars costs and disbursements to the respondents.
CLARKE, P.J., DOWLING, SMITH and GREENBAUM, JJ., concur.
Order affirmed, with ten dollars costs and disbursements.