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State, the laws of such State regulating interest on judgments are in that respect the law of the United States courts, if no particular interest be contracted for.1

Defenses. To an action on a note which is both made and payable in one and the same State, the same defense (provided it is not statutory) is allowable, when sued in another State, that might have been made to it if sued in a court of the State where made.2

Thus, where a note is made and is payable in a State where by law defenses of payments, want of consideration, discounts, and sets-off accruing prior to notice of endorsement, and all of which affect the substance of the contract, are allowed, then the same. defenses may be relied on under similar circumstances in a suit in the court of a different State, but matters of defense which are merely local, which go to the form of the contract and are not a part of it, procedure, parties and time, being legal as well as equitable, defenses are governed by the lex fori.4

3

Foreign Bills of Exchange Subject to Jurisdiction of United States Courts. The provision of the act of Congress of 1789, which declares that no district or circuit court shall have "cognizance of any suit for the recovery of the contents of any promissory note or other chose in action in favor of an assignee, unless a suit might have been prosecuted in such court to recover said contents, if no assignment had been made, except in case of foreign bills of exchange," does not in its restrictive or inhibitory features apply to the endorsees or assignees of bills of exchange drawn in one State upon a person in another, and made payable in such latter State. Such bills of exchange partake of the character of foreign bills, and are to be so treated; for although the States and citizens thereof are one, as for all national purposes embraced in the Federal Constitution, and are united under the same sovereign authority, and are governed by the same laws, yet in all other respects the States are foreign to and independent of each other. Upon the principle, then, that such instruments

1 Sneed v. Wister, 8 Wheat. 690. Brabston v. Gibson, 9 How. 263; Story's Conf. of Laws, § 330 et seq. 3 Ibid.

Daniels on Neg. Instruments, § 890; Davis v. Morton, 5 Bush, 160;

Jones v. Jones, 18 Ala. 248; Ruggles v. Keeler, 3 John. 261.

Sheldon v. Sill, 8 How. 441. Buckner v. Finley, 2 Pet. 586. Warder v. Arell, 2 Wash. (Va.) 298; Buckner v. Finley, 2 Pet. 586.

are foreign bills, it results that although a bill be drawn in favor of a citizen of the same State with the drawer, but on a citizen of another State, so that suit would not lie in favor of the payee in the United States circuit court, yet the endorsee or assignee thereof, who is a citizen of a different State than that of the drawer, may sue the drawer thereon in the Federal courts.1

But if at the time of making the note or other negotiable instrument for payment of money, (except foreign bills of exchange,) the maker and payee were both citizens of the same State, so that a suit would not lie thereon in the United States court, then no action will lie on such instrument in said court in favor of an assignee or endorsee thereof, unless at the time of making the assignment or endorsement by the payee, he had become, and then was in good faith a resident and citizen of a different State than the one of which the parties were citizens at the time of the making of the contract. But if the payee, before parting with the instrument has become qualified to sue in the Federal court, then his assignee, if qualified in point of citizenship, may sue, for the assignee of negotiable paper may maintain suit thereon in the United States circuit court, against a citizen of another State than that whereof such assignee is a citizen, notwithstanding that at the time of making the note the parties thereto were both citizens of the same State, if the payee and assignee thereof was a citizen of a different State from that of the maker at the time of assigning the note, so that an action in said court might at that time have been maintained by himself against the maker. For if such payee becomes in good faith a citizen of another State after the making of the note and before parting with the same, then the capacity to sue in the United States district court inures to him, by virtue of such citizenship, and by an assignment of the note to a citizen of a different State from that of the debtor, the same right of action passes to the assignee. Such a case is not within the exception in the act of Congress in regard to jurisdiction of suits by assignees of promissory notes.3

1 Buckner v. Finley, 2 Pet. 586. * Gibson v. Chew, 16 Pet. 315.

* Kirkman o. Hamilton, 6 Pet. 20.

X. MORTGAGE LIEN.

Follows the property in other States. A chattel mortgage of property duly executed and recorded in one State, so as to confer right of possession of the property in the mortgagee, is equally good and binding in every other State in which the property may come. The lex loci contractus governs the validity, nature and force of such a contract, and the right of possession or lien conferred thereby upon the mortgagee follows the property not only everywhere within, but also everywhere without the particular sovereignty or State wherein the contract is made and the property is at the time; and these rights will be enforced, in the judicial forum, in such other jurisdictions or States, to the same extent and obligation as in the State where the transaction arises, and that a purchase may have intervened from one seemingly the owner does not alter the case.1

Right of possession enforced. When, by the terms of such mortgage, the right has accrued to the mortgagee of actual possion of the property, that right may be enforced by an action of replevin or other proper action for obtaining possession, in whatever State the mortgaged property may then be; and it is no answer thereto that no evidence or notice existed of record, or was otherwise given, to charge a purchaser therein with notice of the mortgage. But the court say, in the case above cited, in answer to such an objection, and the liability of buyers to be imposed upon, that "this may be so, but the same argument would be just as true and forcible if the instrument were of record in some distant county of this State."3

A mortgage of a vessel regularly made and recorded under the laws of the United States, in the office of the proper collector, although possession be not given to the mortgagee, is not affected as to its validity by any State law in reference to the filing or recording mortgages of personal property made or taken under the

Smith . McLean, 24 Iowa, 322; Arnold v. Potter, 22 Iowa, 198; Savary v. Savary, 3 Iowa, 272; Bank of U. S. v. Donnally, 8 Pet. 361; Davis v. Bronson, 6 Iowa, 410, 424; Jones v. Taylor, 30 Vt. 42; Offutt v. Flagg, 10 N. H. 50; Ferguson v. Clifford, 37 N. H. 87;

Blystone v. Burgett, 10 Ind. 28; Barker v. Stacy, 25 Miss. 477; Ryan 0. Clanton, 3 Strob. 412, 471; Herman on Chattel Mortgages, $$ 79, 80.

2 Smith . McLean, 24 Iowa, 322, 330, 331. 3 Ibid.

laws of the State. The congressional acts on the subject of recording and effect thereof are no exclusion of State legislation on the same subject.1

Mortgage in one State; property in another State. But the lien of a mortgage made in one State by a person resident and citizen thereof, on personal property.situated at the time in another State, in which latter State the law requires the recording of such instruments, or else that possession be given before levy of attachments or executions thereon as essential to priority, is overcome by the priority of an attachment levy of the same property in a proceeding in rem against it made before the recording of such mortgage, before delivery of possession of the property in pursuance thereof. Though it is true that the validity of a contract is governed, as a general principle, by the law where made, yet it is not so if such conclusion conflict with the rights of others, where the property is situated, or with the laws of the State of its actual situs.3 Therefore, a mortgage made in New York on personal property situated at the time in Illinois, is postponed in favor of an attachment levy of the same property in a proceeding in rem, and by a subsequent condemnation thereof in sale in such proceeding. The title of the purchaser relates back to the date of the attachment levy, and takes precedence of transfers or liens unrecorded at that time, and without change of pos session of the property in the debtor. Though, for some purposes, a fiction of law prevails that personal property attends the owner, and that transfers of it by him, valid at his domicile, and there made, are valid in such other State as the property may at the time be situated in. But this is only as against the vendor, or volunteers, and not as against intervening bona fide claims arising under the law of the actual situs. To these, this fiction gives place or yields. It is only by comity that such contracts made in one State, when valid there, are enforcible at all in another State; therefore, when their enforcement conflicts with rights acquired

1 Aldrich v. Etna Company, 8 Wall. 491.

2 Green v. Van Buskirk, 7 Wall. 139; Milne v. Morton, 6 Binn. 361; Taylor e. Boardman, 25 Vt. 581; Emerson v. Patridge, 27 Vt. 8; Ward v. Morrison, 25 Vt. 593; Norris v. Mumford, 4 Martin, 20; Lanfear v. Sumner, 17 Mass.

100; Green v. Van Buskirk, 5 Wall. 307; Guillander v. Howell, 35 N. Y. 657.

3 Green v. Van Buskirk, 7 Wall. 139; Guillander v. Howell, 35 N. Y. 657. 4 Green v. Van Buskirk, 7 Wall. 139; Golden v. Cockrill, 1 Kansas, 259.

under the latter's own law that comity ceases to exist in the particular case. 1

Foreign mortgage of land to prefer creditors. Assignments. A mortgage to secure a bona fide debt, duly executed and recorded in Iowa, upon lands in that State, and made by a non-resident debtor, in view of insolvency, is not affected by the fact of the same debtor making, on or about the same day, in another State wherein he resides, a general assignment of all his property in the latter State for benefit of his creditors. By the laws of Iowa, a failing debtor may make a mortgage to secure a particular creditor, and the same will not be held invalid by reason of his failing condition;3 and such is none the less the rule if the debtor be a citizen or a resident of another State. The effect of the assignment in the State where that is made, under the laws of that State, as to validity or invalidity thereof, will have no influence or bearing upon the validity of the mortgage in Iowa. It may be stated, as a general rule, that where a foreign assignment conflicts with the local law, the latter will prevail. So that land attached where situated subsequent to a foreign assignment will prevail.

Railroad mortgage. A mortgage of a railroad is valid, though executed by the president in a different State than that where the railroad corporation exists, if its execution be otherwise sufficient and is authorized by the directory, although the vote of authority be silent as to the place where it shall be executed. And such mortgage, if shown on its face to be so intended, may legally call for the rate of interest allowable where the road is situated, although it is a higher rate than that allowed where the mortgage is executed.

XI. LABORERS' LIEN ON INTER-STATE RAFTS.

Rafts of lumber floated out of one State into another, in which latter State a lien on rafts of lumber is given by law to laborers assisting to run such rafts, become liable to the laborers'

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