Douglas County State Bank v. Sutherland

I agree with my associates that the place of contract governs in determining the validity of the note in suit; but I differ from them as to the place of the contract. In my opinion the place of contract of the note in suit was Minnesota and not North Dakota.

The plaintiff is a Minnesota corporation. Its sole place of business is in Minnesota. The note in suit was executed and delivered in renewal of a former note for which, according to the undisputed evidence, the plaintiff paid full value. The maker of the notes resided in North Dakota. He signed both the notes in this state and caused them to be transmitted to the plaintiff by mail. But both the former note and the note in suit, according to their terms, are Minnesota contracts. Both are dated at Alexandria, Minnesota, and made payable at plaintiff's place of business in that city. There was no appearance on the part of the defendant Sutherland, the maker of the note; but he made default. The only appearance made was by the defendant's guarantors, who, according to their contract "for value received" guaranteed the payment of the note at maturity "or at any time thereafter at interest at the rate of 8% per annum until paid, waiving demand of notice of nonpayment and protest."

Where the parties to a contract reside in different states, unless they take the trouble and incur the expense to go to the same place, one of them must manifest his assent in one state, and the other in another. And while there is a conflict in the authorities I believe that the better rule is that the place of performance, rather than the place where the last assent was given, should be deemed the place of contract. And that where a bill or note is executed in one state and made payable in another "It is governed as to its nature, validity, interpretation and effect by the law of the state or country in which it is payable, without regard to the place where it was written, signed or dated, it being presumed that the parties contracted with reference to the law of that place, unless it clearly appears that the parties intended the contract should be governed by the law of the place where it was made or the law of some other place, or unless the parties elect or stipulate that the law of another state or country shall govern." 8 C.J. pp. 92, 93. See also 6 R.C.L. pp. 964, 965; 3 Enc. U.S. Sup. Ct. Rep. pp. 1051, 1052; 2 Whart. Confl. L. 3d ed. §§ 450, 451; Poole v. Perkins, 126 Va. 331, 18 A.L.R. 1509, 101 S.E. 240; Jefferis v. Austin, 182 Wis. 203, 196 N.W. 238; Farm Mortg. Loan Co. v. Beale, 113 Neb. 293, 202 N.W. 877; Sykes v. Citizens Nat. Bank, 78 Kan. 688, 19 L.R.A.(N.S.) 665, 98 P. 206.

In this case there is no evidence and no contention that there was any intention to evade the provisions of chapter 91, Laws 1921, and that the parties resorted to the subterfuge of making an actual North Dakota contract a Minnesota contract in form so as to evade the operation of the laws of this state. I am of the opinion that under the undisputed evidence in this case the appellants by their contract of guaranty guaranteed the payment of a valid Minnesota note and that chapter 91, Laws 1921, has no application.

JOHNSON, J., concurs.