11

the officers of a corporation who sign and record false certificates of the amount of its capital stock liable for all its debts, etc. Here too it was at one time thought that such statutes were penal and for this reason not enforceable in other States. But it is now settled that such statutes are not penal. Their pur pose is not to punish, but to give creditors additional security for their debts.10 Such liabilities are quasi-contractual, the situs of which is the situs of the corporation, not of the corporators, and if precise and definite in character, and no special remedy to enforce them is provided by the law creating them, they may be enforced in other States. The general rule has been thus accurately laid down by the California court: "Where a statute creates a right and prescribes a remedy for its enforcement, that remedy is exclusive. Where a liability is created which is not penal, and no remedy is prescribed, the liability may be enforced wherever the person is found. The procedure however will be entirely governed by the law of the forum. If the law creating the liability provides for a particular mode of enforcing it, the mode limits the liability. If it be a contract, the parties contracted with the understanding that they can be held liable in no other way. And such liability cannot be enforced in another State. Here a special remedy is provided, and not only so, but plainly it was intended that it should be the only remedy."

The main question in these cases is not whether there exists a liability in other States than the one enacting the statute, for it seems to be universally conceded that the liability does exist even in States which refuse to enforce it,12 but whether there is

• Kritzer v. Woodson, 19 Mo. 329; Ochiltree v. Contracting Co., 54 Mo. 113.

10 Huntington v. Attrill, 146 U. S. 657, 666, 676; Stewart v. R. R. Co., 168 U. S. 445; Russell v. R. R. Co., 113 Cal. 258, 45 Pac. 323; Guerney v. Moore, 131 Mo. 650, 32 S. W. 1132; Marshall v. Sherman, 148 N. Y. 9, 10, 29, 42 N. E. 419; First Nat. Bank v. Dillingham, 147 N. Y. 603; Hancock Nat. Bank v. Ellis, 166 Mass. 414; Post v. R. R. Co., 144 Mass. 341, 345. But see Coffing v. Dodge, 167 Mass. 231, 45 N. E. 928.

11 Russell v. Pac. R. R. Co., 113 Cal. 258, 45 Pac. 323, 324. See also Marshall v. Sherman, 148 N. Y. 9, 29.

12 Post v. R. R. Co., 144 Mass. 341, 344, 345.

in the State of the forum the machinery proper and necessary to enforce the peculiar liability, so that care may be taken to see that no injustice be done.18

It is obvious that if a special and peculiar remedy is given by the law of the State creating the liability, no other State will in general possess the machinery adequate to enforce it, and its courts would have no authority to enforce it by other means. If the statute creating the liability leaves the remedy to be determined by the application of general principles of jurisprudence, then its enforcement in a foreign State must depend upon whether such State, through its courts, possesses adequate machinery to enforce it, without danger of injustice. Hence a liability arising upon the same statute may be enforced in one State when it will not be enforced in another.15 Even in the same State the machinery may be adequate for the enforcement of certain rights in connection with the liability, while not adequate for other purposes. In that event, since the existence of the liability is recognized everywhere, such redress as the courts of the forum may properly grant will be afforded. Hence in Massachusetts, whose courts refuse to directly enforce a quasi-contractual liability of this kind, it was nevertheless held that if the relief sought was merely a discovery in equity, by the officers of the corporation, of the stockholders and the number of shares held by each, the relief should be granted, although the purpose of the discovery was to enforce by suit in another State a personal liability imposed upon the stockholders by the laws of another State.16

18 Post v. R. R. Co., 144 Mass. 341; Bank v. Rindge, 154 Mass. 203. See Bank v. Rindge, 57 Fed. 279; Guerney v. Moore, 131 Mo. 650, 32 S. W. 1132. 14 See Russell v. Pac. R. R. Co., 113 Cal. 258, 45 Pac. 323; Marshall v. Sherman, 148 N. Y. 9, 42 N. E. 419; Bank v. Rindge, 154 Mass. 203; Stewart v. R. R. Co., 168 U. S. 445.

16 See Bank v. Rindge, 154 Mass. 208; Bank v. Rindge, 57 Fed. 279 [U. S. Court for California]; Guerney v. Moore, 131 Mo. 650, 32 S. W. 1132. These cases all arose under the same Kansas statute, making stockholders liable to creditors of the company for an amount equal to the amount of their stock. In the Massachusetts case, it was held that the judicial machinery of that State was inadequate to ensure full justice. In the other two cases the lia bility was enforced.

16 Post v. R. R. Co., 144 Mass. 341.

§ 11. Fifth Exception

·Transactions relating to Immovable Property. It is generally admitted that transactions relating to lands or immovable property of any kind are to be governed by the law of the place where the property is situated (lex loci rei sitæ or lex situs).1

Although this principle is generally recognized, the reason for the doctrine has not always been kept clearly in view. In truth it simply constitutes one branch of the first exception, already discussed, and what is known as the lex situs is, in the last analysis, nothing more than the lex fori. Since immovable property is fixed forever in the State where it lies, and since no other State can have any jurisdiction over it, it follows necessarily that no right, title, or interest can be finally acquired therein, unless assented to by the courts of that State, in accordance with its laws. The courts of no other State can finally pass upon such questions, so as to give or take away from any litigant a claim to the property. On the other hand, the courts of the situs of the land will be peculiarly rigid in their requirement that the law of the situs be complied with in regard to the transfer of the title to that class of property. The policies of each State in connection with the transfer of land within its limits are justly ranked amongst the most important of all its policies, no outside interference with which will be tolerated. Every effort is made by each State to have its laws touching the devolution, transfer, and charge of lands within its borders as definite and certain as possible. Particular formalities are required which are not required in other matters. And it is of the utmost importance that the legal records of such transactions, constituting chains of title to land, should be kept free from blemish, irregularity, or confusion with the requirements of other States.

Hence it becomes peculiarly a part of the policy of every State that no transactions relating to the transfer of any interest in or title to immovable property situated there shall be upheld,

1 United States v. Crosby, 7 Cr. 115; Clark v. Graham, 6 Wheat. 577; Kerr v. Moon, 9 Wheat. 565; McCormick v Sullivant, 10 Wheat. 192; Darby v. Mayer, 10 Wheat. 465; Ross v. Ross, 129 Mass. 243, 245, 37 Am. Rep. 321; and other cases cited in note 5, infra.

if violative of its own law, whether valid by the laws of foreign States or not. These considerations are amply sufficient to induce the courts of the situs of land (when the situs is the forum) to prefer their own laws upon this subject to those of any other State."

Nor will the courts of other States attempt to enforce their own laws with respect to land situated elsewhere, not only because of the spirit of comity and their unwillingness to engage in conduct towards other States, which they would not tolerate in other States towards themselves, but also, and perhaps chiefly, because of their utter inability to render any judgment or decree that would be final and effectual to transfer any interest in the land. Instead, therefore, of rendering idle judgments in accordance with their own law, the courts, in dealing with the title to foreign real estate, will seek to determine the rules laid down by the lex situs of the land, and will decide in accordance with that law, for to it the parties must finally appeal in any event.1

Thus it comes to be a well settled principle of private international law, fortified by a great mass of authority, that all questions relating to the transfer of title to immovable property, wherever arising, will be governed by the lex situs, the law of the ultimate forum in which all such questions must finally be decided."

2 See Williams v. Saunders, 5 Coldw. (Tenn.) 60, 76; Sneed v. Ewing, 5 J. J. Marsh. (Ky.) 460, 22 Am. Dec. 41, 56.

* See Dicey, Confi. L. 38-40; Rodgers v. Rodgers, 56 Kan. 483, 43 Pac. 779, 781. See Guillander v. Howell, 35 N. Y. 657, 660.

4 See Hawley v. James, 7 Pai. Ch. (N. Y.) 213, 32 Am. Dec. 623.

5 Watkins v. Holman, 16 Pet. 26; Ross v. Ross, 129 Mass. 243, 245, 37 Am. Rep. 321; Williams v. Saunders, 5 Coldw. (Tenn.) 60, 70; Wick v. Dawson, 42 W. Va. 43, 24 S. E. 587; Swank v. Hufnagle, 111 Ind. 453, 12 N. E. 303; Otis v. Gregory, 111 Ind. 504, 13 N. E. 39; Carpenter v. Bell, 96 Tenn. 294, 34 S. W. 209; Knox v. Jones, 47 N. Y. 389, 395; Rice v. Harbeson, 63 N. Y. 493, 502; Staigg v. Atkinson, 144 Mass. 564, 569; Chipman v. Peabody, 159 Mass. 420, 34 N. E. 563; Polson v. Stewart, 167 Mass. 211, 45 N. E. 737; Richardson v. De Giverville, 107 Mo. 422, 17 S. W. 974, 977; Keith v. Keith, 97 Mo. 224, 10 S. W. 597; Lamar v. Scott, 3 Strob. L. (S. C.) 562; Washburn v. Van Steenwyk, 32 Minn. 336, 20 N. W. 324; Heine v. Ins. Co., 45 La. Ann. 770, 13 So. 1; Bronson v. Lumber Co., 44 Minn. 348, 46 N. W.

Not only does the lex situs control transfers of land to the extent of invalidating such transfers of title as are not in accordance with the lex situs, though valid where entered into, but the converse is also true. If valid by the lex situs, the transaction may be upheld, though invalid where entered into.

A qualification of the rule however must be observed, where the question relates not to the transfer itself, but to some collateral incident of the transfer. Thus, while in case of a mortgage of land or an assignment thereof for the benefit of creditors the lex situs will still govern to the extent that such transfer constitutes a muniment of title as between the parties, it does not follow that an instrument sufficient for this purpose under the lex situs, but which transfers a title voidable by creditors, will in the latter respect also be governed by the lex situs. Such matters do not constitute any part of the muniment of title, and are merely matters of local policy. Such, for instance, are laws of the situs avoiding, at the instance of creditors thereby defrauded, assignments which prefer creditors, or to which is not appended an inventory of the property assigned, or to which bonds by the trustees for the due performance of their duties are not attached. These requirements, and others of the same kind, are for the benefit of creditors. As between the parties, the assignment, if in conformity to the lex situs, is valid, and if no creditors complain, will be sustained. It is manifest that requirements like those above mentioned do not constitute part of the title, but are intended for the collateral purpose of securing creditors. They are mere matters of policy, and may or may not be intended by the legislature to protect foreign as well as domestic creditors, their effect depending upon the interpretation placed upon the policy by the courts of the situs and forum.

570; Ford v. Ford, 70 Wis. 19, 33 N. W. 188, 194; Frazier v. Boggs, 37 Fla. 307, 20 So. 245; Rodgers v. Rodgers, 56 Kan. 483, 43 Pac. 779, 781; Glenn v. Thistle, 23 Miss. 42, 49; Penfield v. Tower, 1 N. D. 216, 46 N. W. 413; Post v. Bank, 138 Ill. 559, 28 N. E. 978; Wood v. Wheeler, 111 N. C. 231, 16 S. E. 418.

6 Succession of Cassidy, 40 La. Ann. 827, 5 So. 292; Post v. Bank, 138 Ill. 559, 28 N. E. 978; Chipman v. Peabody, 159 Mass. 420, 34 N. E. 563.