the indebtedness, if it arises at all, must arise at the moment the benefit is conferred, or the act done which is alleged to create it. And the locus solutionis of the implied promise will of course be identical with the locus celebrationis.11

§ 164. Negotiable Instruments - Contract of Maker or Acceptor. The situs of negotiable paper deserves special notice. So far as the maker of a negotiable note is concerned, the locus celebrationis and the locus solutionis of his contract are to be ascertained in accordance with the principles mentioned in the preceding sections.' There is no difference in this respect between the maker of a negotiable note and the maker of any other contract to pay money.

The locus celebrationis of the contract of an acceptor of a bill of exchange is of course the place where his acceptance becomes complete and finally binding upon him. This will usually be the place where the acceptance is given. But if the acceptance is for the purpose of negotiation in another State, the bill being subsequently sent thither for that purpose, the locus celebrationis of the contract of acceptance is the State where such negotiation takes place, for only upon its delivery to the holder does the acceptance become obligatory. And if the acceptance be made through an agent, the place where the agent acts (if he has plenary authority) will be the locus celebrationis of the principal's contract.

The locus solutionis of an acceptor's contract depends primarily, as in other cases, upon the intention. If the acceptor names in his acceptance the place where he proposes to pay, or if, in the event of his silence, the bill designates a place of payment, that place will be the locus solutionis of his contract.

11 Crumlish v. Cent. Imp. Co., 38 W. Va. 390, 18 S. E. 456; Grant v. Healy, 3 Sumner (U. S.), 523. See Porter v. Price, 49 U. S. App. 295, 80 Fed. 655; Lanusse v. Barker, 3 Wheat. 101; Merchants' Bank v. Griswold, 72 N. Y. 472, 28 Am. Rep. 159.

1 Ante, §§ 157, 158, 163.

2 Tilden v. Blair, 21 Wall. 241, 247; Hall v. Cordell, 142 U. S. 116; Farmers' Nat. Bank v. Sutton, 3 C. C. A. 1, 52 Fed. 191; Merchants' Bank v. Griswold, 72 N. Y. 472, 481, 28 Am. Rep. 159; Lennig v. Ralston, 23 Penn. St. 137. This applies also to the contract of the maker of a note.

Scudder v. Bank, 91 U. S. 406; ante, § 158.

But in the absence of such controlling circumstances, the general rule is that the locus solutionis of the acceptor's contract will be his place of residence or business, or his address on the face of the bill.'

A contract to accept a bill or draft is usually regarded as an actual acceptance thereof, as against a bona fide holder, unless a specific place for the future acceptance of the bill is designated." But as between the original parties, it is an ordinary contract, and governed by the same rules.

§ 165. Indorser's or Drawer's Contract. Upon the indorsement of a bill or note, the indorser enters into a new contract, collateral to and distinct from the original contract of the maker or acceptor. Indeed the contract of indorsement (unless it be merely for accommodation) comprises two distinct contracts, one of which is an executed assignment, operating to transfer to the indorsee such title to the chose in action as the indorser possesses, and such rights as he has against prior parties to the note or bill, and the other an executory contract, by which the indorser undertakes that the bill or note shall be paid at maturity.

So far as concerns the executed transfer represented by the indorsement, it is an instance of the voluntary transfer of personal property, the "proper law" to govern which we have seen to be the law of the place where the transfer is made (lex loci contractus). The nature of the title in the indorsee is deter

2

4 Lebel v. Tucker, L. R. 3 Q. B. 77; Scudder v. Bank, 91 U. S. 406, 413; Freese v. Brownell, 35 N. J. L. 285, 10 Am. Rep. 239; Coffman v. Bank, 41 Miss. 212, 90 Am. Dec. 371; Hunt v. Standart, 15 Ind. 33, 77 Am. Dec. 79, 86; Worcester Bank v. Wells, 8 Met. (Mass.) 107.

5 Scudder v. Bank, 91 U. S. 406; Hubbard v. Exchange Bank, 18 C. C. A. 525, 72 Fed. 234; Exchange Bank v. Hubbard, 10 C. C. A. 295, 62 Fed. 112; Garrettson v. Bank, 47 Fed. 867; Merchants' Bank v. Griswold, 72 N. Y. 472, 28 Am. Rep. 159; Carnegie v. Morrison, 2 Met. (Mass.) 381, 398, 400. Hall v. Cordell, 142 U. S. 116.

1 Horne v. Rouquette, 3 Q. B. Div. 514, 28 Eng. Rep. 424; Aymar v. Sheldon, 12 Wend. (N. Y.) 439, 443, 27 Am. Dec. 137; Everett v. Vendryes, 19 N. Y. 436, 437; Freese v. Brownell, 35 N. J. L. 285, 10 Am. Rep. 239, 241; Nichols v. Bank, 2 W. Va. 13, 94 Am. Dec. 501; Felch v. Bugbee, 48 Me. 9, 77 Am. Dec. 203; Stubbs v. Colt, 30 Fed. 417, 419.

2 Ante, §§ 122, 128 et seq. But in favor of creditors, and other third persons, it will be remembered, the lex fori is frequently substituted.

mined by the law of the place of indorsement, and this applies equally to other choses in action as well as to negotiable instruments.

Hence the right of the indorsee as holder of a note or bill, or of the assignee of any chose in action, to sue the original promisors, and the nature and extent of his claim against them, will depend upon the law governing the indorsement or assignment under which he holds. If the law of the place of the transfer confers upon the assignee the legal title to the chose in action, so that he may there sue the original promisors at law in his own name, the same results will follow everywhere, even in States by whose law, if the transfer had taken place there, only an equitable title would have passed to the assignee.

Thus, in Levy v. Levy, an assignment was made in New York of a chose in action, which by the law of New York vested the legal title in the assignee, with the incidental right to sue upon it in a court of law in his own name. By the law of Pennsylvania (the forum) the assignment, if made there, would have vested only an equitable title in the assignee, who could have sued in a court of law only in the name of his assignor. The Pennsylvania court held that, the law of New York (lex loci contractus) having conferred upon the assignee the legal title, he was entitled to sue the promisor in his own name in Pennsylvania. The court admitted that if the law of New York had merely given the assignee the right to sue at law in his own name, without conferring upon him the legal title, this would not have sufficed to sustain an action in Pennsylvania in his own name, since this, standing alone, would be merely a matter pertaining to the remedy, to be controlled by the lex fori."

So, the indorsee or holder of a bill or note succeeds to the rights of his assignor against the prior indorsers to the extent

3 See Brabston v. Gibson, 9 How. 263; Trimbey v. Vignier, 1 Bing. N. c. 151, 27 E. C. L. 336; Bradlaugh v. De Rin, L. R. 5 C. P. 473; Horne v. Rouquette, 3 Q. B. Div. 514, 517, 28 Eng. Rep. 424; Brook v. Van Nest, 58 N. J. L. 162, 33 Atl. 382.

478 Penn. St. 507, 21 Am. Rep. 35. See also Jordan v. Thornton, 2 Eng. (Ark.) 224, 44 Am. Dec. 546, 548.

• Post, § 206.

permitted by the law of the place where the transfer to him is made, and no further. But since his assignor can hold each indorser only upon his independent collateral contract of indorsement, and the liability of each such indorser depends upon the "proper law" governing his particular contract of indorsement, it follows that the rights of the indorsee or holder against such prior indorsers will also depend upon the "proper law" of the executory contract of indorsement made by the particular indorser whom he seeks to hold liable."

This brings us to the consideration of the second contract, — the executory contract, created by the act of indorsement. This contract is in the nature of a contract of guaranty, an undertaking that the bill or note will be paid when properly presented at maturity. Being an executory contract, it may have a locus solutionis distinct from the locus celebrationis.

Little difficulty is usually experienced in ascertaining the locus celebrationis of the contract. The place where the indorser puts his name on the paper will ordinarily be the place where his contract is entered into. But it is not the mere putting of his name upon the paper that constitutes the indorsement. It does not usually take effect, either as an executed or executory contract, until the note so indorsed is delivered to the indorsee or holder. The place where the note is actually indorsed is immaterial if the delivery or transfer occurs elsewhere.

6 Carlisle v. Chambers, 4 Bush (Ky.), 272, 96 Am. Dec. 304; Bradlaugh v. De Rin, L. R. 5 C. P. 473. See Horne v. Rouquette, 3 Q. B. Div. 514, 517, 28 Eng. Rep. 424; Trimbey v. Vignier, 1 Bing. N. c. 151. See Everett v. Vendryes, 19 N. Y. 436; Reddick v. Jones, 6 Ired. L. (N. C.) 107, 44 Am. Dec. 68; Lebel v. Tucker, L. R. 3 Q. B. 77, 83. This matter is discussed more at length hereafter. Post, § 182.

7 Young v. Harris, 14 B. Mon. (Ky.) 556, 61 Am. Dec. 170; Douglas v. Bank, 97 Tenn. 133, 36 S. W. 874, 876; Brook v. Van Nest, 58 N. J. L. 162, 33 Atl. 382.

8 Fant v. Miller, 17 Gratt. (Va.) 47; Rose v. Bank, 20 Ind. 94, 83 Am. Dec. 306; Gay v. Rainey, 89 Ill. 221, 31 Am. Rep. 76; Young v. Harris, 14 B. Mon. (Ky.) 556, 61 Am. Dec. 170, 171; Briggs v. Latham, 36 Kan. 255, 59 Am. Rep. 546, 13 Pac. 393; Carnegie Steel Co. v. Construction Co. (Tenn.), 38 S. W. 102, 103; Stanford v. Pruet, 27 Ga. 243, 73 Am. Dec. 734; Dunscomb v. Bunker, 2 Met. (Mass.) 8; Lee v. Selleck, 33 N. Y. 615, 618; Cook v. Litchfield, 9 N. Y. 279; Stubbs v. Colt, 30 Fed. 417.

So, if the indorsement be for accommodation merely, the note or bill being sent or taken to another State for negotiation, the indorsement does not become binding upon the accommodation indorser until the negotiation occurs. The place at which the note goes into the hands of a holder for value is in such case the locus celebrationis of the indorser's contract.'

With respect to the locus solutionis of the executory contract of indorsement, the views of the authorities are conflicting. Of course no difficulty will arise if the indorser names in his indorsement the place where he undertakes to pay should such a course become necessary. But this is rarely done. Usually the indorsement is silent upon this point.

Although the general rule is that, if the contract designates no place of performance, the locus solutionis will coincide with the locus celebrationis, it will be remembered that this is founded merely upon the presumption of the intent and purpose of the parties, and may yield to evidence or inference of some other intent.

The locus solutionis of a contract of indorsement depends upon the exact character of the promise implied from the indorsement. We have seen that it constitutes an undertaking on the part of the indorser that the bill or note will be paid upon proper presentment at maturity. But is the indorsement a conditional promise by the indorser to pay generally, or at the place where he makes the promise, or is it a promise to pay at the place where the money should have been paid at maturity, that is, at the locus solutionis of the bill or note ?

Upon the answer to these questions depends the locus solutionis of the contract of indorsement. And it is a very important point to determine, for the lex solutionis of his contract will generally regulate the rights and duties of the indorser with respect to all matters connected with the performance of his contract.

Many of the authorities follow the general rule and hold that the locus solutionis of the contract of indorsement, no special place of performance being named, is identical with the locus

9 See cases cited in note 8, supra.