8 In Heebner v. Ins. Co., a policy of insurance upon a ship was written in one State and signed there by the president and secretary of the company, which was established there. It was however stipulated that it was not to be binding until countersigned by the agent in Massachusetts. The insurance was against "total loss only." The ship was captured and condemned as prize, whereupon the owner notified the underwriters that he abandoned the ship and claimed as for a total loss. The court held that the Massachusetts law should determine not only whether a total loss had occurred, but what was the effect thereof; and accordingly decided that the phrase "total loss" covered a constructive loss, that the notice given the underwriters was a sufficient abandonment, and that, according to the Massachusetts rule, one third new for old was to be deducted in estimating the constructive total loss. 4 In London Assurance v. Companhia de Moagens, a cargo of wheat was shipped on a British steamer at New York for Lisbon, and was insured by an English company, through its agents in Philadelphia, "free of particular average unless the vessel be sunk, burned, stranded, or in collision," all losses to be paid in sterling at the company's offices in London, and "claims to be adjusted according to the usages of Lloyds." The ship was in collision before it left port, and the consequent injury to the vessel and bad weather causing some leakage, the salt water entered and injured a cargo of wheat. The captain Association v. Jones, 154 Penn. St. 99, 26 Atl. 253; Masonic Association v. Jones, 154 Penn. St. 107, 26 Atl. 255. In Mullen v. Reed, 64 Conn. 240, 29 Atl. 478, a life insurance policy was issued in Massachusetts to a resident of that State, being written in favor of the assured's "heirs at law." The assured afterwards changed his domicil to Connecticut and died there. The court held that the law of Massachusetts, not that of Connecticut, should control the meaning to be attached to the phrase. This decision was clearly correct; for whatever the rule may be touching the law that should govern the interpretation of a revocable will, upon a change of the testator's domicil (ante, § 148), the above rule must be applied to a contract, whose obligation attaches at the time it is made, and cannot afterwards be altered save by the mutual consent of the parties. 10 Gray (Mass.), 131. of the ship found it necessary to put in at Boston, and after a survey decided to sell the whole cargo for the benefit of all concerned. The question was made whether the insurance contract covered this loss, and it was held that the law of England (lex solutionis), being the law with reference to which the parties contracted, must govern the interpretation of the terms used in the contract. The insurance company was held to be responsible for the loss, because according to the English doctrine "if a ship be once in collision during the adventure, after the goods are on board, the insurers are by the law of England liable for a loss covered by the general words in the policy, though such loss is not the result of the original collision, and but for the collision would have been within the exception contained in the memorandum, and free from particular average as therein provided." 5 In First Nat. Bank v. Shaw, the question was as to the meaning of the phrase "B'k % to T. W. Griffin & Co.," occurring in a bill of lading, executed in Toledo, Ohio, of merchandise there shipped to New York and delivered in Ohio to secure advances made to the consignee in New York. The court, holding that the phrase was to be interpreted according to the business usage in Toledo, said in the course of its opinion: "The true inquiry is, what was the intent of the parties. It would seem in a case like the present, when the contract was made in Ohio by Toledo parties, the money being advanced there and the security taken there, that they had in view in employing words their own usages, even though the goods were to be sent to another State and ultimately sold there if the advances were not repaid." Other examples might be given. The terms, "dollars,"" "pounds," "usance, "month," 10 etc., are instances of words possessing different meanings in different countries, with regard to which questions of this sort may arise. 5 61 N. Y. 283, 293–294. See Huse v. Hamblin, 29 Ia. 501, 4 Am. Rep. 244. 7 Greenwald v. Freese (Cal.), 34 Pac. 73. 8 Story, Confl. L. § 271. 9 Story, Conf. L. § 271. 10 Story, Conf. L. § 270. A fuller examination of the authorities would be of little service, since the circumstances of each case must be looked to in order to ascertain the intention of the parties.11 11 The reader is referred to Whart. Conf. L. §§ 433-439, where an attempt has been made to deduce some general principles from the decided cases. CHAPTER XIX. DISCHARGE OF CONTRACTS. § 187. Various Sorts of Discharge. Under the term discharge of a contract are comprised all matters which, arising superveniently to the execution of the contract, may be urged as a total or partial defense to an action brought to enforce it. They may consist in the actual performance of the contract, or tender of performance, in exact accord with its terms; of the substitution of a new agreement therefor, a release, or a mutual rescission of the contract; of the discharge of a surety by the discharge of the principal or the extension of time, or a discharge in bankruptcy, etc. These various matters of discharge may be classified into three main groups, as follows: (1) Those which result from the performance, or tender of the performance, of the contract according to its exact terms; (2) Those resulting from a supervenient agreement or understanding of the parties; and (3) Those resulting from the mere operation of the law itself, without any express agreement of the parties to that effect, and without performance, or offer of performance, by the promisor. These several sorts of discharge, being entirely distinct in character, are regulated by different principles. It cannot be expected, nor is it true, that the same law will govern them all. The nature of the particular matter of discharge pleaded must first be ascertained before the proper law controlling its effect can be determined. - If it § 188. Discharge by Actual Performance or Tender. be alleged that the contract has been discharged in whole or in part by the actual performance thereof according to its terms, the truth of the allegation becomes a mere question of fact after it has been once ascertained what duties the contract imposes on the promisor. All that is necessary is to apply the principles already considered, by which to determine the proper law governing the obligation and interpretation of the contract, that is to say, the lex solutionis of the contract (in the absence of evidence that the parties had in view a different law). As has been said by the Supreme Court of the United States in a leading case, speaking of the proper law governing a contract: "Matters connected with its performance are regulated by the law prevailing at the place of performance.” Thus in an English case it was held that a contract payable in South Carolina was validly discharged by its payment in South Carolina in depreciated paper money, which was there legal tender. 4 In Graham v. Bank, Graham and his wife resided in Maryland. The wife being the owner of certain shares of stock in a bank in Norfolk, Virginia, dividends accrued upon the shares, and were paid by the bank officers to her husband. By the law of Maryland the wife was entitled to the sole and separate use and control of her property. In Virginia the common law prevailed, and the husband could give a valid acquittance of the wife's debts. The question was whether the bank's payment of the dividends to the husband constituted a valid discharge of its obligation to pay dividends on the wife's stock. The New York court held that since the dividends were payable in Virginia, a payment according to Virginia law was sufficient, though by the lex domicilii the husband was not entitled to the wife's personalty. Though the husband Though the husband was bound to account to the wife for the dividends under the law of Maryland, the payment to the husband discharged the bank under the law of Virginia. 1 See Denny v. Williams, 5 Allen (Mass.), 1; May v. Breed, 7 Cush. (Mass.) 15, 54 Am. Dec. 700. 2 Scudder v. Bank, 91 U. S. 406, 413. Anon., 1 Bro. Ch. Cas. 376. 4 84 N. Y. 393, 38 Am. Rep. 528. If the bank had pleaded a release by the husband, instead of payment to him, the husband's title would have depended upon the Maryland law (lex domicilii), and so would the validity of the release |