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"The Law of the place where the contract is made, is "to determine the rate of interest, when the contract specifically gives interest; and this will be the case, though "the loan be secured by a mortgage on land in another "State, unless there be circumstances to show that the "parties had in view the laws of the latter place in respect "to interest. When that is the case, the rate of interest "of the place of payment is to govern " (g).

Another instance, if another were wanting, of the ambiguity and impropriety of the expression lex loci contractús when used, without explanation, to convey the true rule upon this matter of Foreign Contracts.

The language of Paul Voet (h) upon this matter is worthy of attention: "Ne tamen hîc oriatur confusio, "locum contractus duplicem facio, alium ubi fit, de quo jam "dictum, alium in quem destinata solutio. Illum locum "verum, hunc fictum, appellat Salicet (in 1. I Cod. de Summ. "Trin. n. 4). Uterque tamen rectè locus dicitur contractûs, "etiam secundum leges civiles, licet postremus aliquid "fictionis contineat. Hinc ratione effectûs et complementi ipsius contractûs, spectatur ille locus in quem destinata "est solutio; id quod ad modum, mensuram, usuras, et neg"ligentiam, et moram post contractum initum accedentem, "referendum est."

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(g) Kent's Comm. vol. ii. p. 460 (part v., lecture 39).

(h) De Statut. eorumque concursu, sect. ix. c. ii. nn. 11, 12, cited by Rocco, lib. iii. cap. viii. p. 344.

CHAPTER XXXVII.

THIRD DIVISION-MEDIATE EFFECTS OR ACCIDENTAL CONSEQUENCES OF CONTRACTS-DAMAGES-CURRENCY-STORY'S COLLATERAL INCIDENTS, ARISING BY, (1) OPERATION OF LAW, (2) ACT OF THE PARTIES-LIENS, PRIORITY OF— LIABILITY OF PARTNERS.

DCCXVIII. 3. WE have now to consider the third division of the subject-viz.: The Mediate effects and accidental consequences of Contracts (a).

"We have called," says Rocco (b), "the accidental "consequences of contracts, those which neither mediately "nor immediately are derived from them, but which take "their origin from facts subsequent to the contracts them"selves; from circumstances which intervene and affect "the status and the relation in which the contracts have "placed the parties. Between these consequences and "those discussed in the last chapter (c) there are grave "distinctions. The former, when the contract is made in our kingdom, are governed by our laws; the latter are subject to the laws of the place in which the fact which "produced them happened."

These accidental consequences are called "suites" by Felix, as distinguished from "effets" (d).

(a) Vide suprà, § delxviii.

(b) Lib. iii. cap. viii. p. 340.

(c) Immediate and mediate [consequences, discussed in Rocco, lib. iii. cap. vii.]

[(d) "Il ne faut pas confondre les effets des contrats avec les suites accidentelles qu'ils peuvent engendrer."] Felix, liv. ii. tit. i. s. 109.

DCCXIX. One of the most important of these accidental consequences of a contract is the right to damages (dommages-intérêts, and intérêts moratoires) arising out of delay (de mora, la demeure dans l'exécution) in the fulfilment of it. Story (dd) is of opinion that the rule, as to the Law which shall govern the assessment of damages, and determine their rate, is analogous to the rule of Law respecting interest which has been just discussed.

Thus the United States Courts have decided, that if a note be made in a foreign country, for the payment of a certain sum in sugar at a valuation, and there be a breach of the contract, the Law of the place governs the assessment of the damages (e).

The same principle is applied in fixing the rate of damages for dishonoured bills of exchange (ƒ).

DCCXX. The right to damages arises also from wrong done to property, that is, in this branch of Private International Law, to personal property, or ex delicto, perhaps more properly ex maleficio. Thus, if a ship in foreign or colonial waters be wrongfully seized or appropriated, the interest of that locality will be allowed by way of damages against the wrongdoer (g).

DCCXXI. A question (h) often mooted, and not very satisfactorily or consistently settled either by the English or the United States tribunals, arises with respect to the value of the currency by which the amount of a debt, which has been contracted in one country and is sued for in another, is to be ascertained.

(dd) Story, Conflict of Laws, s. 307.

(e) Ibid.

Courtois v. Carpentier, 1 Wash. Circuit Rep. p. 376.

(f) Slacum v. Pomery, 6 Cranch, (Supreme Court U.S.A.) Rep.

p. 221.

Hazlehurst v. Kean, 4 Yeates, Pennsylvania Rep. p. 19.

(g) Story, s. 307. Ekins v. East India Company, 1 Peere Williams, Rep. p. 395.

Consequa v. Willings, Peters, Circuit Rep. pp. 225, 301. (h) Story, s. 308 to s. 313 b.

The following predicaments appear to embrace the cases which arise under this head:

(1.) Where the par value [or rate of exchange] between the currencies of the two countries is nominal or established by Law.

(2.) Where there is no established par.

(3.) Where the debt has been contracted to be paid in a particular specified coin.

(4.) Where the currency, between the time when the debt was contracted or became due, and the time of actual payment, has suffered a depreciation in value.

DCCXXII. With respect to these four predicaments there are two general propositions, the latter being indeed a necessary conclusion from the former, which applies to them all.

First, the primary consideration in all cases is, in what place was the money, according to the original contract, payable; for the creditor, in whatever place he may sue, is entitled to have an amount equal to what he must pay, in order to remit it to the place in which it is payable (i).

This rule is well expressed by the two Voets (k). Paul Voet says, "Quid si in specie de nummorum aut redituum "solutione difficultas incidat, si forte valor sit immutatus; "an spectabitur loci valor, ubi contractus erat celebratus, "an loci in quem destinata erat solutio? Respondeo, ex 'generali regulâ spectandum esse loci statutum, in quem "destinata erat solutio" (l).

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John Voet says, "Si major alibi, alibi minor, eorundem "nummorum valor sit, in solutione faciendâ non tam spec"tanda potestas pecuniæ, quæ est in loco in quo contractus "celebratus est, quam potius quæ obtinet in regione illâ in "quâ contractús implementum faciendum est" (m).

(i) Story, s. 310.

(k) Story (ss. 309, 310) cites these authorities in his notes. (1) De Stat. sect. ix. c. ii. § 15.

(m) Ad Pandect. lib. xii. t. i. s. 25.

The second general proposition flows as a natural conclusion from that which has just been stated-viz. That the creditor is entitled to receive, in the currency of the state in which the suit is brought, the sum to which he is entitled in the state in which the debt is payable, a sum calculated therefore by the real, and not the nominal, par of exchange (n).

This is the doctrine generally adopted by continental jurists. With respect to the third predicament—namely, where the Contract is to be paid in a particular specified coin-Story (o) is of opinion that not the mere bullion value, but the mint value, of the coin in the state in which the coin is issued, furnishes the proper standard, because it is referred to by the parties by its descriptive name as coin.

DCCXXIII. It unfortunately happens, that the decisions of the tribunals in England and in the United States are by no means uniform; they are indeed inconsistent both from a national and an international point of view.

Story goes so far as to pronounce that "there is an "irreconcileable difference in some of the authorities on "this subject" (p). It is probable that the increased and happily increasing knowledge both of the civil and of foreign Law in both states, may lead to judgments settled on the sound principles of general jurisprudence (q).

(n) Story, s. 309. Cash v. Kennion, 11 Vesey, Rep. p. 314 (Lord Eldon, 1805).

(o) s. 309.

(p) s. 311 a.

(q) The English cases are Ekins v. East India Company, 1 Peere Williams, Rep. p. 395 (Lord Chancellor Cowper, 1717).

Delegal v. Naylor, 7 Bingham, Rep. p. 460.

Scott v. Bevan, 2 Barn. & Adolphus, Rep. p. 78 (Lord Tenterden C. J., 1831).

Stapleton v. Conway, 1 Vesey sen. Rep. p. 427 (Lord Chancellor Hardwicke, 1750).

Bourke v. Ricketts, 10 Vesey, Rep. p. 330 (Sir W. Grant, 1804). Saunders v. Drake, 2 Atk. Rep. p. 465 (Lord Chancellor Hardwicke, 1742).

Cash v. Kennion, 11 Vesey, Rep. p. 314.