Bank of the United States v. Donnally (1834)

Bank of the United States v. Donnally (1834) 33 U.S. 361 involved the effect of the addition of a seal that, while the nature, validity, and interpretation of contracts are to be governed by the law of the country where the contracts are made, or are to be performed, "the remedies are to be governed by the laws of the country where the suit is brought; or, as it is compendiously expressed, by the lex fori." Bank of the United States v. Donnally, was an action was brought in Virginia on a promissory note made in Kentucky, where such a note had the same force and effect as a sealed instrument. It was contended by the plaintiff that the Statute of Limitations applicable to sealed instruments must be applied to the note in the Virginia courts, although the laws of that State did not recognize it as such. Disposing of this contention the court said: "If, then, it were admitted, that the promissory note now in controversy were a specialty by the laws of Kentucky, still it would not help the case, unless it were also a specialty, and recognized as such, by the laws of Virginia; for the laws of the latter must govern as to the limitation of suits in its own courts, and as to the interpretation of the meaning of the words used in its own statutes." The Court had to decide whether a promissory note in the Bank's favor that was signed in Kentucky could be enforced in Virginia, over an assertion that the statute of limitations in Virginia had run. In the course of upholding Virginia's right to apply its own limitations period (and thus defeat the Bank's action), Justice Story wrote that "whatever may be the legislation of a state, as to the obligation or remedy on contracts, its acts can have no binding authority beyond its own territorial jurisdiction. Whatever authority they have in other states, depends upon principles of international comity, and a sense of justice." (Id. at 372.) Justice Story wrote that whatever may be the legislation of a state, as to the obligation or remedy on contracts, its acts can have no binding authority beyond its own territorial jurisdiction. Whatever authority they have in other states, depends upon principles of international comity, and a sense of justice. Justice Story noted that a dismissal under a Virginia statute of limitations would operate as a bar to a subsequent suit in the same state; but not necessarily as an extinguishment of the contract elsewhere. (Id. at 370.)