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ment of them by the plaintiff, and his right under the agreement and facts to recover of the defendant one half of the amount. The whole claim proceeds on the collateral agreement, and there is no pretense of grounding the suit, as holder or indorsee, on any premises contained in the notes, or in the indorsements on them.

There is also a good consideration for this collateral agreement. It is the promise of the plaintiff before hand to lose one half, if the defendant would become a surety with him and lose the other half, and the actual payment afterwards of the whole by the plaintiff. Being then a collateral agreement by parol, which is sued, it stands free from the objection to the parol evidence offered to prove it. Were the action on the notes, and this evidence offered to contradict them, it would be entirely different; because, in an action on a note, parol testimony is not competent to vary its written terms and probably not to vary a blank indorsement by the payee from what the law imports. Civil Code of Louisiana, art. 2256; Stone et al. v. Vincent, 6 Martin, N. S. 517; 15 La. R. 539; 10 Ibid. 205; 1 Peters's C. C. R. 84; Bank of the United States v. Deane, 6 Peters, 59; 3 Camp. N. P. 56, 57; 9 Wheat. 587; 1 Martin, N. S. 641; Chitty on Bills, 541; 12 East, 4; 4 Barn. & Ald. 454. So, between the contracting parties, likewise, all prior conversation is supposed, as far as binding, to be embodied into the written contract. 4 Louisiana R. 269; Taylor v. Riggs, 1 Peters, 591; 8 Wheat. 211. But the parol evidence here is 292*] not offered *in any action on the note, or to alter its terms or its indorsements; nor is any prior or contemporaneous conversation offered to vary the note, or its indorsement, in an action founded on either of them. But it is offered to prove a separate contract, which was made by parol, and is of as high a character as the law requires in such cases, and this evidence is plenary and entirely satisfactory to substantiate the separate contract. It is true, at the same time, that, after a prior indorser has paid a note, he cannot recover, even in an action, not on it, but for contribution of one half from a second indorser, if they were not in fact joint sureties, nor in fact made any collateral contract whatever, nor in fact had any communication whatever as to their liability. McDonald v. Magruder, 3 Peters, 474; 3 Harris & Johns. 125; 7 Johns. 367.

pecially if it did not contradict any legal implication from the name being there. And hence, under circumstances like these, where, as in Louisiana and some other States, it is implied by law that such a person puts his name there as a surety or guarantor, no objection exists to parol proof to that effect. 10 Louisiana R. 374; Lawson v. Oakey, 14 Ib. 386; Nelson v. Dubois, 13 Johns. 175; Dean v. Hall, 17 Wend. 214; 5 Mass. R. 358; 12 Ibid. 281; 1 Vermont R. 136; Ulen v. Kitteridge, 7 Mass. R. 233; 4 Wash. C. C. R. 480; 5 Serg. & Rawle, 363. In White v. Howland, 9 Mass. R. 314, he is held to be liable as if signing with the maker as a surety. But however much, in some States, the practice may go beyond this in suits between the parties to the agreement, as in 1 Hammond, 420, and 5 Serg. & Rawle, 363, it could generally not be competent to prove anything by parol, in actions on the note, contrary to what is written or to what is implied in law. Bank of the United States v. Dunn, 6 Peters, 59.

And in other States and in other circumstances, where the inference of law is not that such a name is placed there as a surety, it is very doubtful whether, in a suit on the note, proof that he did it only as a surety is competent. 6 Martin, N. S. 517; Bank of the United States v. Dunn, 6 Peters, 59.

*In England, in the case of such a [*293 name on the back of a bill of exchange, the person may be treated as a new drawer (Chitty on Bills, 241); and if the payee there has also indorsed the note, the implication deemed most proper is, that another name on the back is that of a second indorser, and should so be held in the hands of third persons. Chitty on Bills, 188, 528; Holt's Nisi Prius, 470; 5 Adolph. & Ellis, 436; 6 Nev. & Man. 723. So, 6 Martin, 517. It will be seen, however, that these last are generally cases of actions on the notes or bills of exchange themselves, while the present case is not brought on the note itself, but on a distinct and collateral contract.

Another suggestion bearing on the case might be, that in Louisiana the surety, when paying, may step into the shoes of his creditor, if he pleases, by subrogation, and enjoy all his rights against the debtors or other sureties. Hewes et al. v. Pierce, 1 Martin, N. S. 361; Calliham v. Fanner, 3 Rob. Louisiana, 299; Civil Code of Louisiana, art. 2157. But there the suit is probably in the creditor's name, and But the present is a case differing, toto cælo, not, as here, in that of the surety. So, in some from that. Here, by a deliberate arrangement countries where the civil law prevails, such a before a public notary, and by the positive evi-contract as this, deliberately made before a dence of two witnesses, the two indorsers were notary, and by him reduced to writing by reco-sureties, and specially agreed to bear any quest of the parties, would in law be deemed loss equally between them; and the right to re-equivalent to a contract in writing; and on that cover is therefore entirely clear. 3 Peters, ground be admissible even in a suit on the note 477; Douglass v. Waddle, 1 Hammond, 413, between the original parties to it. 420; Deering v. The Earl of Winchelsea, 2 Bos. & Pull. 270.

The doings of the parties thus have a sort of public form given to them, quasi judicial, and There are two or three other views connected they are bound by them, though not signed by with this part of the case which may be use- the parties. 2 Domat's Civil Law, b. 2, tit. 1, fully adverted to, but by which we do not de-sec. 1, art. 28; and tit. 5, sec. 5, pp. 661, 662.

cide it.

It would be there deemed an act of too much Thus, where a person like Phillips, the orig- deliberation by the parties, and of too much inal defendant, was not a party to a note, but formality before that public officer, to be put his name on the back of it, parol testimony treated merely as an ordinary verbal arrangehas been deemed competent to show the real ment. Coop. Justinian, 586; 3 Burr. 1671; object for which it was placed there; and es-Story on Bills, sec. 277. But, though the

Louisiana code, founded chiefly on the civil law, may not expressly abrogate such a doctrine, it does not in terms make records by a notary valid, unless signed by the parties, or consisting of copies of papers signed by the parties and acknowledged before witnesses. Civil Code, art. 2231, 2413; 8 Martin, N. S. 568; 10 Louisiana R. 207, 354. And though the paper containing this is signed by the parties to the sale and attested by witnesses, it is not signed by Preston and Phillips, the parties to this arrangement.

Upon the whole case, then, we are happy to find that no legal objection seems to be tenable against making the original defendant meet an engagement which, on the record, he appears to have been bound in honor and justice, no less than law, faithfully to discharge. Although the court have deemed it proper thus to deliver an opinion on this case, as it has been argued by the counsel for the plaintiff in error, yet the death of the plaintiff has since been suggested; and no appearance is entered for the defendant. We shall not, therefore, enter judgment It is not necessary, however, to decide ab-in conformity to the opinion until the defendant solutely on the effect of either of these last or the representatives of the deceased appear. views. Deeming the action here to be founded on the collateral agreement, and deeming the evidence offered to be competent, for the reasons first stated under this head, these conclusions will virtually dispose of the last six exceptions contained in the record of this case.

Thus, as to Barrow's deposition, the admission of which was the ground of one of these exceptions, it is clearly competent to prove this 294*] *separate parol contract in a suit on that, and not on the note. So, the certificates and notices, also excepted to, were properly proved as a part of the collateral transaction under the general expressions in the petition, and not as notices that should be specially set

out in a declaration, where notes are counted on by a holder. In a case like that, the averment of them and the proof are highly material, but in the former case they are rather historical and merely a part of the res gestæ, without its being essential to give them in de tail. The original plaintiff avers in the petition that the notes were protested, and that he was obliged to pay them, which would not have been the case without due notices; and this is quite enough in an action on a collateral undertaking.

*JAMES INNERARITY, Plaintiff in [*295

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Motion overruled and case continued to next term.

WILLIAM G. COOK, Plaintiff in Error,

V.

ants in Error.

So, the notary's evidence, which is another of the exceptions, becomes under this aspect entirely competent, and the written memorandum made by him at the time, which is another objection, was also admissible evidence to refresh his memory, if not per se of the facts stated in it. Greenleaf's Ev. sec. 436, 437. That it was admissible to refresh his memory, JOHN L. MOFFAT and Joseph Curtis, Defendsee Smith v. Morgan, 2 M. & Rob. 259; Horne v. McKenzie, 6 Cl. & Fin. 628. Other cases say such a memorandum is admissible itself to go to the jury. Greenl. Ev. sec. 437, note; 1 Rawle, 182; Smith v. Lane et al. 12 Serg. & Rawle, 84; 2 Nott & McCord, 331; 15 Wend. 193; 16 Ibid. 586-598. If this last be a rule controverted, the writing here was "the act of sale," and contained other matters as to the transaction in connection with this as the whole terms of sale, which were clearly competent, and the whole property went together to the jury as exhibiting the progress and character of the transaction, beside being admissible to refresh the memory of the witness. Bullen v. Michel, 2 Price's Ex. R. 422, 447, 476.

So, the evidence of the sale of Carr's prop erty and of the transfer of it to the original plaintiff, Preston, by the sheriff, and the terms of the transfer, though objected to, are mere links in the chain of the transaction, and unexceptionable in that view; and were, like the evidence of the former sale to Carr by Barrow, duly authenticated.

Notes-lex loci-Maryland insolvent law cannot discharge citizen from contract made in New York with its citizen-State court bound to conform to decision of this court declaring State law unconstitutional.

A contract, made in New York, is not affected by a discharge of the debtor under the insolvent laws of Maryland, where the debtor resided, although the insolvent law was passed antecedently to the

contract.

The prior decisions of this court upon this subject reviewed and examined.

THIS

HIS case was brought up by a writ of error from the Circuit Court of the United States

for the District of Maryland.

and Curtis were citizens of New York.
Cook was a citizen of Maryland, and Moffat

NOTE.-Lex loci, and lex fori as to interpretation, effect and validity of bills and notes, see note to 3 L. ed. U. S. 205.

Conflict of laws as to negotiable paper, see note to 61 L. R. A. 193.

It was an action brought in July, 1835, by Moffat and Curtis against Cook, upon the common money counts. Cook confessed judgment, subject to the opinion of the court upon the following case stated, namely:

In Circuit Court of the United States, Fourth
Circuit, District of Maryland.

John L. Moffat and Joseph Curtis, surviving
partners of Jonathan Wilmarth, v. William
G. Cook.

Statement of Facts. John L. Moffat, Joseph Curtis, and Jonathan Wilmarth (the last of whom is now deceased) were citizens of the State of New York and resident there, and partners trading under the name and firm of Wilmarth, Moffat & Curtis, and the defendant was a citizen and resident of Maryland during the times when the contracts and transactions upon which this suit is founded, or which constitute the causes of this action, were entered into and had and made between the said firm and said Cook.

That the course of dealing was, that Cook, the defendant, used to write to said firm, ordering such articles or goods as he wanted, and they, said firm, sent them to him, and charged 296*] the goods in *their books. In order to settle the account current from time to time, Cook sent to the said firm (usually by mail, sometimes, perhaps, otherwise) his note at six months, and these notes averaged $500 per month, and were punctually paid, for a time, in Baltimore. Cook at length became embarrassed, and wanted extensions, until he stopped payment entirely; being then indebted to said firm, on book accounts,... $2,104 98 And owing 1 note, due 4th April, 1832, for

500 00

These notes were drawn and dated at Baltimore, by Cook, and sent by him to his said attorney, at New York, and there delivered by said attorney to the said firm; they were given for the amount of Cook's account, and the notes

then had and held by said firm against Cook;
the old notes being then given up to his attor-
ney. These three notes and the consideration
thereof, namely, the goods sold and delivered
as aforesaid, constitute the ground of this ac-
tion; the amount of the notes being the amount
claimed. It is also admitted that said Cook has
applied for and obtained the benefit of the in-
solvent laws of Maryland since such notes fell
due.

Edward Hinkley, Attorney for Plaintiffs.
J. Glenn, for Defendant.

Upon the foregoing statement of facts, the plaintiffs pray for a general and unqualified judgment, notwithstanding the release of Cook, since the making of said notes, under the insolvent laws of Maryland; and the plaintiffs rely upon the cases of Ogden v. Saunders, *12 Wheat. 213; Boyle v. Zacharie and [*297 Turner, 6 Peters, 634; Frey v. Kirk, 4 Gill & Johns. 509.

The circumstances of the notes being dated and made at Baltimore, in favor of citizens, at the time, of New York, does not make the contract a Maryland contract, any more than did the acceptance of bills of exchange by Mr. Ogden, in the State of New York, make such acceptance a New York contract, so as to be discharged by Mr. Ogden's release under the insolvent laws of that State.

The evidences of contracts made between citizens of different States cannot bear date in both the States of the respective parties. In the nature of things, and according to the course of business, they would bear date and be signed by one party only, in one of the States; most commonly in the State of the citizenship and residence of the party signing. And it would be immaterial in principle in which of the States it might bear date. It is a contract between citizens of different States at the time when made, and this is the fact and the principle which excludes it from the operation and 800 00 effect of a release of the debtor under the insolvent laws of his State.

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500 00
416 02
500 00

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500 00

500 00 500 00 $6,321 00

The above notes were remitted by Mr. Cook to said firm previously to March, 1832, when he stopped payment. On the 7th June following, his New York creditors generally agreed to give him time to pay, and the said firm of Wilmarth, Moffat & Curtis, about that time, by arrangement made with Mr. Disosway, Cook's attorney in New York, gave time, and took Cook's three notes, drawn payable to the said firm, for the sums following, all dated 12th May, 1832, as the respective time as follows, viz.:

One, 12 months after date, for.
One, 15 months after date, for.
One, 18 months after date, for.

Edward Hinkley, Att'y for Plaintiffs. 1. The defendant's attorney insists that the contract was to be performed in Maryland, and governed by the laws of Maryland, and that the judgment must be to exempt the future acquisitions of the defendant from execution.

2. That at all events the judgment must be so entered as to exempt the defendant's person from arrest. J. Glenn, for Defendant. Judgment for the Plaintiff's upon the Case stated.

Whereupon, all and singular the premises being seen, heard, and by the court here fully understood, for that it appears to the court that the said John L. Moffat and Joseph Curtis are entitled to recover in the plea aforesaid. Therefore, it is considered by the court here, that the said John L. Moffat and Joseph Curtis recover against the said William G. Cook, as well the sum of twelve thousand dollars, current money, the damages in the declaration of the said John $6,321 03 L. Moffat and Joseph Curtis mentioned, as the

$2,107 00
2,107 00
2,107 03

sum of seventeen dollars and twenty-five cents adjudged by the court hereunto the said John L. Moffat and Joseph Curtis, on their assent, for their costs and charges by them about their suit in this behalf laid out and expended. And the said William G. Cook in mercy, etc.

It will be contended that the court cannot, consistently with law and the Constitution of the United States, give an effect to State insolvent laws greater or more extensive than that given by the decision in that case.

*The Constitution is to be construed [*299 with reference to its general as well as to its particular intents.

Memorandum. Judgment rendered in this cause on this 21st day of April, 1836, for the damages laid in the declaration and costs of The general government emanates from the suit; the said damages to be released on pay-people, and its powers are to be exercised diment of $7,335.57, with interest from 21st day of April, 1836, and cost of suit.

Memorandum. That no execution against the person of the defendant be issued in the above cause on said judgment without the leave of the court.

298*] *To review this judgment the case was brought up to this court.

The cause was argued by Mr. Mayer and Mr. Johnson for the plaintiff in error, and by Mr. Hinkley for the defendants in error.

rectly upon them and for their benefit. McCulloch v. Maryland, 4 Wheat. 316; Cohens v. Virginia, 6 Ibid. 413.

Moreover, the Constitution is an agreement or compact between each individual of the people and all the rest, as well as between each one of the States and all the others.

The States, as to their sovereign and exclusive powers, are foreign to each other, as well as to the federal government. Woodhull et al. v. Wagner, Bald. C. C. Rep. 296.

cians call a universal negative proposition, and being absolute and imperative.

1. It excludes every kind and degree of what it prohibits, whatever that be. This has been seen by the court. Sturges v. Crowninshield, 4 Wheat. 122; Green v. Biddle, 8 Ibid. 84.

be the title, provisions, or professed object of a State law, if, in its effect, it impair the obligation of a contract in the sense of the Constitution.

Mr. Mayer entered into a critical analysis of It is said there is great obscurity in the clause all the opinions which had been given by this of the Constitution (art. 1, sec. 10) which decourt on the subject of State insolvent laws, clares, among other things, that "no State shall from all which he argued, that the philosophy pass any law impairing the obligation of conof the law had never been settled; that, in con- tracts." But if we construe the language as sequence of the want of harmony in those opin-it stands, it is clear, that, forming what logiions, the whole subject ought to be again reviewed. There was a difficulty in annexing a meaning to some terms in the Constitution which were in themselves uncertain; such, for example, as the phrase, "impairing the obligation of contracts." This expression was supposed to include a prohibition to pass insol- 2. Consequently it excludes every cause, mode vent laws; and yet in Sturges v. Crowninshield, and manner, by which the thing prohibited may 4 Wheat. 122, it appeared to be conceded that be affected. Hence it is immaterial what may a State might pass such laws, operating only upon its own citizens. It was also admitted, on all hands, that the United States could pass bankrupt laws, which dissolved a contract entirely. Now, if these laws were prohibited on account of their supposed dishonesty, it was unaccountable that a power to extend them over the whole nation should have been conferred upon Congress. Certainly laws do not become less mischievous by becoming more extensive. It would seem as if bankrupt laws were not considered as impairing the obligation of contracts. In the debates of 1787, they were spoken of as mere commercial regulations, like damages upon bills of exchange. Luther Martin says that the prohibition meant to exclude tender laws, and retrospective laws. All nations have bankrupt laws, and it is not surprising that the power to make them was given to Congress, as auxiliary to the general one of regulating commerce. These State laws only stay all judicial proceedings, like statutes of limitation. It will not do to say that statutes of limitation rest on a presumption that the debt has been paid, because where they apply to land there can be no such presumption.

In support of these and similar views he cited Secret Proceedings and Debates of the Convention, Yates' Notes, 70, 71, 246, 247; 3 Madison Papers, 1442, 1443, 1448, 1480, 1549, 1552; Federalist, 80th number; Story's Conflict of Laws, secs. 312, 395, 404, 422, 438.

Mr. Hinkley, for defendants in error:

It is understood that the question raised upon the statement of facts in this case was decided in the case of Ogden v. Saunders, 12 Wheat.

213.

3. It may be admitted, that, in the absence of any bankrupt law of Congress, the States may pass insolvent or bankrupt laws, provided their effect be not extended to impair the obligation of contracts. The power granted to Congress by the Constitution, art. 1, sec. 8, "to establish uniform laws on the subject of bankruptcies throughout the United States," is permissive, not imperative. The decisions which are in accordance with this construction need not be disturbed, however difficult it may be to reconcile the exercise of the power by the States with the prohibitory clause in relation to impairing the obligation of contracts. Perhaps it can only be done in the manner in which it has been done by the decision of Justice Johnson in the case of Ogden v. Saunders, by allowing the States to legislate for their own citizens in matters exclusively within the jurisdiction of their own courts, but not for citizens of other States who have a right to the jurisdiction of the courts of the United States. The justice, policy, or humanity of insolvent or bankrupt laws is not so much a question for the courts as for the Legislatures. If the State Legislatures can constitutionally pass such laws, their own courts may be bound to administer them to all suitors within their jurisdiction. See Babcock v. Weston, 1 Gallis, C. C. R. 168.

4. A creditor may waive his constitutional rights. Consensus *vincit legem. What [*300 acts may amount to a waiver it is for the court to determine. It has been decided, that re

is said in general to govern in determining the nature, validity, and interpretation of contracts. Story's Conflict of Laws, sec. 241; The Bank of the United States v. Donally, 8 Pet. 361. And sometimes the law of the place where the contract is to be performed is said to govern.

ceiving a dividend under the insolvent law of a | Kinzie, 1 How. 316. The lex loci contractus State is evidence of a waiver. Clay v. Smith, 3 Pet. 411. Making himself a party to the proceedings under a State insolvent law in other ways may have the same effect. Bald. C. C. R. 299; Buckner v. Finley, 2 Pet. 586. But a citizen of one State, by simply becoming a party to a commercial contract with a citizen of another State, does not waive any right under the Constitution of the United States. This point is involved in the question put for decision by Justice Johnson in the case of Ogden v. Saunders, 12 Wheat. 358. If, indeed, this were construed to be a waiver, it would in effect take away the jurisdiction of the courts of the United States. What now is the meaning of the phrase "impairing the obligation of a contract?"

There is a nice discrimination to be made by courts in regard to the source of the law, as well as to the nature of the law, which ought to govern them.

were

As to the contract now under consideration, we are furnished with no law, either of New York or of Maryland, in regard to its nature, validity, or interpretation. If not prohibited it is not to be adjudged by their laws. The right of the parties to enter into the contract was not granted by either of those States. It is The word "contract" is an artificial term of a right of personal liberty which was convery extensive signification. It is collective quered by our fathers, and was inherent in the and generic, embracing a great number of in- people when the State governments dividuals, but comprehending only the essential formed, as well as when the general governproperties of each. It may be defined an agreement was established. The States of the conment, not prohibited by law, between two parties at the least, whereby each, for a sufficient consideration, promises or undertakes to do or not to do something. What one promises or gives is ordinarily the consideration for what the other promises or gives. There is a duty imposed on each party by the laws of God and by the laws of man, in civil society, to perform what is stipulated in the contract on his part to be performed. This is the obligation of the contract.

tract were silent as to the laws of the contract, and therefore the law of the former must govern it. Indeed, what is intended by the lex loci contractus would seem to be, not the territorial law, but the law of the government under whose jurisdiction the parties are, in reference to the contract. If the territorial law is silent, and the citizenship of the parties gives them a right to resort to an independent forum, the law of this forum will be the law of the contract. Jurisdiction given in consideration of percontrolled or lost by temporary domicil within the territorial surface or sphere of a subordinate jurisdiction. And this appears to have been the law of the Roman empire in the first century. For, when St. Paul was accused before Festus at Cæsarea, being a Roman citizen, he appealed to Cæsar, and his appeal was allowed. And afterwards, when Agrippa had heard his noble defense, he told Festus that he found nothing in ne man worthy of death or of bonds, and that he might have been set at Ac-liberty, if he had not appealed to Cæsar. After the appeal, neither the governor not the king could decide the cause. The jurisdiction was gone. And Paul was sent a prisoner to Rome. Residence of aliens within a State of the Union constitutes no objection to the jurisdiction of the federal court. Breedlove et al. v. Nicolet et al. 7 Pet. 413.

There may be, and usually are, two obliga-sonal attributes or qualifications is not always tions in a contract, one appertaining to each party. When one party has fulfilled his obligation, there remains only the obligation of the other party. Although the contract include a moral as well as a legal obligation, yet the legal obligation only is intended in the Constitution. The moral obligation acts upon the conscience, understanding, the free will of man, and cannot be enforced by human laws or courts of justice. It may die and revive again. It may remain and be the consideration of a new promise after the legal obligation is released by law. cording to Webster, the 'impair' is of French derivation, and signifies to make worse, to lessen the value of.

With reference to the Constitution of the United States the term "contracts" must embrace all subjects to which the judicial powers extend, whether of common law, equity, or admiralty and maritime jurisdiction.

The contract in question is one of common law jurisdiction, and must be adjudicated with reference to the rules of this jurisdiction. There are three sources of law, to one or more of which the court may look for rules to guide. They are distinguished as lex rei sitæ, lex loci contractus, and lex fori. Much depends upon a correct understanding and applicability of these laws, in any given case, as to the results to which the court may be led. 301*] *If the subject of the contract be land, the lex rei sitæ takes precedence, and the place of the contract, or the citizenship or domicil of the parties, is immaterial. All rights and titles in the subject must be governed by the law of the State in which it is situate. And the decisions of the courts of the State will be respected as to what the law is. Bronson v.

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The constitutional right of a citizen to sue in the circuit courts of the United States does not permit an act of insolvency, executed under *the authority of a State, to be a bar [*302 against a recovery upon a contract made in another State. Suydam et al. v. Broadnax, 14 Pet. 67. This case decides to what extent the jurisdiction of the United States will prevail over that of the States, and how far the laws of the States can interfere with the remedies afforded by the courts of the United States.

Neither the statutes of the States nor decisions of the State courts apply to questions arising in a court of the United States upon contracts of a commercial nature. Swift v. Tyson, 16 Peters, 1; Amis v. Smith, 16 Ibid. 303. This court, then, is not to be restrained by any State law in passing judgment upon the contract in question.

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