The course of the arguments at the bar, leads us to enquire—
First — Was the plaintiff foreclosed by the judgment on demurrer to his second plea, from introducing evidence *22to show that the transaction with H. M. Andrews & Co. was usurious, according to the law of New York?
Second — In determinining the question of usury, in the negotiation of the bill, does the law of Alabama, or New York, furnish the rule of decision?
Third — Was the evidence offered to the jury, by the plaintiff in error, to establish usury, — admissible, as against the defendant?
Fourth — Was the law read from the revised statutes of New York, at the instance of the defendant in error, legally admitted in evidence?
First — The second plea, it may be remarked, is objectionable in itself, and does not present, by direct averment, the legal question which the defendant in error proposed to raise. True, it alleges the bill to have been made in New York, but it does not aver that the loan which formed its consideration, was made, or agreed for, there. Resides, the defence of usury, as it avoids the contract, is clearly allowable under the plea of non-as-sumpsit; for which cause, however, a special plea, disclosing with particularity the facts proposed to be proved in the defence, would not be bad, as with us special demurrers are not tolerated.
So that, without passing upon the merits of the de-fence, the Circuit court may have adjudged the second plea (for some one, or all the causes we have indicated,) to be bad.
But, even conceding the plea to have tendered the precise defence, which the plaintiff proposed to make by his evidence, and the judgment on demurrer, did not, of itself, authorise the rejection of the evidence, if it were *23legally admissible. This point was directly presented, in the case of Cummins vs. Gray, (4 Stew. & Por. R. 403.) In that case, a demurrer to the declaration had been overfilled : at a subsequent term, the plaintiff demurred to the defendant’s pleas, and though the court believed the pleas to be bad, yet, as the declaration was considered defective, the demurrer was visited upon it, and a judgment rendered against the plaintiff.
In this court, it was assigned for error, that the Cir*-cuit court erred in sustaining the plaintiff’s demurrer to his declaration, because the same court, at a previous term, had overruled a demurrer at the instance of the defendant. The court considered the assignment not well taken, the objection to the declaration on the plaintiff’s demurrer, being presented in a different form, than when demurred to by the defendant.
The court proceed further to remark, that “ it may so happen, where a special plea, containing matter which would be good under the general issue, has been overruled on demurrer, and the defendant offers evidence of the same defence under the general issue; or it may be so, where a motion in arrest of judgment is made, on the same objection to the declaration, for which a demurrer has been overruled ; and, on the same principle, the supposed insufficiency of the declaration, was subject to an independent consideration on the demurrer to the pleas.” The judgment on demurrer, then, interposed no objection to the introduction of the facts disclosed in the plea, as evidence under the general issue. The case cited is decisive of the question, and reason fully warrants the conclusion.
*24Second — The solution of this question renders necessary an examination, to some extent, of the doctrine in regard to the lex loci contractus. In considering this branch of the law, we are sensible, that we undertake a task of no ordinary difficulty — for no legal topic is more embarrassed by refined distinctions, and the conflicting decisions and dicta with which the books, both of the civil and common law, abound. This branch of jurisprudence is far from being matured, but owing to the increase of litigation, and of consequence, its variety throughout the commercial world, it may be considered in a state of rapid advancement towards the establishment of rules and principles by which the application of foreign laws, may, in all cases, be readily determined. Influenced by this state of things, we propose little more than merely to review the authorities within our reach, and state our conclusion on the point before us, with reference to the facts upon the record, instead of making the general enquiry, how far contracts are governed the by lex loci celebratus contractus.
The general proposition, that the laws of a country have no binding force extra territorium, is certainly true; their authority is admitted abroad, not ex proprio vigore, but ex comitate; or, as Huberus expresses it, quatenus sine prcejudicio indidgentum frieri potest — (Story’s Confl. of L. 37; 2 Kent’s Com. 457; Blanchard vs. Russell, 13 Mass. Rep. 6.)
Mr. Justice Story considers that the phrase, “ comity of nations,” is most appropriate, as indicating the foundation and extent of the obligation of the laws of one nation within the territories of another. The extra-ter*25ritorial influence of laws, is derived from the voluntary consent of the nation within which its application is proposed ; and they are tacitly adopted jure gentium, in the absence of any positive rule, affirming, denying, or restraining their operation; unless they are repugnant to local policy or prejudicial to local interests. It is not the comity of courts, but the comity of nations, which au-thorises the administration of foreign laws within the limits of another sovereignty — and subject to the limita-* tions we have mentioned, the courts can exercise no discretion on the subject.
The principle upon which one State recognises and applies the laws of another, relative to contracts, results from the courtesy, comity, or mutual convenience of nations, between which commerce has introduced dealings. In fact, the necessary intercourse of mankind, requires that the acts of parties valid where done, should be re-cognised in other countries, provided they be not contrary to good morals, or repugnant to the policy or positive institutions of the State — (2 Kent’s Com. 454; 13 Mass. R. 6; 4 Cowen’s R. 511, et post in note, and case cited j Story’s Con. of L. 232 to 248; Goodman vs. Munks, 8 Porter’s R. 84, and cases there cited.)
And we understand the doctrine to be settled, that personal contracts are to have the same validity, interpretation and effect, in every other country, which they have in the country where they were made, or are to be performed. Parties are presumed to be conversant of the laws of the country in reference to which they contract, and to stipulate with regard to them; and it is a maxim, that locus contractus regil actum, unless the parties *26have manifested a contrary intention — (Bank of the U. S. vs. Donally, 8 Peters’ R. 361; Watson vs. Orr, 3 Dev. R. 161; 2 Kent’s Com. 458.)
In regard to the lex loci, when the contract is- silent as to the place of performance, there is but little difficulty in determining what law is to govern-; but when its performance is contemplated in another country, questions the most embarrassing arise — (2 Kent’s Com. 455, 459; Story’s Con. of L. 9, 10, 25, 29, 303, 307; 4 Cow. R. 510, note a.) In stating the general rule, as applicable to the latter description of contracts, there is but little difference in the books,
Mr. Chancellor Kent says, “ If a contract be made under one government, and is to be performed under' another, and the parties have in view the laws of such other country, in reference to the execution of the contract, the general rule is, that the contract, in respect to its construction and force, is to be governed by the law of the country or State, in which it is to be executed” — (2 Kent’s Com. 459.)
Mr. Justice Story expresses himself on the subject thus: “ Where the contract is either expressly or tacitly to be performed in any other place, there, the general rule is in conformity to the presumed intention of the parties,— that the contract, as to its validity, nature, obligation and interpretation, is to be governed by the law of the place of performance” — (Story’s Con. of L. 333.)
In Blanchard vs. Russell, (13 Mass. R. 4,) in an elaborate examination of the lex loci, the court remark, “ that it is now a principle generally received, that contracts are to be construed and interpreted, according to the laws *27of the State in which they are made, unless from their tenor it is perceived that they were entered into with a view to the laws of some other State — (See further, Van Reimsdyke vs. Kane, 1 Gallison’s R. 371; Thompson vs. Ketchan, 8 Johns. R. 189; Fanning vs. Consequa, 17 Johns. R. 511; Harrison vs. Sterry, 5 Cranch’s R. 289; Slocum vs. Pomeroy, 6 Cranch’s R. 221; Smith vs. Mead, 3 Conn. R. 253; Toureo vs. Cassia, 1 Nott & McC. R. 173; Ball vs. Gaillard, 1 Nott & McC. Rep. 67; Medbury vs. Hopkins, 3 Conn. Rep. 472; Thompson vs. Ketcham, 4 Johns. R. 288, and note b, and cases there cited; Harman vs. Harman, 1 Baldwin’s R. 130, cited from Amer. Jurist, April, 1838, p. 178; De Sobry vs. Terrier, 2 Har. & Johns. R. 220 ; 2 Fonb. Eq. 443, and note t; Comyn on Usury, 8, 9, 152, 153 ; Law Lib. vol. 5; 3 Dall. Rep. 374, note; Consequa vs. Fanning et al, 3 Johns. Ch. R. 602, 610; Conframp et al. vs. Bunel, 4 Dall. K. 419.)
Having taken this brief view of the general doctrine of the lex loci, we proceed to a more particular examination of the question before us. It is clearly inferable, from what has been already said, that where parties enter into a contract, without any stipulation for interest, but upon which, on default of prompt payment, interest accrues, its rate must be admeasured by the scale prescribed by the laws of the country where the contract was made; unless the parties contracted in reference to another jurisdiction — in which case, the law of the place of payment .will ascertain the quantum of interest. This proposition is conceded by the counsel for both parties; but the counsel for the plaintiff insists, that where the 'parties themselves have stipulated a particular rate of *28interest, the lex loci celebratus must determine the legality of the stipulation — that the contract, if invalid where made, is void in every other country in which it is sought to be enforced.
To sustain this argument, we have been referred to the case of Depau vs. Humphreys, (8 Martin’s Rep. 27, 28.) In that case, the very point came directly in judgment, and is most elaborately and learnedly considered, with a review of many authorities, deduced both from the civil and common law. The learned judge who pronounced the opinion of the court, after remarking that the legal rate of interest, is the measure of damages in obligations to pay money — that the Roman law did not contemplate interest as a profit, at the time of the contract, but only as a consequence resulting from a delay of payment; and that therefore it was regulated,— by the lex locus desiinatce solutionis, proceeds as follows: “ But in a loan of money, nothing is more common, in countries where the parties are not restrained by law to one rate of interest, to stipulate a particular one, (by their convention,) wrilhin the scope of which the law allows ; and this interest is called conventional, by contradistinction from the legal interest ex mora.
“ In such a case as the object of the conventional interest, is to afford to the lender a compensation for the profit he foregoes, in yielding the use of his money to the borrower, it should seem that the circumstance of the place of payment, differing from that in which the lender parts with his money, ought to have no influence in the fixation of the rate of interest.” The learned judge then refers to previous decisions, in which that *29court had decided, First — That an instrument, as to its form, and the formalities attending its execution, the mode of construing it, the meaning to be attached to the expressions by which, the parties have contracted, and the nature and validity of the contract, was subject to the laws of the place where it was made. Second— That the laws of the place where the contract is to be executed, must regulate its performance, continues his opinion thus: “ If these principles be correct, there must be two loci contractus’ to be considered in law, in a contract which is to be performed in a different place than that in which it is entered into ; locus celebratus contrac-tus; locus solutionis; in many an instrument, more than two places as loci contractus are to be considered. The holder of a protested bill of exchange has his remedy against the acceptor, according to the laws of the place on which the bill is drawn; against the drawer, according to the law of the place in which the bill was drawn; and when there are several indorsers, he may have his remedy against each of them according to the law of the place where he indorsed. Reason points out, in every act, the place in which it is to take place, is to be considered in ascertaining its validity and effect.” The learned judge closes his argument with the conclusion, that in a note executed in Louisiana, on a loan of money made there, the creditor may stipulate for the legal rate of conventional interest authorised by the law of that State, although such a rate be disallowed in the place in which payment is to be made.
In treating of the question before us, Mr. Chancellor Kent employs this language: “If interest be not stipula*30ted in the contract, and the money be payable at a given time, in a different territory, and there be a default in payment, the law of the place of payment regulates the allowance of interest, for the default arises there. The drawer may consequently be liable to one rate of damages, and the indorser to another, if he indorses at a different place, for every indorsement is a new contract. If, however, the rate of interest be specified in the contract, and it be according to the law of the place where the contract was made, though the rate be higher than is lawful by the law of the place where payment was to be made, the specified rate of interest at the place of the contract has been allowed by the courts of justice in that place, for that is part of the substance of the contract. The general doctriné is, that the law of the place where the contract is made, is to determine the rate of interest, when the contrast specifically gives interest; and this will be the case, though the loan be secured by a mortgage on lands in another State, unless there be circumstances to show, that the parties had in view the law 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” — (2 Kent’s Com. 460.)
Mr. Justice Story, in an examination of the lex loci, in respect to foreign contracts, thinks that Mr. Chancellor Kent, in the citation we have made from his Commentaries, has correctly laid down the modern doctrine, and is fully borne out by the authorities — (Story’s Confl. of L. 253.) But the learned judge is of opinion, that the case of Depau vs. Humphreys, is not a correct ascertainment of tile law,, even upon the authority of foreign jurists; *31and after briefly noticing the ease of Fanning vs. .Conse-qua, (17 Johns. R. 511,) thus introduces the Louisiana decision: “Another case has arisen of a very different character. A note was given in New Orleans, payable in New York, for a large sum, bearing an interest of ten per cent., being, the legal interest of Louisiana, the New York legal interest being seven per cent. only. The question was, whether the note was tainted with usury, and therefore void, as it would be if made in New York. The Supreme court of Louisiana decided, that it was not usurious, and that the interest might be stipulated for, according to the law of Louisiana, or that of New York. The court seem to have founded their judgment upon the ground, that in the sense of the general rule, there are, or may be two places of contract; that in which it is made ; and that in which it is to be performed ; locus ubi contractus celebratus esl; locus destinalm so-lutionis; and therefore, if the law of both places is not violated, the contract for interest will be valid.”
The le'arned judge, in supposing that the Supreme court of Louisiana considered it necessary to the defence of usury, that both the lex loci celebratus and th'e lex loci solutionis should be violated, fell into an error. We have examined the opinion most carefully, and according to> our understanding, the court intended to say, and have, in effect, so said, that there is one locus contractus, so far as it relates to the mode of construeing them, (contracts) the meaning to be attached to the expressions by which the parties' bound themselves, and the nature and validity of the engagement.
There is another locus contractus, as it respects “ the *32performance,” which “ must he according to the law of the place, where it is to take place.” That these two form the loci contractus, which are to be considered in law, in a contract which is to be performed at a different place than that at which it is entered into; and that every question (depending upon its character) relating to such a contract, must be referred to the law of the one place or the other place, for solution. Such is the sense (and none other, as we understand it,) in which it was said by the Supreme court of Louisiana, that there were two loci contractus. We gather further from the opinion, that usury entered into the validity of contracts; and was to be ascertained in that case, by the law of Louisiana— that if the contract was free from its taint, according to the law of that State, though it reserved a higher rate of interest than the law of New York authorised, yet it was valid every where; but if usurious in Louisiana, it was void in every other State, without regard to their local regulations.
Mr. Justice Story, in the section immediately following that we have quoted, admits that there may be two- loci contractus in some sense. “ There is no doubt,” says he, “that the phrase lei; loci contractus may have a, double meaning or aspect, and that it may indifferently indicate the place, where the contract is actually made, or that where it is virtually made according to the intent of the parties, that is the place of performance. Everard, as well as other distinguished jurists,' refers to this distinc-. tion. Voet places it in a strong light” — (Story’s Confl. of L. 248; see also 195.) The learned author then examines the works of some of the foreign jurists on the *33subject, and expresses the opinion, that they do not sus* tain the-case of Depau vs. Humphreys.
We have already seen, that Mr. Justice Story affirms the correctness of the rule, in regard to conventional'interest, as stated by Mr. Chancellor Kent, but it does not appear (as argued for the defendant in error,) that the latter approves the criticism of the former, upon the Louisiana decision. Ail that is said in relation to it, is found in a note, in these words: “The decision, in this case* is accompanied with a full discussion of the authorities in the English and American Law, and of the opinions of the European continental civilians. The law of this case has been critically examined by Mr. Justice Story, (Com. on the Confl. of L. 248, 254,) and he does not think that the foreign jurists bear-out the case” — (Note a 2, Kent’s Com. 460.)
We have noticed thus at length, the arguments and conclusions to be found in the Conflict of Laws, because they were much relied on for the defendant, and for the additional reason, that we desired lo place them in juxia■* position with the opinion in Depau vs. Humphreys, that it might be seen the learned author did not differ so widely from the court in that case, as he himself supposed.
We now dismiss the authorities, to consider, for a moment, the transaction in New York, in reference to the reason and nature of the thing. The evidence upon the record informs us, that the bill was drawn, indorsed and accepted in New York, to enable the drawer to raise money — that its consideration was a loan of money made to the plaintiff in eiror by II. M. Andrews &Co.-— *34and that the loan was agreed for, and the money paid to the plaintiff in the city and State of New York, about the eleventh January, eighteen hunded and thirty-seven.
Even conceding that the stipulated place of payment, shall determine the validity of a contract, it is difficult to conceive how the law of that place can operate upon a bill of exchange, so long as it remains in the hands of the party for whose accommodation it was made — before he has actually negotiated it. Until then, no legal liability is incurred by the parties to it, but it is only*when put forth into the world, that it becomes an effective security for money. So long, then, as the bill in question remained in the hands of the drawer, it was not an operative contract. Messrs. Andrews & Co. became its proprietors, by lending to the plaintiff a sum greatly below its nominal amount, and in this it is alleged the usury consists. The payment of the money under the agreement for a loan, and the transfer of the bill, must be regarded as simultaneous acts, the former being a consideration for the latter ; so that if the one be illegal, the other imposed no obligation in law. This, to us, would seem to be the deduction of reason — and though perhaps we might rest our opinion opon higher and less disputable ground, we are prepared to affirm it to be law.
The purchase of the bill was complete in New York; - — the interest upon the loan was there paid, or retained, which is the same thing, so that from the proof in the record, there is little pretence for saying that the plaintiff, or H. M. Andrews '& Co., had in view the law of Alabama, in respect to the interest charged upon the loan. *35Instead of there being “ circumstances to show that the parties had in view the laws of the latter place, in respect to interest,” the reverse is rather inferable. The bill did not contemplate the payment of interest upon its face, and it was only in default of payment at maturity, that interest ex mora, or more properly ex lege, could accrue. This, it is true, would be regulated by the law of this State; because it was here that the default must have happened. This view is fully sustained by the rule cited from 2 Kent's Commentaries, 460, which we have shown has the sanction of the learned, author of the Conflict Laws, and is decisive of the question, so far as it relates to the admissibility of the evidence rejected by the Circuit court.
The bill expressing on its face the place of payment to be in Alabama, is not conclusive to show that the parties contracted in reference to the interest prescribed by the law of this State. In the absence of proof aliunde, such would be its effect, but extrinsic proof is clearly admissible to explain the intention of the parties. Reason, and the analogies of the law, authorize it. And in Thompson vs. Powles, (2 Simons’ R. 194,) the Tice Chancellor shows, that it is permissible to look beyond the contract itself. If the law were otherwise, the statute against usury in force, in the locus celebratus contractus¡ might be avoided with impunity, at pleasure.
In citing, with approbation, the rule as laid down by the learned commentator on American law, we do not desire to be understood as either repudiating or approving the case of Depau vs. Humphreys. We regard the authority of both as adverse to the defendants in error, *36but prefer taking the rule in the Commentaries as ouf guide: because we can do so without committing ourselves upon the general question, whether the lex loci ce-Ubratus, or the lex loci, solutionis, Will decide the validity of the contract, where the place at which performance iá Stipulated, is different from that where it was made.
We decline expressing any opinion upon the question, how far the difference of exchange between New York* and Alabama, in favor of the former, can countervail the defence of usury, as interposed by the plaintiff in error, inasmuch as it is not necessary to a decision of the case by this court, and because a question precisely analogous (it is said) to that presented by the record, is destined soon to undergo an examination before the Supreme Court of the United States.*
Third — This question was directly raised in Hacltley VS. Sprague, (10 Wend. R. 113.) That was an action by the indorsee of a promissory note, against the maker, and it was objected, that under the latter part of the fifth section of the interest act, as contained in the NevV York revised statutes, the defence of usury was not al*37lowable. But the court thought otherwise, and thus express their opinion on the point: “ It is presumed that the intention of the Legislature was to protect the innocent holder for a valuable consideration, who had received the note in the usual course of trade, before it was due. The law merchant goes no farther in any case,-when the maker has a legal or equitable defence, as against the payee; and where the Legislature declare a note void, they surely intend to extend the same defence to the maker, which he would have if he had paid the note to the payee. The true construction of this section is, that usurious paper shall not be avoided in the hands of an innocent holder for value paid, when received in the usual course of business, — that is, before it arrives at maturity. If it is transferred afterwards, the holder takes it as he does all other negotiable paper, subject to any defence, which the maker has, as against the payee.”
Thus, we discover that it is incumbent upon an indor-see, if he would prevent usury from being set up against him, to show that he became the innocent holder of the paper, for a valuable consideration, before its maturity. Nothing of this kind seems to have been shown or attempted by the defendant in error.
Fourth — The statute of New York, which was read to the jury by the defendant, was contained in a book, printed and published under the authority of that State. According to the law, as admitted in this State, the act of Congress of May, seventeen hundred and ninety, has not been considered as excluding all other modes of authenticating the acts of the Legislature of a sister State, but the statute book has been received as evidence of them, *38where the book appeared to have been published under the sanction and direction of the public — (Huff vs. Campbell, 1 Stew. R. 543; Cox & Cox vs. Robinson, 2 Stew. & Por. R. 94.) Such evidence has also been admitted in some of the other States — (Thompson vs. Musser, 1 Dallas’ R. 462; Biddis vs. James, 6 Binney, 321; State vs. Stade, 1 Chip. R. 303; Young vs. The Bank of Alexandria, 4 Cranch, 388.) .
There was, then, no error in admitting the statute of New York to be read to the jury — but for the rejection of the evidence offered by the plaintiff in error, the judgment of the Circuit court is reversed, and the case remanded.
Note. — The case alluded to is Andrews vs. Pond, et al. IS Peters’ Rep. —. This case sustains our opinion on the main question, viz., that the law of New York is the criterion by which it is to be ascertained, whether the contract is usurious. The court also determine, that on a loan of money in New York, to be repaid in Alabama, it is allowable for the lender to reserve the market rate of exchange, in addition to legal interest, though it may exceed the cost of transportation of specie, insurance, &c., if the reservation be made bona fide, and hot with intent to evade the law against usury