The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 47
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GEORGE V. OSCAR SMITH & SONS CO.
pany and Crawford, in so far as the loan of money was concerned.
It must be held that the law of the state of Mississippi did not intend
to affect such transactions, and it must be further held that, if it did
so intend, the intention would not be effective.
What Law to Govern.
In considering whether the validity and effect of the contract is to be
determined by the law of the state of Mississippi or by the law of the
state of Pennsylvania, an effort will be made to state the principles
necessary to be considered in cases of this character.
When persons within the territory of a state or country undertake
to mutually bind themselves, the general rule is that their legal relations
are to be determined by the law of that jurisdiction. A contract
is ordinarily entered into, and the consideration upon which it is based
passes, where it is to be performed. A contract, however, may be
made in one state or country, be based upon a consideration passed
in another, and be performable in a third; or either of these elements
may concur in situs with another, and the third have a different situs.
Sometimes there will be other elements, referable to still other places.
When there is an absence of unity in the places to which the several
elements which enter into a contract or into its performance are ref-
erable, and there is a difference in the laws which govern the places
to which the several elements are referable, determination of the va-
lidity of the contract presents difficulties in the solution of which the
commentaries and decisions give little help.
Probably the nearest approach to a general proposition that may
safely be made is this: The validity of a contract will be determined
by the law with reference to which it is made. The accuracy of this
proposition is to be determined by the statement hereinafter to be made
as to its meaning. Moreover, the proposition itself is too general in
its character to be of any particular value in the practical application
of the law. Perhaps this further proposition will be helpful: The law
with reference to which a contract is made is the law of that country
in which the more important elements entering into the contract arc
its performance concur as to situs. The present inquiry is concerned
alone with contracts charged to be usurious, and has special reference
to such contracts of this character as are represented by promises to
pay, based upon a consideration already received.
As to contracts of this character, a determination of the law with
reference to which they are made may, and in this case will, require
consideration of the following elements: (1) The law of the place
where the contract is made, under which will be discussed (a) the law
generally; (b) the residence and citizenship of the parties, and where
they were when the contract was made; (c) the place and manner of
the negotiations and of the final consummation of the contract. (2)
The consideration and the place where it passed or was to become
effective. (3) The law of the place where the contract is to be per-
formed. (4) The law of the place where the land mortgaged to se-
cure the debt is situate. (5) The law of the place where the money
borrowed is to be used. (6) The intention of the parties as to the ap-
plicable law. (7) The law of the forum.
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/62/: accessed April 21, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.