it is evident that it cannot operate where one creditor has fairly obtained, by legal diligence, a specific lien and right of preference, under the laws of the country where the property is situate.1 (a)

1 Kent's Comment. on American Law, vol. ii. pp. 404-408, 5th ed.

(a) ["In this country there is some diversity of opinion among the State courts, whether a bankrupt law, in regard to personal property, has an extraterritorial operation. That it has such operation is a doctrine which seems to be well settled in England by numerous decisions.

"It is held in England, that an assignment of personal property under the bankrupt law of a foreign country passes all such property and debts owing in England; that an attachment of such property by an English creditor, with or without notice, after such an assignment, is invalid. And the doctrine is there established, that an assignment under the English bankrupt law transfers the personal effects of the bankrupt in foreign countries. But an attachment by a foreign creditor, not subject to British laws, under the local laws of a foreign country, is held valid. The principle on which this doctrine rests is, that the personal estate is held as situate in that country where the bankrupt has his domicile. "A statutable conveyance of property cannot strictly operate beyond the local jurisdiction. Any effect which may be given to it beyond this does not depend upon international law, but the principle of comity; and national comity does not require any government to give effect to such assignment, when it shall impair the remedies or lessen the securities of its own citizens. And this is the prevailing doctrine in this country. A proceeding in rem against the property of a foreign bankrupt, under our local laws, may be maintained by creditors, notwithstanding the foreign assignment.

“But it is an admitted principle in all countries where the common law prevails, whatever views may be entertained with regard to personal property, that real estate can be conveyed only under the territorial law.

"This doctrine has been uniformly recognized by the courts of the United States, and by the courts of the respective States. The form of conveyance adopted by each State for the transfer of real property must be observed. This is a regulation which belongs to the local sovereignty.

"As, under the Constitution, Congress exercised an exclusive jurisdiction over the subject of bankruptcy; the same rule of procedure extended throughout the Union. But the act of Congress could have no extraterritorial effect. Texas was an independent republic at the time of the decree in bankruptcy, and consequently no claim under it, even as regards personal property in that republic, could be made, except on the ground of comity. And on our own principles this could not be done, to the injury of local creditors.

"It is believed that no sovereignty has at any time assumed the power, by legislation or otherwise, to regulate the distribution or conveyance of real estate in a foreign government. There is no pretence that this government, through the agency of a bankrupt law, could subject the real property in Texas, or in any other foreign government, to the payment of debts. This can only be done by the laws of the sovereignty where such property may be situated." Howard's Rep. vol. xi. p. 44, Oakley v. Bennett.]

19. Extent of the

judicial power over foreigners residing within the

territory.

III. The judicial power of every State may be extended to all controversies respecting personal rights and contracts, or injuries to the person or property, when the party resides within the territory, wherever the cause of action may have originated.

This general principle is entirely independent of the rule of decision which is to govern the tribunal. The rule of decision may be the law of the country where the judge is sitting, or it may be the law of a foreign State in cases where it applies; but that does not affect the question of jurisdiction, which depends, or may be made to depend, exclusively upon the residence of the party.

Law of England and Ame

Depends The operation of the general rule of international upon muni- law, as to civil jurisdiction, extending to all persons cipal regulations. who owe even a temporary allegiance to the State, may be limited by the positive institutions of any particular country. It is the duty, as well as the right, of every nation to administer justice to its own citizens; but there is no uniform and constant practice of nations, as to taking cognizance of controversies between foreigners. It may be assumed or declined, at the discretion of each State, guided by such motives as may influence its juridical policy. All real and possessory actions may be brought, and indeed must be brought, in the place where the property lies; but the law of England, and of other countries where the English common law forms the basis of the local jurisprudence, considers all personal actions, whether arising ex delicto or ex contraclu, as transitory; and permits them to be brought in the domestic forum, whoever may be the parties, and wherever the cause of action may originate. This rule is supported by a legal fiction, which supposes the injury to have been inflicted, or the contract to have been made, within the local jurisdiction. In the countries which have modelled their municipal jurisprudence upon the Roman civil law, the maxim of that code, actor sequitur forum rei, is generally followed, and personal actions must therefore be brought in the tribunals of the place where the defendant has acquired a fixed domicile.

rica.

French law.

By the law of France, foreigners who have established their domicile in the country by special license (autorisation) of the king, are entitled to all civil rights, and, among

others, to that of suing in the local tribunals as French subjects. Under other circumstances, these tribunals have jurisdiction where foreigners are parties in the following cases only:

1. Where the contract is made in France, or elsewhere, between foreigners and French subjects.

2. In commercial matters, on all contracts made in France, with whomsoever made, where the parties have elected a domicile, in which they are liable to be sued, either by the express terms of the contract, or by necessary implication resulting from its nature.

3. Where foreigners voluntarily submit their controversies to the decision of the French tribunals, by waiving a plea to the jurisdiction.

In all other cases, where foreigners not domiciled in France by special license of the king are concerned, the French tribunals decline jurisdiction, even when the contract is made in France.1

A late excellent writer on private international law considers this jurisprudence, which deprives a foreigner, not domiciled in France, of the faculty of bringing a suit in the French tribunals against another foreigner, as inconsistent with the European law of nations. The Roman law had recognized the principle, that all contracts the most usual among men arise from the law of nations, ex jure gentium; in other words, these contracts are valid, whether made between foreigners, or between foreigners and citizens, or between citizens of the same State. This principle has been incorporated into the modern law of nations, which recognizes the right of foreigners to contract within the territorial limits of another State. This right necessarily draws after it the authority of the local tribunals to enforce the contracts thus made, whether the suit is brought by foreigners or by citizens.2

The practice which prevails in some countries, of proceeding against absent parties, who are not only foreigners, but have not

1 Code Civil, art. 13, 14, 15. Code de Commerce, art. 631. Discussions sur le Code Civil, tom. i. p. 48. Pothier, Procédure Civile, partie i. ch. 1, p. 2. Valin, sur l'Ord. de la Marine, tom. i. pp. 113, 253, 254. Pardessus, Droit Commercial, Pt. VI. tit. 7, ch. 1, § 1.

Fœlix, Droit International Privé, §§ 122, 123.

acquired a domicile within the territory, by means of some formal public notice, like that of the viis et modis of the Roman civil law, without actual personal notice of the suit, cannot be reconciled with the principles of international justice. So far, indeed, as it merely affects the specific property of the absent debtor within the territory, attaching it for the benefit of a particular creditor, who is thus permitted to gain a preference by superior diligence, or for the general benefit of all the creditors who come in within a certain fixed period, and claim the benefit of a ratable distribution, such a practice may be tolerated; and in the administration of international bankrupt law it is frequently allowed to give a preference to the attaching creditor, against the law of what is termed the locus concursus creditorum, which is the place of the debtor's domicile.

20. Dis

tween the

sion and

rule of pro

ceeding, in cases of contract.

Where the tribunal has jurisdiction, the rule of decitinction be- sion is the law applicable to the case, whether it be the rule of deci- municipal or a foreign code; but the rule of proceeding is generally determined by the lex fori of the place where the suit is pending. (a) But it is not always easy to distinguish the rule of decision from the rule of proceeding. It may, however, be stated in general, that whatever belongs to the obligation of the contract is regulated by the lex domicilii, or the lex loci contractus, and whatever belongs to the remedy for enforcing the contract is regulated by the lex fori.

If the tribunal is called upon to apply to the case the law of the country where it sits, as between persons domiciled in that country, no difficulty can possibly arise. As the obligation of the contract and the remedy to enforce it are both derived from the municipal law, the rule of decision and the rule of proceeding must be sought in the same code. In other cases, it is necessary to distinguish with accuracy between the obligation and the remedy.

The obligation of the contract, then, may be said to consist of the following parts:

1. The personal capacity of the parties to contract.

(a) [Including the statutes of limitations, which are those of the country where the suit is brought, and not those of the lex loci contractus. Howard's Rep. vol. ix. p. 407, Townsend v. Jamison.]

2. The will of the parties expressed, as to the terms and conditions of the contract.

3. The external form of the contract.

The personal capacity of parties to contract depends upon. those personal qualities which are annexed to their civil condition, by the municipal law of their own State, and which travel with them wherever they go, and attach to them in whatever foreign country they are temporarily resident. Such are the privileges and disabilities conferred by the lex domicilii in respect to majority and minority, marriage and divorce, sanity or lunacy, and which determine the capacity or incapacity of parties to contract, independently of the law of the place where the contract is made, or that of the place where it is sought to be enforced.

It is only those universal personal qualities, which the laws of all civilized nations concur in considering as essentially affecting the capacity to contract, which are exclusively regulated by the lex domicilii, and not those particular prohibitions or disabilities, which are arbitrary in their nature and founded upon local policy; such as the prohibition, in some countries, of noblemen and ecclesiastics from engaging in trade and forming commercial contracts. The qualities of a major or minor, of a married or single woman, &c., are universal personal qualities, which, with all the incidents belonging to them, are ascertained by the lex domicilii, but which are also everywhere recognized as forming essential ingredients in the capacity to contract.1

How far bankruptcy ought to be considered as a pri- Bankvilege or disability of this nature, and thus be restricted ruptcy. in its operation to the territory of that State under whose bankrupt code the proceedings take place, is, as already stated, a question of difficulty, in respect to which no constant and uniform usage prevails among nations. Supposing the bankrupt code of any country to form a part of the obligation of every contract made in that country with its citizens, and that every such contract is subject to the implied condition, that the debtor may be discharged from his obligation in the manner prescribed by the bankrupt laws, it would seem, on principle, that a certifi

1 Pardessus, Droit Commercial, Pt. VI. tit. 7 ch. 2, § 1.