Actions Upon Contract

Actions Upon Contract

In Chicago & Alton R.R. v. Wiggins Ferry Co.,113 the Court indicated that it was the law under which the contract was made, not the law of the forum state, that should govern. Its utterance on the point was, however, not merely dictum, but was based on an error, namely, the false supposition that the Constitution gives “acts” the same extraterritorial operation as the Act of 1790 does “judicial records and proceedings.” Notwithstanding which, this dictum is today the basis of “the settled rule” that the defendant in a transitory action is entitled to all the benefits resulting from whatever material restrictions the statute under which plaintiff ‘s rights of action originated sets thereto, except that courts of sister states cannot be thus prevented from taking jurisdiction in such cases.114

Actions Upon Contract and the U.S. Constitution

However, the modern doctrine permits a forum state with sufficient contacts with the parties or the matter in dispute to follow its own law. In Allstate Ins. Co. v. Hague,115 the decedent was a Wisconsin resident who had died in an automobile accident within Wisconsin near the Minnesota border in the course of his daily employment commute to Wisconsin. He had three automobile insurance policies on three automobiles, each limited to $15,000. Following his death, his widow and personal representative moved to Minnesota, and she sued in that state. She sought to apply Minnesota law, under which she could “stack” or aggregate all three policies, permissible under Minnesota law but not allowed under Wisconsin law, where the insurance contracts had been made. The Court, in a divided opinion, permitted resort to Minnesota law, because of the number of contacts the state had with the matter. On the other hand, an earlier decision is in considerable conflict with Hague. There, a life insurance policy was executed in New York, on a New York insured, with a New York beneficiary. The insured died in New York, and his beneficiary moved to Georgia and sued to recover on the policy. The insurance company defended on the ground that the insured, in the application for the policy, had made materially false statements that rendered it void under New York law. The defense was good under New York law, impermissible under Georgia law, and Georgia’s decision to apply its own law was overturned, the Court stressing the surprise to the parties of the resort to the law of another state and the absence of any occurrence in Georgia to which its law could apply.116

Actions Upon Contract: Developments

Resources

See Also

References

This text about Actions Upon Contract is based on “The Constitution of the United States of America: Analysis and Interpretation”, published by the U.S. Government Printing Office.

Notes

[Footnote 1] 119 U.S. 615 (1887).

[Footnote 2] Northern Pacific R.R. v. Babcock, 154 U.S. 190 (1894); Atchison, T. & S.F. Ry. v. Sowers, 213 U.S. 55, 67 (1909).

[Footnote 3] 449 U.S. 302 (1981). See also Clay v. Sun Ins. Office, 377 U.S. 179 (1964).

[Footnote 4] John Hancock Mut. Life Ins. Co. v. Yates, 299 U.S. 178 (1936).