This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Questions of the negotiability of a contract are determined by the law of the place where the contract is made if there to be performed.1 If to be performed in a different jurisdiction from that where made, the law of the place of performance controls.2 Upon this question there is, however, a divergence of authority. Some courts hold that the question of negotiability is determined by the law of the place where the contract is made.3 The law of the place of performance controls as to what constitutes a bona fide holder.4 Thus in New Hampshire the fact that one takes under circumstances that would lead a careful and prudent man to suspect that the note was invalid does not necessarily prevent him from being a bona fide holder.5 In Vermont one who takes under such circumstances cannot be a bona fide holder.6 A note was given in New Hampshire, payable in Vermont; and suit was brought thereon in New Hampshire. Vermont law was held to control as to whether the indorsee was a bona fide holder or not.7 The law of the place of performance controls as to the number of days of grace,8 whether, if the last day of grace falls on Sunday the note is payable on Saturday or Monday,9 and what notice should be given.10 The liability of an indorser of a (This note was dated in Wisconsin, but executed, delivered and payable in promissory note is determined by the law of the place where such contract is made, as long as the parties are not shown to have intended a negotiation and delivery of such note in another state after indorsement.11 Hence, even if a note is executed and payable in another state, a contract of indorsement is controlled by the law of the place where made.12
1 Evans v. Anderson, 78 111. 558; Strawberry Point Bank v. Lee, 117 Mich. 122; 75 N. W. 444; Clark v. Porter, 90 Mo. App. 143. (Made in the Indian Territory, where Arkansas law is in force, payable in Arkansas.)
2 Brabston v. Gibson, 9 How. (U. S.) 263; Shoe, etc., Bank v. Wood, 142 Mass. 563; 8 N. E. 753; Barger v. Farnham, 130 Mich. 487; 90 N. W. 281.
3 Stevens v. Gregg, 89 Ky. 461; 12 S. W. 775; Woods v. Ridley, 11 Humph. (Tenn.) 194.
4 Webster v. Machine Co., 54 Conn. 394; 8 Atl. 482; Woodruff v. Hill. 116 Mass. 310; Limerick National
Bank v. Howard, 71 N. H. 13; 93 Am. St. Rep. 489; 51 Atl. 641. 5 Green v. Bickford, 60 N. H. 159.
6 Limerick National Bank v. Adams, 70 Vt. 132; 40 Atl. 166.
7 Limerick National Bank v. Howard, 71 N. H. 13; 93 Am. St. Rep. 489; 51 Atl. 641.
8 Goddin v. Shipley, 7 B. Mon. (Ky.) 575; Blodgett v. Durgin, 32 Vt. 361; Second National Bank v. Smith, 118 Wis. 18; 94 N. W. 664.
9 Stebbins v. Leowolf, 3 Cush. (Mass.) 137.
10 Second National Bank v. Smith, 118 Wis. 18; 94 N. W. 664.