James Baxter v. Solomon Willey, 9 Vt. 276

The opinion of the court was delivered by Redeield, J. The contract here sued was made within the province of Lower Canada, and was there to have been performed. No principle is better established, perhaps, than that the nature, construction, validity, performance, release and discharge of a contract is to be determined by the lex loci contractus, unless the contract is made with reference to performance in another place, in which case those incidents will be subject to the law of the place of performance.

The provinces of Canada, it is well known, although dependencies of the British Crown, are not governed by British laws, so far as civil proceedings are concerned. It was one of the conditions of the surrender of those provinces by the French, that they should be permitted to enjoy, in perpetuity, French law, unless repealed or modified by their own legislature. This has not been done, except to a very limited extent. The French civil law, as. it existed at the time of the cession, still obtains there, in all its original rigor and rudeness and with all its inequalities, and imperfections.

It is the coutume de Paris, without any of the qualifications, and manifest meliorations and improvements of the code Napoleon. It is, in short, the civil law of Rome, substantially as found in the Pandects. They have no courts of chancery and their courts of law exercise equity powers only to a very limited extent, and this chiefly in cases where such powers have been conferred by express statutes. These statutes are almost all limited to some short term of years, and, in the present perilous times, tbe chance of their being renewed is not a little precarious.

Hence, this case must be here decided, so as to make the parties safe. And this safety, must of necessity, be in some degree measured by the laws, and the constitution and manner of proceeding in the courts of Canada. For the land being there situated, the lex rei sitce must determine the title to it. The contract, in terms, is an absolute conveyance of the land t0 plaintiff, “in payment” of this note, with the right ofdefento repurchase, upon payment of the amount of the price agreed, and the interest.

This note, with others, was due plaintifffrom defendant,sometime previous to the conveyance of the land, and was not surrendered by plaintiff, but retained. This, with other circumstances, might enable a court of equity to treat the transaction as substantially a mortgage, and allow the defendant an equity of redemption. And if so, the plaintiff would be entitled to sue upon his notes. If the land were situated here, we should probably be inclined so to treat the case.

For if the real object and intention of the parties was to secure the payment of the debt, and not to extinguish it, no form of words will enable them, upon the happening of any subsequent event, or any default on the part of the debtor, to foreclose his equity of redemption, but with us, any such contract is absolutely void. This is, indeéd, a principle of chancery jurisdiction, and not of courts of law, as such. Hughs v. Edwards, 9 Wheaton, 489. Henry v. Davis, 7 Johns. Ch. Rep. 40.

It is well settled that a court of equity will treat every contract for the security of a debt, by conveyance of real estate, although not evidenced by any written defeasance, but resting wholly in parol, as a mortgage. Campbell v. Worthington, 6 Vt. T. 448. But, at law, such conveyance vests the absolute title in the grantee, unless the defeasance is under seal. Kelleran v. Brown, 4 Mass. R. 443. And if, on a sale of land, there be a bona fide condition of repurchase or avoidance of the sale, it is valid, but if the debt be not extinguished in the present tense, it will be treated in equity .as a mortgage. Ibid.

Conway’s Executors et al. v. Alexander, 7 Cranch. 218. If the land in question, in the present case, were within our own jurisdiction, so that the defendant’s equity of redemption could be secured to him, by our sustaining this suit, we should, doubtless, be inclined to do so.

But it must, ex necessitate, pertain to every jurisdiction, to determine exclusively all questions pertaining to the title oí real estate^and unless we could feel sure that the courts in Canada will permit the defendant to hold an equity of redemption in the land conveyed to plaintiff, it would be unjust, in the last degree, to permit the plaintiff here to take judgment, which might result in compelling the defendant to pay the price of the land, without the possibility of ever reclaiming the same.

We have no doubt that, in Canada, this would'be treated as an absolute conveyance in payment of the debt,, and that defendant had, at most, a right of repurchase,, which was lost by. lapse of time. And had the transaction occurred here and the notes not been retained by plaintiff,, we should so view it. The judgment of the County Court is,, therefore,, affirmed,.