American

Case Name: Rathbone v. Coe

Citation: 50 N.W. 620
Date of Decision: October 10, 1888
Origin according to syllabus: American Case

Doctrine:
Where the statute of the state where the contract was made extinguishes the debt itself, instead of
merely affecting the remedy, and the parties have resided there during the period of limitation, it
is a good defense in a foreign jurisdiction.

Facts:
Two promissory notes were executed by Coe in favor of Rathbone. Both were executed at
Milwaukee, Wisconsin, and payable on demand. Coe had resided at Milwaukee continuously
from the giving of the note until sometime in 1885. The action was commenced in 1886. In
answer to each cause of action, defendant alleged that the execution and delivery of the notes at
Wisconsin, it being payable on demand, his residence there, and that he could have been served
with process in that state at any time from the giving of the note until 1884. Appellants contend
that Wisconsin’s statute of limitations did not extinguish the debt but merely affected the
remedy; and that even if it did, such was not so pleaded. The Wisconsin statute states: “The
following actions must be commenced within the periods hereinafter prescribed after the cause
of action has accrued.” (The period prescribed is six years). Counsel for appellants further argued
that the general rule is that where the statute of limitations is pleaded the lex fori governs and
that this rule applies even though the action was barred in the state where it arose before the
debtor removed therefrom.The counsel claimed that the only two exceptions to the rule are when
the statute where the contract was made extinguishes the debt, and where the lex fori provides
that an action shall not be maintained where it is barred in the state where it arose. Thus,
according to counsel, the Wisconsin statute does not extinguish the debt, and there is no statute
here (Dakota) covering the second exception, hence lex fori governs.

Issue:
W/N the applicable law is that of Dakota (lex fori) or that of Wisconsin—The law of Wisoncsin.

Ruling:
The debt of the plaintiffs is barred by the statute of Wisconsin. The Supreme Court of Dakota
agrees with the counsel for respondent in saying that where the statute of the state where the
contract was made extinguishes the debt itself, instead of merely affecting the remedy, and the
parties have resided there during the period of limitation, it is a good defense in foreign
jurisdiction. The Wisconsin statute extinguished the debt. The answer of the defendant is
sufficient to allow the defendant to prove the defense, considering that it sufficiently alleged the
facts showing that the Wisconsin statute was a bar to this action.