Poole v. Perkins
18 A.L.R. 1509, 101 S.E. 240, 126 Va. 331 (1919)
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Rule of Law:
When a contract is executed in one state but is to be performed in another, the capacity of the parties to contract is governed by the law of the state of performance (lex loci solutionis), as this is presumed to be the parties' intended governing law.
Facts:
- W. T. Poole and his wife, F. D. Poole, were residents of Bristol, Tennessee.
- On January 1, 1912, while in Tennessee, the Pooles executed a joint promissory note payable to Marvin Perkins, who was also a resident of Tennessee.
- At the time the note was executed, Tennessee law recognized the defense of coverture, which made contracts by married women voidable.
- The promissory note specified on its face that it was payable at a bank in Bristol, Virginia.
- Under Virginia law, a married woman had the legal capacity to enter into such a contract.
- Subsequently, all parties to the note became residents of Virginia.
Procedural Posture:
- Marvin Perkins instituted a proceeding by notice of motion against F. D. Poole in the Circuit Court of Wythe County, Virginia (the trial court), to recover on the promissory note.
- All matters of law and fact were submitted to the court without a jury.
- The Circuit Court rendered a judgment against Mrs. Poole.
- Mrs. Poole, as plaintiff in error (appellant), obtained a writ of error to have the judgment reviewed by the Supreme Court of Appeals of Virginia.
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Issue:
Does the law of the place of performance (Virginia), rather than the law of the place of execution (Tennessee), govern a married woman's capacity to enter into a contract when the contract explicitly designates Virginia as the place of payment?
Opinions:
Majority - Kelly, J.
Yes. The law of the place of performance governs a party's capacity to contract when the contract specifies performance in that place. The court reasons that the law governing a contract (lex loci contractus) should be determined by the presumed intention of the parties. When parties execute a contract in one state that is expressly to be performed in another, they are presumed to have intended the law of the place of performance (lex loci solutionis) to control its validity, nature, and effect. This includes the capacity of the parties to enter the contract. The court holds that designating the place of performance in Virginia is sufficient evidence of an intention to be bound by Virginia law, making the note as truly a Virginia contract as if it had been signed and delivered there. Therefore, Mrs. Poole's defense of coverture under Tennessee law is invalid, and the contract is enforceable under Virginia law.
Analysis:
This decision establishes a key choice-of-law principle in Virginia contract law, prioritizing the parties' intent over the physical location of the contract's signing (the lex celebrationis). By holding that the law of the place of performance governs contractual capacity, the court promotes predictability and uniformity in interstate commercial transactions. This ruling favors upholding contracts that are valid where they are meant to be carried out, thereby preventing parties from using a technical incapacity in one state to evade an obligation they agreed to perform in another. It solidifies the 'intention of the parties' doctrine as the primary test for determining the governing law of a contract's validity.
