HKB
ACTIONS UPON CONTRACT: WHEN GOVERNED BY LAW OF PLACE OF MAKING
In Chicago and Alton R.R. v. Wiggins,[100] referred to above, the Court, confronted with the latter form of the question, indicated its clear opinion that in such situations it was the law under which the contract was made, not the law of the forum State, which should govern. Its utterance on the point was, however, not merely obiter; it 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 right of action originated sets thereto, except that courts of sister States cannot be thus prevented from taking jurisdiction in such cases.[101] However, a State court does not violate the full faith and credit clause by mere error in construing the law upon which a transitory action from another state depends;[102] nor is a court of the forum State guilty of a disregard thereof when it entertains a suit based on a statute of another State, albeit the statute in terms limits actions thereunder to courts of the enacting State.[103] Moreover, in actions on contracts made in other States, a State constitutionally may decline to enforce in its courts, as contrary to its own policy, the laws of such States relating to the right to add interest to the recovery as an incidental item of damages.[104]
STOCKHOLDER--CORPORATION RELATIONSHIP
Nor is it alone to defendants in transitory actions that the full faith and credit clause is today a shield and a buckler. Some legal relationships are so complex, the Court holds, that the law under which they were formed ought always to govern them as long as they persist.[105] One such relationship is that of a stockholder and his corporation. Hence, if a question arises as to the liability of the stockholders of a corporation, the courts of the forum State are required by the full faith and credit clause to determine the question in accordance with the Constitution, laws and judicial decisions of the corporation's home State.[106] Illustrative applications of the latter rule are to be found in the following cases. A New Jersey statute forbidding an action at law to enforce a stockholder's liability arising under the laws of another State, and providing that such liability may be enforced only in equity, and that in such a case the corporation, its legal representatives, all its creditors, and stockholders, should be necessary parties, was held not to preclude an action at law in New Jersey by the New York State superintendent of banks against 557 New Jersey stockholders in an insolvent New York bank to recover assessments made under the laws of New York.[107] Also, in a suit to enforce double liability, brought in Rhode Island against a stockholder in a Kansas trust company, the courts of Rhode Island were held to be obligated to extend recognition to the statutes and court decisions of Kansas whereunder it is established that a Kansas judgment recovered by a creditor against the trust company is not only conclusive as to the liability of the corporation but also an adjudication binding each stockholder therein. The only defenses available to the stockholder are those which he could make in a suit in Kansas.[108]
FRATERNAL BENEFIT SOCIETY--MEMBER RELATIONSHIP