Case Name: WALTON SCHOOL OF COMMERCE v. STROUD
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1929-10-07
Citations: 248 Mich. 85
Docket Number: Docket No. 93, Calendar No. 34,081
Parties: WALTON SCHOOL OF COMMERCE v. STROUD.
Judges: North, C. J., and Fead, Clark, McDonald, and Sharpe, JJ., concurred with Potter, J.
Reporter: Michigan Reports
Volume: 248
Pages: 85–95

Head Matter:
WALTON SCHOOL OF COMMERCE v. STROUD.
1. Contracts — Breach—Foreign Contracts — Remedy.
In action in this State on foreign contract, remedy available to plaintiff is the remedy afforded by the laws of Michigan.
2. Same — Validity and Construction op Contract Controlled by Situs, Remedy Controlled by Laws op State op Forum.
The validity and construction of a contract are controlled and to be determined by the laws of the situs or place^ where the contract was entered into, while the remedy for enforcing a foreign contract is regulated by the laws of the forum or country where such remedy is pursued.
3. Same — Remedy por Breach op Executory Foreign Contract is Damages Arising prom Breach.
In action on contract for correspondence course of instruction accepted in Illinois, where defendant renounced contract and refused to perform, plaintiff is not entitled to recover contract price, but, contract being executory, recovery is limited to damages arising from its breach, and, in absence of proof of such damages, no recovery may be had.
4. Same — Measure op Damages por Breach op Executory Contract.
In action for breach of executory contract, measure of damages is difference between contract price and what it would have cost plaintiff to perform.
5. Evidence — Judicial Notice May be Taken op "Common Law and Statutes op Foreign States.
In action on Illinois contract, court is not bound by testimony alone, but may take judicial notice of common law of said State as well as of its statute law (3 Comp. Laws 1915, §§12512, 12513, 12515).
Wiest, J., dissenting. ,
Error to Wayne; Webster (Clyde I.), J.
Submitted April 9, 1929.
(Docket No. 93, Calendar No. 34,081.)
Decided October 7, 1929.
Assumpsit by Walton School of Commerce against Clifton Stroud on a correspondence school contract. From judgment for defendant, plaintiff brings error.
Affirmed.
Wynn é Zinn, for plaintiff.
Wade Millis (Victor H. Wehmeier, of counsel), for defendant.

Opinion:
Potter, J.
Plaintiff, an Illinois corporation, sued defendant in assumpsit in justice's court; there was judgment for plaintiff and defendant appealed. In the circuit court there was judgment for defendant and plaintiff brings error.
Defendant subscribed for three courses of instruction with plaintiff. The enrollment contracts, when accepted by plaintiff in Chicago, constituted the contract between the parties. Defendant, before suit was brought, had stopped performance by plaintiff by his own refusal to perform, and plaintiff thereupon sued defendant.
The remedy available to plaintiff is the remedy afforded by the laws of Michigan.
"The lex fori governs in determining the mode of trial, including the form of pleading and the mode of redress." 13 C. J. p. 259, 260.
"No man can sue in the courts of any country, whatever his rights may be, unless in conformity with the rules prescribed by the laws of that country." Dixon's Executors v. Ramsay's Executors, 3 Cranch (7 U. S.), 319.
"The validity and construction of a contract are controlled and to be determined by the laws of the situs or place where the contract was entered into, while the remedy for enforcing a foreign contract is regulated by the laws of the forum or country where such remedy is pursued." Millar v. Hilton, 189 Mich. 635.
"Among the matters which have been held to pertain to the remedy, and consequently to be governed by the lex fori, are the mode of procedure, nature and form of action." 5 R. C. L. p. 1043.
In Wigent v. Marrs, 130 Mich. 609, defendant's intestate ordered a monument erected upon her lot. Later defendant unqualifiedly renounced the contract before the monument was completed, • and forbade its erection. The court held she had a right to do this, and thereafter plaintiff's right of recovery was limited to damages for breach of the contract.
In International Textbook Co. v. Schulte, 151 Mich. 149, plaintiff, a Pennsylvania corporation, contracted with defendant substantially as in this case. Defendant defaulted on the contract and plaintiff sued to recover the balance of the contract price. There was no evidence of any breach of contract by plaintiff or of any waiver of defendant's undertaking to perform. It is said:
"It would be presumed that plaintiff would be put to some expense in performing the contract. Defendant having repudiated and refused to receive whatever was to be furnished to him, plaintiff is relieved from some of this expense. The facts are especially within its knowledge. It did. not supply the evidence necessary to the fixing of its damages. ' '
In International Text-Book Co. v. Jones, 166 Mich. 86, a substantially similar contract was involved, and plaintiff, a Pennsylvania corporation, instituted suit in the courts of this State. It is said:
"The plaintiff unequivocally renounces any claim that this action is based on a breach of the contract by defendant. He rests it on the claim that the contract contained an unqualified promise to pay certain installments at stated times, that it had performed its contract, so far as it was possible to do so, beifig prevented by defendant's failure to forward his work done, and that, the time having elapsed within which all of the payments were to become due, the defendant is liable upon his promise, leaving plaintiff to perform its contract, which it is willing to do.
"It is the rule in this State that a party to an executory contract may always stop performance by the other party by an explicit direction or renunciation of the contract, and refusal to perform further on his part, and that he is thereafter liable only upon the breach of the contract.
"The contract price is recoverable only upon the theory of performance, never upon the theory of inability to perform. That the contract was not performed fully by plaintiff is obvious, as we said in International Textbook Co. v. Schulte, 151 Mich. 151. The case of Wigent v. Marrs, 130 Mich. 609, completely covers this case."
Plaintiff contracted with- defendant with full knowledge of defendant's rights, which it must be presumed to know. It knew defendant had a right to. renounce the contract and refuse to perform further, and that he thereafter was liable only for damages for breach of contract. Plaintiff made no proof of any damages arising from breach of contract. It proved the contract and introduced a certified copy of the unreported opinion of the Illinois appellate court in International Accountants Soc. v. Maxwell, 236 Ill. App. 627.
In the Maxwell Case defendant subscribed for the course. Her subscription was accepted. She gave a promissory note in payment therefor. She thereafter refused to complete the course. Suit was brought upon the note. She defended on the ground of want of consideration. The court held that she could not prove her own default to show want of consideration for the note. Here no promissory note is involved. Suit may not in this case be brought on the contracts. By the law of this State, the only action which, under the circumstances, may be maintained by plaintiff is an action for damages for breach of contract. The form of action is governed by the law of the forum. Galloway v. Holmes, 1 Doug. 330; Moses v. Steamship Missouri, 1 Mich. 572; Millar v. Hilton, 189 Mich. 635; 5 R. C. L. p. 1040; Blanchard v. Russell, 13 Mass. 1.
"The general principle adopted by civilized nations is, that the nature, validity and interpretation of contracts, are to be governed by the laws of the country where the contracts are made, or are to be performed. But the remedies are to be governed by the laws of the country where the suit is brought; or, as it is compendiously expressed, by the lex fori." Bank of the United States v. Donnally, 8 Pet. (33 U. S.) 361.
By comity, citizens of Illinois may sue in the courts of Michigan, but the law of Illinois has no extraterritorial force. The courts of this State may not be used to prosecute to effect a cause of action in a manner contrary to the laws of Michigan. A foreign citizen cannot avail himself in the courts of this State of remedies which are denied to our own citizens.
Plaintiff has a complete and adequate remedy by suit for breach of the executory contract, and under the law of Illinois the measure of damages for the preach of an executory contract is the same as in Michigan. Hayes v. Wagner, 220 Ill. 256 (77 N. E. 211); George J. Cooke Co. v. Hell, 175 Ill. App. 532; McGuire v. Winston, 157 Ill. App. 222; George J. Cooke Co. v. Hochmuth, 194 Ill. App. 626; Devlin v. Mayor, 63 N. Y. 8. It aims at compensation of the injured party — to make him whole. It is the difference between the contract price of the course and what it would have cost plaintiff to give it. International Textbook Co. v. Schulte, supra.
McGuire v. Winston, supra, expressly approved Devlin v. Mayor, supra, where it is said:
"The party who has. been wrongfully deprived of the gains and profits of an executory contract may recover as an equivalent, and by way of damages, the difference between the contract-price, the amount which he would have earned and been entitled to recover on performance, and the amount which it would have cost him to perform the contract.
"Where, without fault on his part, one party to a contract who is willing to perform it is, by the other party, prevented from doing so, the primary measure of damages is the amount of his loss, or, as it has been otherwise expressed, the value of his contract which may consist of two distinct items, the one being the party's reasonable outlay or expenditure toward performance, and the other the anticipated profits which would have been derived from performance." 17 C. J. p. 855.
This court is not bound by the testimony alone. It may take judicial notice of the common law of the State of Illinois as well as of its statute law. 3 Comp. Laws 1915, § 12512,12513,12515.
Plaintiff having no right to maintain any other action against defendant than for breach of contract, and having adduced no proof of any damages resulting from such breach, none may be awarded. Judgment affirmed, with costs.
North, C. J., and Fead, Clark, McDonald, and Sharpe, JJ., concurred with Potter, J.