Court Opinion

ID: 3933040
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:58:02.059149+00
Date Added: 2024-06-11T14:16:48.686347
License: Public Domain

I am of opinion that section 726 of the California Code has no application to this suit brought in Texas, and that judgment should have been rendered for appellant. Very briefly stated, my views are:
The law of Texas applied to the facts of this case would not prevent a recovery. The laws of California, if applicable, will prevent recovery. The question thus reduces itself to a determination of whether the laws of Texas or California shall prevail.
It is well settled that the construction and validity of a contract is governed by the law of the place where it is made. But it is universally conceded that the affording of remedies in one state for enforcing a contract made in another depends entirely upon judicial comity and that the remedies and procedure are therefore governed entirely by the lex fori. In other words, the lex fori prevails over all other laws so far as concerns matters that relate to the remedy as distinguished from the substantive contract. 5 Ruling Case Law, pp. 931, 942, et seq.; cases cited in 4 Michie, Ency.Dig. p. 260; *Page 882 
9 Cyc. 690 et seq.; 2 Parsons on Contracts (9th Ed.) p. 588; 2 Wharton Conflict of Laws (3d Ed.) § 675a; 3 Am.  Eng. Ency. Law (1st Ed.) 576; 2 Bouvier's Law Dictionary (3d Ed.) 1940.
The portion of section 726 of the California Code pertinent to the question considered is quoted in the majority opinion, and it is unnecessary to repeat same. As I construe same and the rest of the section, it relates purely to the remedy and matters of procedure connected therewith. It does not in any wise affect the substantive contract between the parties.
It may be conceded that, where the remedy provided by the lex loci affects the validity and obligation of a contract, the same is imported into and becomes an essential part of the contract. Thus, while the question of limitation of the time for bringing an action is ordinarily a matter of remedy and is governed by the lex loci, it is otherwise when the limitation becomes incorporated into the cause of action as a part or condition thereof. In other words, statutes of limitation, unless they discharge a debt, go to the remedy merely and questions arising under them are to be determined by the law of the forum. 9 Cyc. 691, and cases there cited. This same rule is applied by some of the courts as to contracts falling within the statutes of fraud of the state where made, but which would be valid under the law of the forum. In this case the statutes of fraud of the lex loci are regarded as affecting the validity and obligation of a contract, rather than the remedy upon same. The cases of Jones v. National Cotton Oil Co., 31 Tex. Civ. App. 420, 72 S.W. 248, and Cochran v. Ward, 5 Ind. App. 89, 29 N.E. 795, 31 N.E. 581,51 Am. St. Rep. 229, referred to in the majority opinion, fall within this category.
The doctrine upon which this class of cases rests is well stated in Cochran v. Ward, as follows:
"There can be no doubt, we think, that to the extent that the remedy affects the validity and obligation of a contract it is imported into and becomes an essential part of it, and characterizes it whenever it is the subject-matter of litigation. This doctrine does not conflict with the general rule that in matters of procedure the lex fori controls. `Procedure,' in this connection, applies to the nature of the action, as whether it shall be covenant, assumpsit, debt, etc., to the rules of pleading and evidence, the order and manner of trial, and the nature and effect of process, and perhaps to all other matters of remedy only which are not incorporated into the contract as affecting its nature and obligatory character."
It will be readily seen, as is expressly stated in Cochran v. Ward, that these are not even exceptions to the rules relating to the lex loci and lex fori. They merely furnish illustrations that in some instances the remedy becomes a part of and affects the validity and obligation of a contract. These and many other cases to like effect are distinctions, and not exceptions to the rule. For discussion of the subject, see 2 Wharton on Conflict of Laws (3d Ed.) §§ 675a, 676, et seq. The distinction is also pointed out in 5 Ruling Case Law, p. 942, in referring to Cochran v. Ward.
I regard said section 726 as affecting the remedy and procedure merely as to actions brought in California for the recovery of any debt or the enforcement of any right secured by mortgage, and that the same in no wise affects the validity, obligation, or right under the contract. This being its nature, it can have no extraterritorial effect, and the right of Lindsay to bring this suit in Texas to recover a personal judgment upon the note, which he was unable to obtain in the California suit, is not affected thereby. There is nothing in the law of Texas which would prevent him from pursuing his remedy by this suit to obtain such a personal judgment, and, in my opinion, it is error to apply the provisions of section 726 of the California Code and deny a recovery.