Hotel Woodward Co. v. Ford Motor Co.

258 F. 322, 169 C.C.A. 338, 1919 U.S. App. LEXIS 1213
CourtCourt of Appeals for the Second Circuit
DecidedMay 14, 1919
DocketNo. 210
StatusPublished
Cited by20 cases

This text of 258 F. 322 (Hotel Woodward Co. v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hotel Woodward Co. v. Ford Motor Co., 258 F. 322, 169 C.C.A. 338, 1919 U.S. App. LEXIS 1213 (2d Cir. 1919).

Opinion

HOUGH, Gircuit Judge

(after stating the facts as above). [1, 2] One matter of procedure justifies preliminary attention. The trial judge dismissed the complaint after having heard all the evidence adduced by both parties. It is clear from the record that the court ordered a dismissal instead of directing a verdict for the defendant because plaintiff’s trial counsel insisted that nothing more than a dismissal was proper under the New York Code of Civil Procedure.

This was a mistake in form; a dismissal (not upon the merits) is a nonsuit, but where, after hearing all the evidence, the trial judge reaches a correct conclusion in favor of the defendant, the jury should be directed to enter a verdict in that defendant’s favor. Stumpf v. Hallahan, 101 App. Div. 383, 91 N. Y. Supp. 1062; affirmed 185 N. Y. 550, 77 N. E. 1196. The rule in the federal courts we stated in Re Iron Clad Manufacturing Co., 197 Fed. 281, 116 C. C. A. 642.

[3] The case being before us, however, on a nonsuit, we “must assume * * * that plaintiff’s testimony is true, and that they are thus entitled to the benefit of every fair inference therefrom.” Davis v. Carnegie Steel Co., 244 Fed. at page 933, 157 C. C. A. at page 283.

[4] Another trial matter must be noted: The amendment pleading the Michigan statute of frauds should have been denied. It has been often held that the statute may be availed of under a general denial [326]*326(e. g. Third National Bank v. Steel, 129 Mich. 434, 88 N. W. 1050, 64 L. R. A. 119); but this defendant had specifically pleaded the New York statute, as required by Crane v. Powell, 139 N. Y. 379, 34 N. E. 911, and Matthews v. Matthews, 154 N. Y. 288, 48 N. E. 531. Doubt-, less it is “common form” to object to amendments as surprising; but, when the distinction between these two statutes, and the course of this trial is considered, the truth of this plea of surprise is manifest, and its result is to produce a legal question that might have been wholly avoided.

One effect of the amendment made after plaintiff rested was to raise the question whether Robertson’s authority (if he had any) was oral or written, if the Michigan statute applied. We search the record in vain for any evidence that testimony on this point had been sought for; certainly none is presented to us, and it was going too far to insert this issue in a case actually on trial in New York, when such written authority as might exist certainly sprang into existence and remained of record in Michigan.

As, however, defendant (so far as we can see) was entitled to amend after motion on due notice, and the question intended to be raised is of importance upon any future trial herein, we shall consider it now.

[5-7] It is not doubted that we must look only to the law of the state in which land is situated for the rules governing its alienation and transfer and for the effect and construction of conveyances of all kinds. Olmsted v. Olmsted, 216 U. S., at page 393, 30 Sup. Ct. 292, 54 L. Ed. 530, 25 L. R. A. (N. S.) 1292, and cases cited. If, therefore, this action related to land title, there would be no doubt that the contract transferring the same would be governed and intefpreted by the law of New York alone; for the proposed 21-year lease is an estate in lands,/and real property under the law of this state. But the plaintiff herein is not suing to establish a title, nor is it seeking to procure one by way of specific perfoi'mance or otherwise. The action is personal and transitory and asserts liability in the defendant for breach of a personal obligation only; there is no effort to obtain an interest in the res; indeed, inability to obtain such interest is presupposed, and relief in personam only is demanded.

Reduced to its simplest legal form, the question here is whether the lex loci contractus (or, more accurately, the lex loci conditionis), or the lex rei sitae applies when a statute of frauds is invoked as a defense. The diversity of judicial opinion revealed by endeavors to discover what law governs the validity of a contract is a most extensive suN jéct, and the results of exhaustive research were stated by Prof. J. H. Beale in 1909.1 The manifest inclination of the courts has usually been toward treating statutes of frauds like other statutes regulating or limiting the right of contract and to find “the law of the contract” (as it is called, in St. Louis R. R. v. Terre Haute R. R., 145 U. S. at page 405, 12 Sup. Ct. 953, 36 L. Ed. 748) in the law of the place where the contract was made. But mingled with this current of decision (turbid as it is) is plainly discernible the conflicting inclination to identi-[327]*327iy all contracts relating to land and all actions for breach of such contracts with conveyances of title to interests in land, to which, as above stated, the lex rei sitae always applies.

Thus the inquiry at bar is narrowed to the following question: What is the law of a contract made in Michigan for the conveyance of an interest in New York realty when the action is to recover money damages only in a personal and transitory suit for the breach of such contract, and action is brought in a court of the United States sitting in New York?

This comparatively small fraction of the larger subject may be, and has been, treated in several different ways.

One view has been compendiously and authoritatively stated by Mr. Dicey substantially as follows: All rights over or in relation to an immovable are governed by the law of the country where the immovable is situate: the effect of a contract with regard to an immovable is governed by the proper law of the contract- — and “proper law of the contract” means the law by which the parties may be fairly presumed to have intended the contract to be governed. Dicey’s Conflict of Laws (Ed. 1908) pp. 500, 510, and 529. This may be regarded as the prevailing, or at least most often stated, English view, and of it Prof. Beale notes that it almost invariably results in finding that the law of the contract is the law of England. This method of statement has often been chosen by our federal courts (Pinney v. Nelson, 183 U. S. at page 148, 22 Sup. Ct. 52, 46 L. Ed. 125, citing Wayman v. Southard, 10 Wheat. 48, 6 L. Ed. 253); and it has likewise at times obtained favor in the courts of New York (Stumpf v. Hallahan, supra). Whether this view is wholly consistent with Bank of Africa v. Cohen (1909) 2 Ch. 129, may be doubted, for it was there held that a married woman’s capacity to contract concerning her own land in the Transvaal was governed solely by the law of the Transvaal, although she had assumed to contract in England, and an action to compel specific performance was promoted in Great Britain.

Another and often prevailing view is that a statute of frauds is a law concerning evidence, not affecting the inherent validity of contracts nor the capacity of the contractors to enter into obligation, but merely prescribing stringent rules by which alone the intent and purpose of the parties shall be made manifest; wherefore the lex fori applies. This doctrine, commonly thought to rest on Leroux v. Brown, 12 C. B. 801, has been apparently approved in Pritchard v. Norton, 106 U. S. 134, 1 Sup. Ct. 102, 27 L. Ed. 104.

But the distinction lias been drawn in respect of. the differing language of the statutes of different sovereignties. Many acts, like the original of 29 Car. II, c.

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Bluebook (online)
258 F. 322, 169 C.C.A. 338, 1919 U.S. App. LEXIS 1213, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hotel-woodward-co-v-ford-motor-co-ca2-1919.