The formula employed by the district court has resulted in an award to Johnson in excess of his rightful expectations. Under Maryland conflict-of-laws principles, the law of the forum governs the remedy in an action for breach of contract. Traylor v. Grafton, 273 Md. 649, 332 A.2d 651 (1975); Mandru v. Ashby, 108 Md. 693, 71 A. 312 (1908). Johnson had two reasonable anticipations from the wholesale dealership contract with Oroweat.
Fischer v. Viacom International, Inc., 115 F. Supp.2d 535, 538-39 (D.Md. 2000) ("Maryland courts generally adhere to the doctrine of lex loci delicti, and will apply their own procedural rules, including statutes of limitations, to claims that arise under the substantive law of other states." (citing Pottratz v. Davis, 588 F. Supp. 949, 952 (D.Md. 1984))); Sokolowki v. Flanzer, 769 F.2d 975, 978 (1985); Turner v. Yamaha Motor Corp., U.S.A., 591 A.2d 886, 887 (Md.Ct.Spec.App. 1991) (citing Mandru v. Ashby, 71 A. 312 (Md. 1908)). "There is an exception where the substantive law of a foreign state applies, but the foreign statute of limitations constitutes a condition precedent to the right to maintain the action.
The Maryland conflicts rule is that questions as to the construction and legality or validity of a contract are ordinarily governed by the law of the place where the contract was made. Scott v. First Nat. Bank of Baltimore, 224 Md. 462, 168 A.2d 349 (1962); Union Trust Co. of New Jersey v. Knabe, 122 Md. 584, 89 A. 1106 (1914); Mandru v. Ashby, 108 Md. 693, 71 A. 312 (1908). The contract involved in this case was made in Pennsylvania and was to be performed partly in Maryland and partly in Pennsylvania.
The Maryland conflicts rule is that questions as to the construction and legality or validity of a contract are governed by the law of the place where the contract was made. Scott v. First Nat. Bank of Baltimore, 224 Md. 462, 168 A.2d 349 (1962); Union Trust Co. of New Jersey v. Knabe, 122 Md. 584, 89 A. 1106 (1914); Mandru v. Ashby, 108 Md. 693, 71 A. 312 (1908). Inasmuch as the contract in the present case was prepared by Universal in New York and became effective when signed by Universal in that state, New York is the place where the contract was made.
It seeks the recovery of $116,375 or one-half the total settlement figures with interest upon one-half of each settlement from the date of payment, and costs of the suit. The parties are in agreement that the applicable period of limitations is the three year statute of the forum, Maryland, as embodied in the Annotated Code of Maryland, Article 57, Sec. 1; and see Mandru v. Ashby, 1908, 108 Md. 693, 695, 71 A. 312. Presumably Martin has reference to the provisions relating to simple contract; Northwest, to the provisions as to "actions of assumpsit, or on the case * *."
" See, also, Savings Bank of Richmond v. National Bank of Goldsboro (C.C.A.4) 3 F.2d 970, 973, 39 A.L.R. 1374. It has also been held that the lex fori properly determines whether an instrument sued on is under seal or not, as the answer affects the procedure thereon, Mandru v. Ashby, 108 Md. 693, 71 A. 312; Trasher v. Everhart, 3 Gill J. (Md.) 234, 246; United States Bank v. Donnally, 8 Pet. 361, 372, 8, L.Ed. 974; Wells v. Alropa Corporation, 65 App.D.C. 281, 82 F.2d 887. But compare American Law Institute Restatement of Conflict of Laws, § 335, which states "The law of the place of contracting determines whether an instrument alleged to be a contract under seal is effectively sealed."
The Traylors argue that the law of the forum governs the remedy, that the liquidated damage clause in the contract was in fact a "penalty" and as such was unenforceable. While it is true that the remedy for breach of contract is regulated by the law of the forum, Mandru v. Ashby, 108 Md. 693, 695, 71 A. 312, 313 (1908), it is a general rule of comity that the law of the place of contracting determines the validity and effect of a contract with respect to the nature and extent of the duty owed by a party who becomes bound to perform. Mackubin v. Curtiss-Wright Corp., 190 Md. 52, 57, 57 A.2d 318, 321 (1948); Union Trust Co. v. Knabe, 122 Md. 584, 89 A. 1106 (1914); Mandru v. Ashby, supra. As was stated in Union Trust Co. v. Knabe, supra: "`the lex loci contractus controls the nature, construction and validity of the contract. Courts will always look to the lex loci, to give construction to an instrument, and will impart to it validity, according to those laws, unless it would be dangerous, against public policy, or of immoral tendency to enforce it here.'"
O'Roark maintains that this action is barred by the Maryland statute of limitations which, he says, began to run from the date the wetness in the basement recurred — i.e., June, 1962. We disagree. Maryland has held that their statute of limitations bars only the remedy in a contract action, Frank v. Wareheim, 177 Md. 43, 7 A.2d 186, 191, 193 (1939), and as such is a procedural bar only. Mandru v. Ashby, 108 Md. 693, 71 A. 312 (1908). Since the laws of the forum always apply to matters of procedure, Namerdy v. Generalcar, D.C.App., 217 A.2d 109, 113 (1966), we hold that the trial court properly applied the District of Columbia 3-year statute of limitations.
It is agreed that the limitations of the forum, Maryland, for bringing suit on the assessment, govern. Mandru v. Ashby, 108 Md. 693, 71 A. 312. And the time from which the limitations are to run is, in this case, the date of the decree or order making the assessment, September 12th, 1938. Glenn v. Williams, 60 Md. 93, 123; Mister v. Thomas, 122 Md. 445, 459, 89 A. 844. And see 7 Couch, Ins., sec. 1668. This court has observed the distinction between limitations in suits on simple contract obligations and those in suits on statutory liabilities.
The court found that, though the instrument involved conformed to the requirements of the law of Wisconsin relative to instruments under seal, it did not meet the requirements in that respect of the law of New York and held that the proper form of action must be such as is practiced on an unsealed instrument "in the state where the suit is instituted." In the case of Mandru v. Ashby, 108 Md. 693, 71 A. 312, it was held that a sealed note, made in Ohio, though not a specialty, according to the laws of Ohio, will be treated as a specialty in Maryland, and is subject to the limitation laws of Maryland. In announcing its conclusion, the court stated: