163 N.W.2d 35 | Mich. Ct. App. | 1978
VOWELS
v.
ARTHUR MURRAY STUDIOS OF MICHIGAN, INC.
Michigan Court of Appeals.
Koperski & Spires, for plaintiff.
Darden, Neef & Heitsch, for defendant.
*361 J.H. GILLIS, J.
In September, 1961, plaintiff, Barbara (Butcher) Vowels, contracted for dancing lessons with the Arthur Murray Studio located in Birmingham, Michigan. The contract was for 139-1/2 hours of instruction for which plaintiff paid $1393. Later in that same month the Birmingham studio went out of business and plaintiff has not received any instruction under her contract. Refusing defendant's offer to make comparable lessons available at its Flint or Detroit studios, plaintiff brought this action for breach of contract setting forth her damages in the amount of the contract price. In a nonjury trial in the common pleas court for the city of Detroit, the court found that defendant had breached its contract and adjudged that it respond in damages in the above amount. Defendant appeals.
For approximately 2 years prior to entering into the present contract plaintiff had been taking lessons at the Birmingham studio. All negotiations and agreements over this period, present contract included, were conducted and made with John H. McNair. Mr. McNair was in actuality the owner-franchisee of the Birmingham studio as a sole proprietor under the assumed name Arthur Murray Studio of Birmingham. The parent licensor and defendant herein is Arthur Murray Studios of Michigan, Inc., with whom plaintiff believed, according to her own testimony, she was dealing.
Indeed, the exhibits which form part of this record on appeal include a prior contract with this plaintiff on a form entitled: "Arthur Murray Studios of Michigan, Inc. Enrollment Agreement and Contract" and is signed by defendant corporation indicating the Birmingham Branch. A notation regarding the present contract was made under the Birmingham letterhead and signed by John H. McNair, *362 Manager. A receipt for the $1393 contract payment is made under the letterhead Arthur Murray Studios with the designation "Birmingham" written in on a blank indicating "studio." Likewise a statement sent to plaintiff was under the letterhead Arthur Murray Studios, followed by the Washington Boulevard address of the defendant corporation.
The evidence establishes, and the trial court so concluded, that the Birmingham location was a material aspect of the contract and the discontinuance of that location rendered the contract incapable of being performed as agreed. Whatever the exact legal relationship between the defendant and its licensee, it is safe to conclude that plaintiff was justified in believing she was dealing with an agent of defendant rather than with a sole proprietor. We agree that for this contract, Mr. McNair was acting as an agent of defendant corporation and that the terms of the contract between McNair and plaintiff are likewise binding on defendant. Moreschini v. Regional Broadcasters of Michigan, Inc. (1964), 373 Mich. 496; Michael v. Kircher (1953), 335 Mich. 566; 1 Michigan Law and Practice, Agency, § 63, pp 351-353.
It is likewise a fair conclusion from the evidence adduced at trial that the place of performance was material to the contract. The past dealings between plaintiff and McNair at Birmingham lead to a reasonable inference that the term was within the contemplation of McNair and plaintiff so that we cannot say that the trial judge's findings to this effect are clearly erroneous (GCR 1963, 517.1). While we do not write contracts for the parties, we do interpret their objective actions as manifesting an intention which may form part of a written contract so long as it is not inconsistent therewith. W.J. Howard & Sons, Inc. v. Meyer (1962), 367 Mich. 300; Hull v. Detroit Equipment Installation, Inc. (1968), 12 Mich *363 App 532; S.F.A. Studios v. Docherty (1968), 12 Mich. App. 170.
Finding then support in the record for the conclusion that place of performance was material, we likewise find that McNair's closing the studio rendered performance impossible. The evidence indicates that although for contracting purposes defendant was represented by McNair, it could not stop McNair from closing the studio. Such finding does excuse defendant from breach but does require that defendant refund the consideration for the unused portion of the contract. 17 Am Jur 2d, Contracts § 424, pp 878, 879. In this case the amount due is $1393 since plaintiff had no lessons at Birmingham before that studio was closed. This is the same amount awarded by the trial judge. The only difference is that we treat the contract as rescinded[*] for failure of consideration rather than breached, and the award as a return of consideration rather than damages.
The trial judge added interest to the judgment in the amount of $312. We think the reasoning on this point found in Kraus v. Arthur Murray Studios of Michigan, Inc. (1965), 2 Mich. App. 130, is equally apropos in the present case. Interest should accrue from the date of demand for refund of the consideration. The trial judge should make a finding from the present record as to the date of demand. Absent *364 support in the record for any conclusive finding, interest shall commence from the date of filing. CLS 1961, § 600.6013 as amended by PA 1965, No 240, and PA 1966, No 276 (Stat Ann 1968 Cum Supp § 27A.6013).
Remanded for entry of judgment consistent with this opinion. Costs to appellee.
QUINN, P.J., and HOLBROOK, J., concurred.
NOTES
[*] "`To rescind a contract is not merely to terminate it, but to abrogate and undo it from the beginning; that is, not merely to release the parties from further obligation to each other in respect to the subject of the contract, but to annul the contract and restore the parties to the relative positions which they would have occupied if no such contract had ever been made. Rescission necessarily involves a repudiation of the contract and a refusal of the moving party to be further bound by it. But this by itself would constitute no more than a breach of the contract or a refusal of performance, while the idea of rescission involves the additional and distinguishing element of a restoration of the status quo.' 1 Black on Rescission and Cancellation (2d ed.), § 1." Wall v. Zynda (1938), 283 Mich. 260, 264.
