De Waal v. Jamison

Smith, J.: The contract here sought to be enforced is a contract to sell to the plaintiff upon the 11th day of August, 1914,10,000 bags of sugar at two and nine-thirty-seconds cents per pound. The defendants plead the invalidity of the contract under the Statute of Frauds. The facts of the case, as must be assumed upon the dismissal of plaintiff’s complaint, are that the plaintiff sold to the defendants 10,000 bags of sugar at the market price of two and nine-thirty-seconds cents per pound upon the third day of August, upon the promise of the defendants here sued upon to sell to the plaintiff a like amount of sugar at the same price within ten days thereafter, as might be demanded by the plaintiff. The Statute of Frauds upon which the defendants rely is found in section 85 of the Personal Property Law (Oonsol. Laws, chap. 41; Laws of 1909, chap. 45), as added by chapter 571 of the Laws of 1911. Subdivision 1 of that statute applicable to the facts of the case at bar reads as follows: “ A contract to sell or a sale of any goods or choses in action of the value of fifty dollars or upwards shall not be enforceable by action unless the buyer shall accept part of the goods or choses'in action so contracted to be sold or sold, and actually receive the same; or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract or sale be signed by the party to be charged or his agent in that behalf. ” It is not claimed here that any of these goods have been delivered or accepted by the [758] plaintiff or that any part of the purchase price of two and nine-thirty-seconds cents per pound has been paid therefor. The expression used in the statute, “or give something in earnest to bind the contract ” has a well-defined legal meaning. In “Words and Phrases Judicially Defined” (Vol. 3, p. 2302) “earnest” is defined as “payment of part of the price of goods sold, or a delivery of part of the goods, for the purpose of binding the contract. The idea of ‘ earnest ’ in connection with contracts was taken from the civil law. As used in the Statute of Frauds providing that sales of personalty of over a certain value shall be void unless there be a memorandum in writing or the purchaser receive and accept the same, or give something in earnest, ‘ earnest ’ means a part payment of the price. ” (Citing authorities.) The sale to the defendants upon August third of the plaintiff’s sugar at the market price cannot be deemed in any way a part payment of the price of the sugar promised to be delivered by the contract sued upon. If that sale had been at a price less than the market price a "different question might arise, which it is not necessary here to' consider, but when that sale was made at the market price 'at which the goods could have been bought by the purchaser from other vendors or at which the goods could have been sold to other purchasers, it is inconceivable that such sale could in any way be deemed ‘ ‘ the giving of something in earnest to bind the defendant’s contract,” or “in part payment thereof.” In Johnston v. Trash (116 N. T. 136) the defendants, who were bankers and brokers, purchased certain bonds for plaintiff under an oral contract by which they agreed that if the plaintiff should thereafter become dissatisfied, they would on demand take the bonds off his hands at what they cost him. Upon payment of the purchase price and their commissions defendants delivered the bonds to plaintiff, who thereafter tendered them back and demanded the price paid, and on defendants’ refusal to accept and pay for the same, brought action for breach of contract. It was there held that said provision in the agreement was not a contract for the sale of goods, chattels or things in action within the Statute of Frauds, but was a provision for the rescission of the entire contract, and so was valid. The appellant in this case makes no claim that this is [759] a contract for rescission, because the contract is not to redeliver to the plaintiff the identical property that was sold by the plaintiff to the defendants. In Williams v. Burgess (10 A. & E. 499) there was an oral agreement for the sale of a mare for twenty pounds, coupled, with a covenant to sell it back for twelve pounds. The agreement to resell for twelve pounds was there held not to be within the Statute of Frauds, and it is claimed that this could not have been on the theory of rescission because the price was not the same. But in that case it was for a resale of the identical property originally sold. Littledale, J., in deciding that case, said: “ Plaintiff is willing to part with his property on certain conditions, which are part of the agreement. It is not an independent contract of sale on which he sues, but the original contract, which was a qualified sale.” In Lumsden v. Davies (11 .Ont.. App. 585) the plaintiff bought tea of the defendant on defendant’s agreement to buy back the unsold portion oh a certain date at an advance of ten cents per pound. The Statute of Frauds was pleaded, and Burton, J. A., in writing for the court, says: “ Further reflection has, however, led me to the conclusion that the defendant’s promise is not an independent original contract, but rather a part of the same contract by which the plaintiffs agreed to become the purchasers of the tea, and by which the plaintiffs’ purchase became a qualified and not an absolute purchase.” Here, too, was an agreement to repurchase a part of the very article sold, and was sustained only upon the principle that the agreement to repurchase qualified the original sale of the article itself. In Morse v. ■ Douglass (112 App. Div. 798) the defendant, agent of a disclosed principal, agreed with the plaintiff that if the latter would purchase certain stock from defendant’s principal, he, the agent, would repurchase it from him subsequently if he became dissatisfied with the purchase. This was held to be a separate and independent contract, void by the Statute of Frauds, notwithstanding the agreement was to purchase the very article sold. But the agreement was made by a third party. Thé same principle is announced in Boardman v. Cutter (128 Mass. 388). Ho case has been cited, and I have been able to find none, in which an agreement to sell at a specified price any property not originally purchased [760] from the party seeking to enforce the contract has been held to be taken out of the Statute of Frauds by reason of the sale of other property made to the promisor, although such sale might have been an inducement to the making of the promise sued upon. The general statement that a part performance takes a contract out of the Statute of Frauds is not entirely accurate. That part performance must be made within the tórms of the statute itself, or, at least, it must leave the parties in a condition where to enforce the statute would itself constitute a fraud. ■ If I have properly interpreted the statute there cannot be claimed here to have been the giving of anything in earnest to bind the contract or in part payment, and the sale by plaintiff to the defendants of the sugar upon August third at the market price gives the plaintiff no equitable right to claim that he has been defrauded by the failure of the defendants to perform the promise thus made unenforcible by the statute. It is further contended that the writings in this case may, when considered together, answer the requirement of the statute. This is based upon a letter written to the defendants by the plaintiff upon August third, as follows: “Messrs. Arbuckle Brothers, “ Old Slip & Water Street, “New York City: “Dear Sirs.— We have advised Messrs. Francke, Hijos & Company to deliver to you 10,000 bags Centrifugals expected to arrive within the next few days per S/S ‘Syndic.’ As per agreement with your Mr. Kennedy these are to be held for later return.” That was O. K.’d by some agent of the defendants. The difficulty with the appellant’s contention is that there is nothing in writing to indicate what was the agreement with Mr. Kennedy, nor is there in the paper itself anything to indicate what date could be supplied for the “later return,” specified in the letter. The judgment should be affirmed, with costs. Clarke, P. J., and Shearn, J., concurred; Laughlin and Dowling, JJ., dissented.