David Taylor Co. v. Fansteel Products Co.

Sherman, J. The controlling question is whether or not the amended complaint must meet dismissal upon the ground that the agreement sued on does not constitute an integrated written contract in which are embodied all of the essential terms as required by the Statute of Frauds. The contract is for the sale and delivery of ore containing from thirty per cent to sixty per cent of tantalum oxide, of a value far in excess of fifty dollars, and is not to be performed within a period of one year. Defendant purchased thereunder all of the ore to be used and treated by it during the period [549] of the contract. Deliveries of the ore were to be made from time to time. Defendant raises the bar of the statute, by reason of the provision of section 31 of the Personal Property Law, that “ every agreement * * * is void, unless it or some note or memorandum thereof be in writing ” which “ By its terms is not to be performed within one year from the making thereof,” and, additionally, because section 85 of the Personal Property Law makes an unwritten contract for the sale of goods of the value of fifty dollars and upwards unenforcible. If section 85, alone, be applicable here, part performance, which is here pleaded, would take the case without the statute, but if section 31 also applies, a contract which contravenes its provisions would be void, and part performance would invest it with no validity. We have concluded that both sections of the Personal Property Law apply here. (Barkley v. Rensselaer & Saratoga R. R. Co., 71 N. Y. 205; Seamans v. Barentsen, 180 id. 333, revg. 78 App. Div. 36; Gordon v. Niemann, 118 N. Y. 152;Large v. Wire Wheel Corporation of America, 223 App. Div. 134; affd., 250 N. Y. 531; Williston Sales, § 51, and cases there cited; Prested Miners’ Co., Ltd., v. Garner, Ltd., [1910] 2 K. B. 776; affd., [1911] 1 id. 425; Simpsom-Fell Oil Co. v. Pierce Petroleum Corp., 32 Fed. [2d] 576.) In Seamans v. Barentsen (supra) the parol contract was for the delivery of milk to defendant, and was not to be fully performed within one year. There was partial and continued performance until defendant’s breach in refusing to take any more milk. The Appellate Division said (p. 37): <l It * * * clearly appeared that it [the contract] came within the prohibition of the Statute of Frauds,” but decided that, because it appeared upon the face of the complaint that the contract was void, the defense of the Statute of Frauds should have been raised by demurrer, and could not be presented by answer. Cullen, Ch. J., writing for reversal, held that the objection was properly taken by answer and reversed the judgment, holding (p. 335): {' The contract on which the plaintiff has recovered was unquestionably void under the Statute of Frauds.” In Gordon v. Niemann (supra) plaintiff was erroneously permitted to prove an oral contract which conflicted with the terms of a written contract. That parol contract, relating to the sale for $500 of a stock of patterns, was by its terms not to be performed within one year, and the court took occasion to point out, as additional ground for reversing plaintiff’s judgment, that the oral contract itself was void under the Statute of Frauds. Nor did the court hold to the contrary in Williamsburg City Fire Ins. Co. v. Lichtenstein (181 App. Div. 681), for that case turned upon the sufficiency of an oral agreement to extend a mortgage, [550] the court ruling that part performance did not validate such a contract which was not to be performed within one year from its making. Indeed, upon demurrer in the action, the same result had been reached (98 Misc. 342; 176 App. Div. 910). The question as to whether contracts for the Sale of goods were subject to section 31 of the Personal Property Law was not before the court in that suit. The Personal Property Law was amended by chapter 571 of the Laws of 1911, whereby that part of subdivision 6 of section 31 which related to the sale of goods, chattels or things in action for the price of fifty dollars or more, was repealed and substantially re-enacted as part of new section 85. In making that change the Legislature did not manifest an intent to alter the statute so as to exempt such a contract, when not to be performed within one year from its making, from compliance with the requirements of both sections. The footnote (Laws of 1911, p. 1298) denotes that the purpose of the enactment was to make the statute uniform with that enacted in other States. The contract as set forth in the amended complaint here, providing for the purchase by defendant from plaintiff of quantities of ore, requires it to take ore of varying quality containing from thirty per cent to sixty per cent tantalum oxide. It expresses a clear method for the determination of the price to be paid for the ore when it contains sixty per cent of tantalum oxide, but it provides that “ In case of ores carrying less than 60% tantalum oxide, a lower price is to be agreed upon.” It is readily inferable that the cost of extracting a pound of the concentrate from the lower grade ore may well be greater than the cost of obtaining it from ore containing a higher percentage of the oxide, and the contract accordingly by its terms reserved for future negotiation the ultimate agreement upon the lower price to be paid for shipments which were of lower grade. Thus an essential term of the contract (the price to be paid) is absent. Nor does the allegation that, subsequently, defendant paid to plaintiff for shipments of ore at the rate of two dollars per pound, regardless of the grade of the ore shipped, constitute an agreement whereby the price of the lower grade ore became fixed. Such acts would merely prove the agreement of the parties to pay for those specific deliveries and would not enter into the contract, so as to obligate defendant to pay for all future and additional shipments at the same rate. The amended complaint contains six causes of action, all of which, except the first cause of action, are for damages either for non-acceptance of ore shipped by plaintiff or because defendant procured ore elsewhere in violation of the agreement, or for damages [551] occasioned by defendant’s conduct in breach of the contract, which it is averred caused the market price to rise so that plaintiff was prevented from securing and selling to defendant the quantity called for by the contract. The sufficiency of each depends upon the validity of the contract and, since that contract is void under the Statute of Frauds, these causes of action fail. The first cause of action, however, is for the balance due for merchandise delivered to and accepted by defendant. Upon trial plaintiff may show that the price alleged was the reasonable price, and recover upon a quantum meruit. Therefore, the order should be modified by granting the motion to dismiss the amended complaint, except as to the first cause of action, and as so modified affirmed, with ten dollars costs and disbursements to the respondent, with leave to the defendant to answer as to said first cause of action within twenty days on payment of said costs. Finch, P. J., McAvoy and Martin, JJ., concur; Merrell, J., dissents.