Hagar & Derby v. King

Welles, J. The contract between the plaintiffs and the defendant, upon which the judgment was recovered, was, substantially, that in consideration that the plaintiffs would receive the $10,000 of rail ¡road bonds in payment of the indebtedness of King, Stancliffe & Co. to the plaintiffs of $8207.75, the defendant would at a future day, at the plaintiff’s request, purchase the same bonds of the plaintiffs, and pay them therefor the said sum of $8207.75, &c. The action is upon this contract of the defendant to purchase the bonds. It was unquestionably valid, at common law. The consideration was the agreement by the plaintiffs to receive the rail road bonds of the defendant in full discharge of the plaintiffs’ demand against King, Stancliffe & Co., and the fulfillment of that agreement by the plaintiffs. This was a good consideration, and sufficient to uphold the agreement by the defendant to repurchase the bonds. It is, however, objected on the part of the defendant that the contract was void for the reason that the same was not in writing. ° The statute is as follows: “ Every contract for the sale of any goods, chattels or things in action for the price of fifty dollars or more, shall be void, unless, 1st. A note or memorandum of such contract be made, in writing, and be subscribed by the parties to be charged thereby; or, 2d. Unless the buyer shall accept and receive part of such goods, or the evidences, or some of them, of such things in [206] action; or, 3d. Unless the buyer shall at the time pay some part of the purchase money.” (2 R. S. 136, § 3 ; Id. 5th ed. vol. 3, p. 222.) The case shows that the contract was not in writing. No part of the rail road bonds had ever been received by the defendant under the contract, nor any thing paid by.him on account of it. It seems to me that the contract was within the statute referred to, and was void for not being in writing. The only possible question there can be on the subject, arises from the fact that the contract for the sale of the bonds by the plaintiffs to the defendant was coupled with the contract that the plaintiffs would take the bonds in payment and satisfaction of their demand against King, Stancliffe & Go. But that, it seems to me, can make no difference in this respect. The whole arrangement comprises two entire and independent agreements. The one for the sale of the bonds by the defendant to the plaintiffs, or that the plaintiffs would accept and receive them in satisfaction of their demand against King, Stancliffe & Co.; and the other, that after the plaintiffs had so become the owners of the bonds, they would sell them back to the defendant at the same price they had advanced King for them. The former has been fully executed, but the latter remains open and executory. It is true that the first contract was the consideration for the second, but how that circumstance relieves the case from the difficulty in question is more than I can discover. After the plaintiffs had received the bonds, in discharge of their demand against King, Stancliffe & Go., they were fully, absolutely and unconditionally vested with the title to them, and it was out of the power of the defendant to reclaim them without the consent of the plaintiffs. They were received by the plaintiffs at considerably below their nominal value. If they had risen in market to above their par value, after the plaintiffs had taken them, it is not to be supposed they would have requested the defendant to take them back at the price [207] at which they had received them. The agreement was that the defendant would, at the request of the plaintiffs, tahe and purchase the bonds, &c. The contract in this respect was one for the sale of the bonds by the plaintiffs to the defendant. - It was none the less so that it hound the defendant absolutely to purchase them, provided the plaintiffs so requested, and left it optional with the plaintiffs to sell the bonds to the defendant at a price agreed upon. It was nothing more nor less than a contract to sell the bonds to the defendant after the plaintiffs should become invested with the title to them; and being invalid in consequence of not being in writing, and not being saved from the operation of the statute by either the 2d or 3d subdivisions of the section of the statute referred to, I think the judgment should be reversed, and a new trial ordered, with costs to abide the event. E. Darwin Smith, J. Upon the ground upon which this case was put at the trial, I think the verdict cannot he maintained. In his charge to the jury, the circuit judge instructed them that if they found that the plaintiffs were at work for King, Stancliffe & Co. under their promise to pay, and that in settling with them the defendant induced them to take the bonds of the rail road company, upon his promise to take said bonds of them within a short time, and pay for them the amount of the debts due them for the graveling, then it was a valid obligation—a good promise—and the plaintiffs were entitled to recover. In another part of the charge the judge said, “ if King, Stancliffe & Co. owed this debt to the plaintiffs, and King induced the plaintiffs to take the bonds, on his promise to take them and pay for them, it was a valid contract, and the plaintiffs were entitled to recover.” The plaintiffs’ right to recover in the action is thus based upon contract; not upon the original contract to pay the plaintiffs for their work, hut upon the contract of the defendant to purchase the bonds. This was a contract to purchase [208] bonds of the nominal amount of $10,000 for the price of $8207.75. This was by parol; “no note or memorandum of it was made in writing and subscribed by the parties to he ■ charged thereby,” nor did the buyer at any time pay any part of the purchase money. It is a contract for the sale of “ things in action,” and is thus within the express words of the statute. If there was a sufficient consideration for the contract at common law, as the charge assumes, that would not save it from the operation of the statute. It is nevertheless void. (Mallory v. Gillett, 21 N. Y. Rep. 412.) Probably in most of the cases where the statute declares the contract void, it would not be invalid for want of a sufficient consideration. The statute says, “ if the contract is for the sale of goods, „ chattels or things in action for the price of fifty dollars or more, it shall be void, unless in writing,” &c. I can see no way to take the contract for the sale of the bonds in question, out of the statute. It was claimed on the trial that $100 was subsequently advanced upon the purchase. This was not established in fact, and was not regarded as proved, by the circuit judge, and the point was not seriously made on the trial or here. If the action had heen for the original consideration, the question might then have arisen in the light in which it was' presented by the counsel for the plaintiffs here, that this agreement to take the bonds was merely a provisional arrangement between the parties, and the defendant was not discharged from the debt. If the question had been then put to the jury whether these bonds were in fact actually taken and received by the plaintiffs, absolutely in payment of the debt, or conditionally only and for the benefit and accommodation of the defendant, a verdict for the plaintiffs, in this view, might possibly have been sustained. But the cause was tried and presented to the jury upon a different theory. It was tried as an action on the contract for the sale of the [209] bonds, and the verdict cannot be sustained upon a different view of the plaintiffs’ rights. [Monroe General Term, September 1, 1862. As the action is brought upon the contract for the purchase of the bonds, the plaintiffs were bound to prove a delivery or tender of the bonds at the time specified in the contract, and having done so, they would not be bound to prove that they kept them for the defendant. They would be entitled to sell them for the market value, and recover their damages for the refusal of the defendant to receive and pay for them, at the time, and for the price stipulated; or they might have kept the bonds for the defendant, ready to deliver at the trial, or at any earlier period when the defendant should become entitled to them. The claim of the defendant’s counsel that the plaintiffs could not recover because there was no proof of a tender of the bonds, or of a demand upon him to fulfill the contract, it seems to me, was right, and the exception for the refusal of the judge to nonsuit the plaintiffs on-this ground well taken. Several other exceptions appear in the case, but as I think there should be a new trial, it is hardly worth while to discuss them, as they are points which may not again arise. I think there should be a new trial, with costs to abide the event. Johnson, J. dissented. Hew trial granted. E. Darwin Smith, Johnson and Welles, Justices.]