Patrick Organ et al., Respondents, v. Neil Stewart, Appellant

Patrick Organ et al., Respondents, v. Neil Stewart, Appellant. The payment necessary to take a parol contract for the sale of goods out of the statute of frauds must be a payment of a part of the purchase-price of the goods so contracted to be sold. Payment for goods previously sold and delivered, although made under a claim by the vendee that the goods in question were included in the first contract, and in consideration of the new agreement, is not sufficient. The existence of a good consideration for such a contract does not withdraw it from the condemnation of the statute. (Argued April 1, 1875; decided April 13, 1875.) No estoppel arises in respect to an agreement not otherwise binding, made to induce a party voluntarily to perform a contract which he could be compelled to perform, although he performed it relying upon the agreement. Appeal from judgment of the General Term of the Supreme Court in the third judicial department, affirming a judgment in favor of plaintiffs, entered upon the report of a referee. (Reported below, 1 Hun, 411.) This action was brought for the breach of an alleged contract for the sale, by defendant to plaintiff, of a quantity of wool. The referee found the following facts, among others: That on or about the 24th day of January, 1871, the defendant, who resided at the town of York, in the county of Livingston, in this State, was the owner of three lots of wool: one lot at his residence, in the town of York, spoken of as the “York wool,” amounting to about 37,000 pounds; another- lot on a farm near there, called the “ Gilmore wool,” and a lot stored at Fowlerville, known in this case as the “ Fowlerville wool,” being about 20,000 pounds. That on or about said 24th of January, 1871, negotiations were entered into by and between the plaintiffs, who were co-partners in business, at Troy, Hew York, and the defendant, for the purchase of the several lots of wool above mentioned. The negotiation resulted in the parol sale of the two lots known as the “ York wool ” and the “ Gilmore wool,” and the conditional sale of the “ Fowlerville wool.” The price fixed and ■ agreed upon for the wool sold was “ forty-five cents per pound; less thirty days’ interest.” The condition of the sale of the “Fowlerville wool” was that, if the plaintiffs and the defendant could agree upon the manner in which the wool should be shrunk, it was to be included in the sale and purchase on the same terms as the other lots. The “York” and “ Gilmore wool ” was sacked and delivered to the plaintiffs by defendant as by the terms of their agreement at Caledonia. Thereafter the plaintiff Organ and the defendant went to Fowlerville, and a difference arose between the parties as to the shrinkage insisted upon by Organ, and the defendant refused to let him have the wool there stored, and claimed that said wool had- not been included in the sale. Organ insisted that the “Fowlerville wool” had been and was included in the sale, and that it was to be shrunk by him and sold by defendant at his shrinkage, and demanded the delivery of the wool and the completion of the contract by the defendant. The defendant refused to deliver the wool on the terms insisted on by plaintiff Organ, and Organ thereupon refused to pay him for the amount of wool already delivered by defendant. The parties subsequently had an interview at the store of Henry Bankin, in Troy, relative to the matter in dispute between them, where it was agreed between them that the “ Fowlerville wool ” should be delivered by the defendant at Bankin’s store, Troy, and sorted and shrunk‘by Bankin’s assorters, and then delivered to said plaintiffs, who were to accept the same at the shrinkage as made by the said Bankin, at the price first agreed upon, and thereupon the plaintiffs paid to the defendant $18,357.60, the price of the wool which had been already delivered. Defendant subsequently refused to deliver the “ Fowlerville wool.” Organ v. Stewart (1 Hun, 411) reversed. The referee found, as conclusions of law, that the parol contract made by the parties at York was modified and extended by the subsequent agreement at Troy, so as to include the “ Fowlerville wool,” and to change the place of delivery thereof to Troy, Hew York; and that the money paid thereupon by plaintiffs to defendant was paid upon the contract as modified, as a part of the purchase-price of the whole of the wool, and that the contract so modified was rendered valid and binding by such payment, and directed judgment for the damages sustained in consequence of the non-delivery. Samuel Hand for the appellant. The contract was void irrespective of the statute of frauds being wholly without consideration. (Converse v. Kellogg, 7 Barb., 590, 598; Crosby v. Wood, 2 Seld., 369 ; Hunt v. Bloomer, 3 Duer, 202; Van Allen v. Jones, 10 Bosw., 3; Gibson v. Renne, 19 Wend., 389; Bunge v. Koop, 48 N. Y., 225 ; Peabodie v. Ring, 12 J. R., 426; Bridgman v. Dean, 7 Exch., 199.) The agreement cannot be supported on the ground that it was a compromise of a disputed claim. (Morey v. Town of Newfane, 8 Barb., 645; Bunge v. Koop, 48 N. Y., 225; Crosby v. Wood. 2 Seld., 369 ; Thomas v. McDaniel, 14 J. R., 185 ; Converse v. Kellogg, 7 Barb., 590, 598.) The contract was void by the statute of frauds. (Weir v. Hill, 2 Lans., 278; Pierce v. Page, 28 Vt., 34; Bartlett v. Wheeler, 44 Barb., 164; Harman v. Reeve, 18 C. B., 587; 2 R. S., 136, § 3.) Irving Browne for the respondents. Under the common law parties could alter agreements previously entered into whether written or oral. (Goss v. Ld. Nugent, 5 B. & A., 65; Stead v. Dawber, 10 A. & E., 65; Burt v. Saxton, 4 N. Y. S. C., 111.) The statute of frauds has not changed this rule of the common law. (Cuff v. Penn, 1 M. & S., 21; Cummigs v. Arnold, 3 Metc., 486; Blanchard v. Trim, 38 N. Y., 227; Fish v. Cotterel, 44 id., 542.) The transactions at Troy between the parties to this action amounted simply to a modification of the original contract. (Boutwell v. O'Keefe, 32 Barb., 434; McKnight v. Dunlop, 5 N. Y., 537; Bissell v. Balcom, 39 id., 284; Allis v. Read, 45 id., 142.) If they constituted a new contract, it was valid and not within the statute of frauds. (Thompson v. Alger, 12 Metc., 437; Damon v. Osborn, 1 Pick., 480; Noble v. Ward, 2 L. R. [Ex.], 135 ; Marshall v. Lynn, 6 M. & W. 109 ; Goss v. Nugent, 5 B. & A., 58; Allis v. Read, 45 N. Y., 149.) Defendant is estopped from denying that the payment was made on account of the three lots of wool. (Dezell v. Odell, 3 Hill, 215; Gregg v. Wells, A. & E., 90 ; Brown on Stat. of Frauds, § 438; Lowry v. Tew, 3 Barb. Ch., 413 ; Wetmore v. White, 2 Cai. Cas., 87; Cox v. Cox, 5 Rich. [S. C.], Eq., 365; Whitechurch v. Bevis, 2 Bro. C. C., 565; Ryan v. Box, 34 N. Y., 311.) The transaction at Troy was valid as a compromise of a dispute between the parties. (1 Pars. on Con., 363, 364; Russell v. Cook, 3 Hill, 506; Crans v. Hunter, 28 N. Y., 394; Palmer v. North, 35 Barb., 282.) [MAJORITY — Andrews, J.] Andrews, J. Upon the facts found by the referee there was a clear right in the defendant to recover the purchase-price of the “York” and “ Gilmore” wool, when the verbal agreement for the sale of the “Fowlerville” wool was made. The referee finds that prior to that time a contract for the sale of the other lots of wool had been made at York, and was fully completed on the part of the defendant by delivery to the plaintiffs at Caledonia, and nothing remained to be done to complete the execution of that contract but the payment by the plaintiffs of the agreed price. It is equally clear upon the findings of the referee that no contract was made for the sale of the “ Fowlerville ” wool, until the parties met at Troy and made the agreement which is the subject of this action. There was a negotiation for the sale of this wool when the other wool was purchased, which resulted in what the referee terms a conditional sale, the condition being, as the referee finds, that the “ Fowlerville” wool was to be included in the sale if the parties could agree upon the manner of shrinking it, which he also finds they were unable to do. Plainly, this was nothing more than a proposition on the one side to sell, and on the other to buy, this wool, if the parties could thereafter agree, and neither party was in any way bound by the negotiation. So that when the parties met at Troy the plaintiffs owed the defendant for the “ York” and “Gilmore” wool, and had no claim to the “ Fowlerville ” wool, and no contract touching it, but the defendant was the absolute owner, with the right to sell it to the plaintiffs or to any other person, and also to exact of the plaintiffs the payment of the debt owing by them for the other wool, without abatement, and subject to no counter-claim by reason of the prior incomplete negotiation between them for the sale of the “ Fowlerville” wool. The existence of a valid agreement for the sale of that wool lies at the foundation of this action, and such an agreement is found by the referee to have been made at Troy, after the sale and delivery of the other wool, but before the plaintiffs had paid therefor. The referee finds, in substance, that a controversy then arose between the parties as to whether the contract made at York embraced the “ Fowlerville ” wool, the plaintiffs claiming that it did, and that they were entitled to it under that contract, and the defendant insisting that no contract was made in respect to it. The defendant demanded payment for the wool delivered, and the plaintiffs refused payment on the ground that the delivery of the “ Fowleryille ” wool was a condition precedent to the payment of any portion of the purchase-price. The referee also finds that it was then verbally agreed between the parties that the “Fowlerville” wool should be delivered by the defendant to the plaintiff, and “ that thereupon the plaintiffs paid to the defendant $18,357.60, the price of the wool already delivered,” and that the defendant thereafter refused to deliver the “Fowlerville” wool, and, as a conclusion of law, that the parol contract made at York was modified and extended by the subsequent agreement at Troy, so as tó include the “Fowlerville” wool, and that the money paid thereupon was paid upon the contract as modified, and as part of the purchase-price of the whole of the wool, and that the modified contract was rendered valid and binding by such payment. The right of recovery in this action turns upon the question whether the agreement made at Troy for the sale of the “ Fowlerville ” wool was valid within the statute of frauds. There was no writing, and no delivery of any part of that wool, and as the purchase-price exceeded fifty dollars the contract was void, unless there was a payment of some part of the purchase-money. The existence of a consideration for a verbal contract fur the sale of goods, does not withdraw it from the condemnation of the statute “There can be no question,” says Comstock, J., in Mallory v. Gillett (21 N. Y., 414), “ under the statute of frauds, in any case, until it is ascertained that there is a consideration to sustain the case.” The payment of the price of the wool delivered may, under the circumstances, have been a good consideration for the promise of the defendant to sell and deliver the “ Fowlerville ” wool. Although the referee has found that there was no contract, originally, to sell the “Fowlerville” wool, yet if the plaintiffs bona fide claimed otherwise, and upon dispute arising the defendant conceded the claim, and the payment was thereupon made, there would he no lack of consideration for the defendant’s promise to deliver it. (Russell v. Cook, 3 Hill, 506 ; Crans v. Hunter, 28 N. Y., 394.) But this leaves untouched the real difficulty in the case. The contract must be established according to the statute before it can be enforced. The theory upon which the referee proceeded, that the agreement made at Troy was a modification and extension of the original parol contract, so as to embrace the “ Fowlerville” wool, and that in judgment of law the money paid was paid as part of the price of the whole of the wool, cannot be sustained. The original contract had been complétely performed by the defendant. The most that can be claimed as against him is, that he consented to deliver the “ Fowlerville ” wool in consideration that the plaintiffs would pay for the wool already delivered, and yielded to the wrongful claim of the plaintiffs that it was embraced in the original contract. It is not necessary to consider or to question the doctrine laid down in Cuff v. Penn (1 M. & S., 21), and which has been followed or approved in several American eases (Cummings v. Arnold, 3 Metc., 486; Stearns v. Hull, 9 Cush., 31; Blanchard v. Trim, 38 N. Y., 227), although overruled in England (Goss v. Lord Nugent, 2 Nev. & Man., 33 ; Marshall v. Lynn, 5 M. & W., 109), that a contract originally valid within the statute of frauds, as being in writing, may be modified as to the time or mode of performance by a subsequent oral agreement between the parties. In this case the claim is to engraft upon the original contract a distinct and independent subject-matter, by parol, and to support the transaction by proof that, at the time, the plaintiffs paid what they owed for goods already delivered. It is manifest that the payment which, under the statute will validate a contract, must .be a payment of a part of the purchase-price of the goods sold by the contract sought to be enforced. It is true that the referee finds that the money was paid on the whole wool, but this is his legal conclusion from facts which do not support it. The fact found is that the plaintiffs paid the price of the wool already delivered ; and it appears very distinctly by reference to the evidence, that the sum paid was the exact amount, and was made on account of the purchase-price of the wool delivered at Caledonia, although the plaintiffs in making the payment acted in consequence of the new agreement. This judgment cannot, I think, be supported without disregarding the statute; and the doctrine of estoppel in pais has no application when the party claiming the benefit of it has been induced to do only that which he might have been compelled to do, whatever motives the other party may have presented to induce performance. No estoppel arises in respect to an agreement not otherwise binding, made to induce a party voluntarily to perform a contract which he could be compelled to perform, although he performed it relying upon -and in consequence of the agreement. The judgment should be reversed and a new trial ordered. All concur; Miller, J., not sitting. Judgment reversed..